2025:MHC:2742 In the High Court of Judicature at Madras Reserved on Delivered on: 18.11.2025 02.12.2025 Coram:

The Honourable Mr.Justice N.ANAND VENKATESH Original Petition No.862 of 2018 M/s.Oil & Natural Gas Corporation Ltd., MM Department, Thalamuthu Natarajan Building, Tower II 8^th Floor, Gandhi Irwin Road, Egmore, Chennai-8. ...Petitioner Vs M/s.Idealis Mudchemie Private Limited, No.2, North Crescent Road, T.Nagar, Thyagarayanagar, Chennai-17.

(name and address of the respondent amended as per order of the Court dated

18.9.2025 vide Memo dated

18.9.2025 by NAVJ) ...Respondent PETITION under Section 34(2)(A(IV) and (V) and (B)(2) of the Arbitration and Conciliation Act, 1996 praying to set aside the arbitration award dated 02.5.2018 passed by the 2^ndrespondent, which had arisen out of the dispute between the petitioner and the 1^st respondent in contract dated 16.4.2012 and direct the 1^st respondent to pay the costs of the petition.

For Petitioner : Mr.R.Yashod Vardhan, SC assisted by Ms.D.Monisha for M/s.AAV Partners For Respondent : Mr.S.R.Raghunathan for Ms.Akila ORDER This is a petition filed by the petitioner – M/s.Oil and Natural Gas Corporation Limited challenging the award passed by the learned Arbitrator dated 02.5.2018.

2. Heard both.

3.The facts leading to filing of this petition are as follows :

(i) Vide tender dated 31.12.2010, the petitioner called for bids for supply of baryte powder for a total quantity of 3,19,912 MTs having specific gravity of 4.15. The respondent submitted their bid on 23.2.2012. The respondent became the successful bidder. Pursuant to that, a letter of award (LoA) dated 23.2.2012 was issued by the petitioner to the respondent for the supply of 45,360 MTs of baryte powder at an ex-works price of Rs.4,869/- per MT + applicable taxes. Thereafter, the petitioner and the respondent entered into a rate contract dated 16.4.2012 in this regard. The contract was for a duration of two years from the date of the LoA dated 23.2.2012 to

22.2.2014.

(ii) Vide letter dated 08.3.2012,The respondent furnished a performance bank guarantee for Rs.99,39,000/- in favour of the petitioner. Later, by means of an amendment to the rate contract dated 06.3.2014 marked as Ex.C.6, the contract was amended to extend the duration upto 30.9.2014.

(iii) The respondent supplied 16,250 MTs of baryte powder during the contract period till February 2014. Even during the extended period of time, 7,000 MTs were supplied by the respondent. Thus, in total, the respondent supplied 23,250 MTs as against their contractual obligation to supply 45,360 MTs.

(iv) On the grounds of short supply, supply of sub-standard material and delayed supplies, the petitioner made the following deductions as per the terms of the contract:

(1) Deduction to the tune of Rs.6,63,661.74 Ps. towards shortfall of the quantities supplied (2) Deduction to the tune of Rs.53,25,855/- towards liquidated damages and (3) Deduction to the tune of Rs.16,21,807/- towards supply of sub-standard material.

In total, a sum of Rs.76,11,323.74 Ps was deducted.

(v) The petitioner also took steps to invoke the performance bank guarantee and at that point of time, the respondent filed an application in O.A.No.1314 of 2015 against the petitioner and ICICI Bank, Nungambakkam before this Court under Section 9 of the Act and sought for an order of interim injunction against encashment of the performance bank guarantee till the completion of the arbitral proceedings. Later, the said application was allowed by order dated 07.4.2016 and once again, at the instance of the respondent, pursuant to a petition in O.P.No.445 of 2016 filed under Section 11 of the Act, an Arbitrator was appointed.

(vi) Thereafter, before the learned Arbitrator, the respondent filed the claim statement before the learned Arbitrator making the following claims:

S.No. Description Column Amount in Total No. Rs. Rs.

I Shortfall in payment Interest due on delay in 31 29,78,731.11 payments

33 89,64,810.74 Shortfall in payment of