FAO(OS)-210, 214&215 of 2012 Page 1 of 37

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IN THE HIGH COURT OF DELHI AT NEW DELHI

%

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FAO(OS) 210/2012

VALE AUSTRALIA PTY. LTD.

…Appellant

Represented by: Mr.Arvind Nigam, Sr.Advocate

instructed by Mr.Amit Sibal, Mr.Anirudh Das,

Ms.Smarika Singh, Ms.B.S.Baby, Mr.Manu Krishnan,

Advocates.

versus

STEEL AUTHORITY OF INDIA LTD. & ANR. .....Respondents

Represented by: Mr.A.K.Ganguly, Sr.Advocate

instructed by Mr.Parmatma Singh, Ms.Reeta

Chaudhary, Mr.A.K.Panda, Mr.Jagmohan Sharma,

Mr.Mayank Jain, Mr.Madhur Jain, Mr.Sharat Kapoor,

Mr.Ashish Goswami, Advocates.

And

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FAO(OS) 214/2012

STEEL AUTHORITY OF INDIA LTD. & ANR. .....Appellants

Represented by: Mr.A.K.Ganguly, Sr.Advocate

instructed by Mr.Parmatma Singh, Ms.Reeta

Chaudhary, Mr.A.K.Panda, Mr.Jagmohan Sharma,

Mr.Mayank Jain, Mr.Madhur Jain, Mr.Sharat Kapoor,

Mr.Ashish Goswami, Advocates.

versus

VALE AUSTRALIA PTY. LTD.

…Respondent

Represented by: Mr.Arvind Nigam, Sr. Advocate

instructed by Mr.Amit Sibal, Mr.Anirudh Das,

Ms.Smarika Singh, Ms.B.S.Baby, Mr.Manu Krishnan,

Advocates.

2013:DHC:2996-DB

FAO(OS)-210, 214&215 of 2012 Page 2 of 37

And

+

FAO(OS) 215/2012

AMCI PTY LTD.

…Appellant

Represented by: Mr.Arvind Nigam, Sr. Advocate

instructed by Mr.Amit Sibal, Mr.Anirudh Das,

Ms.Smarika Singh, Ms.B.S.Baby, Mr.Manu Krishnan,

Advocates.

versus

STEEL AUTHORITY OF INDIA LTD. & ANR. .....Respondents

Represented by: Mr.A.K.Ganguly, Sr.Advocate

instructed by Mr.Parmatma Singh, Ms.Reeta

Chaudhary, Mr.A.K.Panda, Mr.Jagmohan Sharma,

Mr.Mayank Jain, Mr.Madhur Jain, Mr.Sharat Kapoor,

Mr.Ashish Goswami, Advocates.

CORAM:

HON'BLE MR. JUSTICE PRADEEP NANDRAJOG

HON'BLE MR. JUSTICE MANMOHAN SINGH

PRADEEP NANDRAJOG, J.

1.

AMCI Australia Pty Ltd. (AMCI), a company incorporated

in Australia and owning coal mines entered into Agreement No.217/2007

dated April 23, 2007 with Steel Authority of India Ltd. (SAIL) for sale of

One Million Metric Ton of Hard Coking Coal as per specifications

contained in the agreement. The company was later on re-named CVRD

Australia Pty Ltd. after the CVRD Group acquired the shares of AMCI

Holding Australia Pty Ltd. and is currently known as VALE Australia Pty

Ltd. Since under the agreement, AMCI Australia Pty Ltd. was acting

both as the coal producer and the seller and as a result of name being

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FAO(OS)-210, 214&215 of 2012 Page 3 of 37

changed upon shareholding of the Holding company‟s changing VALE

Australia Pty Ltd. become the producer and AMCI Pty Ltd. the seller of

the coal.

2.

The litigation has been jointly fought by the two companies

for the reason the rights and liabilities of the two entities are joint as per

a supplementary agreement dated June 07, 2007.

3.

As per the agreement, One Million Metric Ton of coal had to

be supplied during the delivery period July 2007 to June 2008. The coal

had to be of the specification as in clause 1.1 read with Annexure-II and

II-A of the agreement. As per clause 1.2 of the agreement the shipment

had to be evenly spread during the delivery period with right in SAIL to

postpone deliveries by up to three months. As per clause 2.1 the price

fixed was US$ 96.45 per Metric Ton (free on board). The port of loading

had to be one of the Australian ports listed in clause 2.1. As per clause

2.2, by mutual consent the parties could extend the time for delivery of

the coal.

4.

As per clause 7.1 the period of delivery was expressly stated

to be of the essence of the agreement and as per clause 8.1 if supply was

not made within the agreed time SAIL had the right to seek liquidated

damages at a sum equivalent to 1% of the price of the