The court upheld the interim arrangement for supply at a specified price, emphasizing the importance of arbitration in resolving disputes and refraining from expressing a view on the enforceability of the agreement.

VIBHU BAKHRU, J

IA No.12250/2016

Allowed, subject to all just exceptions.

O.M.P.(I) (COMM.) 389/2016

1. The petitioner has filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996, inter alia, praying as under:-

“(i) Restrain the Respondent from selling, transferring, assigning, pledging, mortgaging, alienating or otherwise disposing of any part of the Wax produced by the Respondent at its Plant at Pata Complex, U.P. to any third parties or creating any third party rights therein till the final disposal of the Arbitration proceedings except to the Petitioner;

(ii) Direct the Respondent to effect the supply of entire quantity of Wax produced at its Pata Plant to the Petitioner at the price determined in accordance with the pricing formula in terms of the Agreement and the Award dated 08.04.2006 till the disposal of the arbitration proceedings;

(iii) Restrain the Respondent and their directors, partners, servants, agents, representatives or assigns from directly or indirectly entering into any agreement for sale or provision of the quantity of Wax allocated to the Petitioner under the Agreement dated 01.04.1999 with any other person or requiring the Petitioner to pay market price for the Wax supplies under the Agreement;

(iv) Appoint a local commissioner to check the quantity of the stock of Wax produced by the Respondent and lying in storage at its Plant at Pata Complex, U.P. as also the conditions of storage thereof and to report on the same to the Hon’ble Court and/or Arbitral Tribunal.”

2. The parties had entered into a contract dated 01.04.1999, whereby the respondent agreed to supply the entire quantity of Wax produced by the respondent at its Plant at Petro Chemical Complex at Pata in the State of Uttar Pradesh.

3. The principal dispute between the parties appears to be regarding the pricing of the by-product Wax, which was agreed to be supplied by the respondent to the petitioner. In addition, there is also some controversy regarding whether the respondent is obliged to supply the entire production from all its Plants. The petitioner claims that it is also entitled to production from Train-2, which the petitioner claims is an expansion of the existing plant. The respondent disputes this as according to the respondent, what the petitioner mentions as Train-2 is in fact, a new plant.

4. Insofar as the dispute regarding pricing of Wax is concerned, the petitioner claims that the same has to be in accordance with the Agreement, which specifically links the price of the product to Ethylene.

5. The disputes between the parties have already been subject matter of adjudication by two Arbitral Tribunals. The first Award was rendered on 08.04.2006 and the Tribunal had awarded as under:-

“Final Award

191. GAIL will supply flaked wax at Rs.24,860/-per metric ton to HRD Corporation, claimant, according to the terms of the contract dated 1.4.1999. This price of Rs.24,860/-per metric ton will continue from 12.7.2004 till 12.7.2007 when the parties can seek revision of the price in accordance with the agreement dated 1.4.1999.”

6. The said Award covered the supplies for the period till 12.07.2007.

7. The second Award was rendered on 22.07.2015 for the period from 13.07.2013 to 12.07.2016. As per this Award, the price for the Wax was fixed at Rs.47,500/-per metric ton.

8. In between the aforesaid two Awards, there was yet another determination rendered by the Arbitral Award which rendered the first Award whereby the price was determined at Rs.32,950/-for the period 13.07.2010 to 12.07.2013.

9. Mr Mukhopadhaya, learned senior counsel appearing for the respondent on advance notice states that the price of the product has now increased to Rs.83,000/-per metric ton. This is disputed by Mr Nigam, learned senior counsel appearing for the petitioner; he states that the prices of the Wax has now dropped to Rs.35,000/-.

10. After some arguments, Mr Mukhopadhaya states on instructions that his clients would be willing to supply