TaxTMI 
TaxTMI 
2020 (12) TMI 1372
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....Appellant and MMTC Ltd. ["Respondent"], the Appellant, referred to as the "seller" in the LTA, agreed to supply certain quantities of freshly mined and washed "German Creek", "Isaac" (Blend of 65% Moranbah North and 35% German Creek coking coals) and "Moranbah North" coking coal to the Respondent. Clause 1 of this LTA is material and states as follows: CLAUSE 1: MATERIAL, QUANTITY, QUALITY AND DELIVERY PERIOD: The SELLER shall sell and the PURCHASER shall buy, a) The base quantity during the currency of the contract shall be 466,000 (Four hundred Sixty Six thousand) metric tons (of one thousand kilograms each) firm. b) During the First Delivery Period (1st July, 2004 to 30th June, 2005), a quantity of 464,374 (Four Hundred Sixty Four Thousand, Three Hundred and Seventy Four) metric tons (of one thousand Kilograms each) firm quantity of freshly mined and washed "Isaac", "Moranbah North" and "German Creek" coking coals. c) During the Second Delivery Period (1st July, 2005 to 30 June, 2006) a quantity of 382,769 (Three Hundred Eighty Two Thousand, Seven Hundred and Sixty Nine) metric tons (of one thousand kilograms each) firm quantity of freshly mined and washed "Isaac", "Mo....
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....very Period by upto 3 months i.e. the month of September following each Delivery Period, without any additional financial liability to the PURCHASER. 1.3 The PURCHASER had the option to extend the duration of the Agreement by two more years, at its sole discretion and the Purchaser to exercise its option for extending the Agreement by two more years or otherwise by 31st January, 2007. In case the PURCHASER decides to exercise such option, at its sole discretion, the Agreement shall have two more Delivery Periods as follows: Fourth Delivery Period: 1st July 2007 to 30th June 2008 Fifth Delivery Period: 1st July 2008 to 30th June 2009 3. Under Clause 2 of the LTA, which refers to "Price", for subsequent Delivery Periods, including the "Fifth Delivery Period", with which we are directly concerned, it is undisputed that when read with Annexure I of the LTA and a letter dated 14.08.2008, setting out the terms of the Fifth Delivery Period, the price was fixed at $300 per metric tonne. Clause 2.2 is important and states as follows: CLAUSE 2: PRICE xxx xxx xxx 2.2 The Price for the Delivery of AGREEMENT quantity for subsequent Delivery Periods shall be fixed in accordance with....
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....nd. These matters, of what the Tribunal understands to be common ground, are summarised also in the Claimant's Opening Submission dated 16th September 2013. 35. By a Long Term Agreement dated 7th March 2007 under which the Respondent contracted to purchase freshly mined and washed coking coal from the Claimant on FOB (trimmed) basis from DBCT Gladstone in Australia. The Long Term Agreement they signed was extended by agreement and is to be read along with Addendum No. 2 dated 20th November 2008. As referred to at paragraph 5 above, the Long Term Agreement as extended by Addendum No. 2 is referred to herein as "the Agreement". 36. Prior to Addendum No. 2, the Agreement encompassed three Delivery Periods of one year each commencing on 1st July 2004 and concluding on 30th June 2007. The Long Term Agreement included a provision (at Clause 1.3) that gave the Respondent an option to extend the Long Term Agreement for two more Delivery Periods, and this option was exercised such that purchases and deliveries were also to be made in a Fourth Delivery Period (between 1st July 2007 and 30th June 2008); and a Fifth Delivery Period (1st July 2008 to 30th June 2009). 38. In regard to ....
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....f the Respondent in not lifting the contracted quantity. The loss claimed by the Claimant is the difference between what is said to have been the market price, and the contract price. 45. For its part the Respondent denies any breach on its part in not having lifted the contracted quantity. This is because, according to the Respondent, the Claimant did not in fact have the goods available for delivery to the Respondent. The Respondent's contention is that the Claimant's marketing manager expressed an inability to supply cargo under the Fifth Delivery Period, and the Respondent says that this was a simple refusal to perform the obligation to supply coal under the Agreement. Correspondingly, the Respondent contends that it was the Claimant which was in breach of the Agreement. 46. The detailed issues which arise, as defined in the Terms of Reference and, as these were supplemented, are as follows: A. Whether the Respondent committed breach of contract in not lifting 454,034 MT of coking coal in terms of Agreement and if so, the consequences thereof? If yes, what is the date of such breach? B. Whether the Claimant was in breach of contract in failing to supply goods to....
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..... Please confirm availability and convey the laycans. 58. On 3rd July 2009 the Claimant wrote to Mr. Babu of the Respondent seeking time to respond to the request. However there was no follow up from the Claimant. On 21st July 2009 the Respondent again requested confirmation of stem availability: We are awaiting stem confirmation from Anglo for August 2009. Please note we have given our Indent well in advance. The flexibility of laycan vested with you completely. We look forward to hear from you... 59. On 22nd July 2009 the Claimant responded, stating: Unfortunately, at this stage we are unable to confirm a stem in Aug/Sep for MMTC due to cargo availability. We are continuing to review our position and will advise our preferred Schedule for Oct-Dec 2009 as soon as possible. 60. The Respondent submits that this means what it literally says; the Claimant refused to confirm stem availability for August and September 2009 due to a lack of availability. Correspondingly, the Claimant failed to supply the contracted material within the Fifth Delivery Period. 61. On 4th September 2009, the Respondent wrote to the Claimant stating that: Our cokery has increased the pushing&#....
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....d 20.11.2008. Lifting another 38% implies a further increase in loss by another USD 80/1. For the sake of negotiation, we hope you will not ignore the economic realities completely, Steel Melting Shop of NNL is under implementation and the commissioning is expected sometime in end 2010. Economy will also come out of recession gradually. In short we are not denying our obligation. The request is only for staggering the time frame for lifting as explained in para. 1 & 2 above. Please review and reconsider our request for allotting at least one shipment of 50,000MT each from October 09 onwards instead of zero stem till end of 2009. 5c. After setting out summaries of the Claimant's case and the Respondent's case, under the sub-heading, "Availability of Coal", the Majority Award accepted the evidence of Mr. John B. Wilcox, Marketing Manager, on behalf of the Appellant, reading the same with the Respondent's letter dated 20.11.2008, as follows: Availability of Coal 118. The first element to be considered is the assertion advanced on behalf of the Respondent that the Claimant did not have the contracted goods to deliver. This depends entirely upon two e-mails, one date....
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....the month of September and October 2008 and pig iron,... is not getting customer on date even at US$300 FOB. Same is the situation in the domestic market and we are not able to sell our product. Under the circumstances, you will appreciate it has become absolutely unreliable to produce and sell pig iron based on the imported coking coal having prices US$300 per tonne FOB for hard coking coal... The substantial depreciation of Indian rupees to the US dollars is further added to our woes.... In view of unprecedented recessionary trends in the economy and consequent abnormal low realisation on pig iron, we request price reduction of coal for quantities finalised for delivery during 1 July, 2008 to 30 of June 2009 period to a level that was settled for delivery period 1 July, 2007 to 30 of June 2008. 123. It appears to us that the evidence is all one way, to the effect that demand for coking coal was substantially reduced during the last few months of 2008 and in, at least, the first half of 2009, and it follows, it seems to us, that this strongly corroborates Mr. Wilcox's evidence as to the availability of coking coal for supply to the Respondent. 124. Accordingly we reject th....
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....d with the sentence "We refer to our letter of 11th March 2009 to which we have not yet received a response.". The Claimant did receive a response to the letter of 21st September (Vol. 2, page 23) sent on behalf of Mr. Babu, but that response expressed no surprise regarding the reference to a letter of 11th March 2009, nor did it state that no such letter had been received. 141. In summary therefore there is much in the contemporaneous correspondence to support the Claimant's assertion that this letter was sent, and nothing to rebut that assertion. So far as the witness evidence is concerned, not least because it is corroborated by the documents, the Tribunal prefers and accepts the evidence of Mr. Wilcox that supply of coal was offered by the Claimant to the Respondent, including by the letter of 11th March 2009. 5f. Under the further sub-heading, "What Was the Respondent Seeking in its emails in June/July 2009?", the Majority Award found as follows: What Was the Respondent Seeking in its emails in June/July 2009? 142. It appears to the Tribunal that the stage was set for the dealings between the two parties in regard to the Fifth Delivery Period at the time that they ....
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....al contractual arrangements point out that the Claimant was obliged to fulfil this order, nor did he make any complaint that the Claimant had failed to comply with the "prerequisite" of indicating stem availability before the Respondent was required to act. 147. It was in this context that Claimant wrote on 22nd July 2009 referring to an inability to confirm stem in August/September due to cargo availability. Seen in the context of the exchanges between the parties, and seen against the background of the evidence given by Mr. Wilcox to the effect that prices had slumped and the Claimant was "dumping" coal in China, the only possible understanding of this e-mail is that the Claimant was declining to supply further coal at below the contract rate as had been done in the ad hoc Sea Venus agreement. 148. On 4th September 2009 the Respondent wrote again seeking stem (for delivery beyond the contract period), noting that there had been no delivery since the Sea Venus agreement. Once again the response received by the Respondent was that there was a lack of availability. 149. None of these exchanges refer specifically to the price at which the coal was being sought, or at which it m....
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.... 155. It follows that the Claimant's notice of arbitration, which was issued on 24th September 2012 and received by the Secretariat on the same day was issued and the arbitration commenced within the three-year limitation period. 5h. Under the sub-heading, "Proof of Damage?", the Majority Award found: Proof of Damage? 156. It appears to the Tribunal, with respect to the Respondent, that this is a hopeless line of argument. There is ample evidence of the market price for coal in 2009 both in the Affidavit and Additional Affidavit of Mr. Wilcox (which details the prices at which the Claimant was selling coal to Chinese parties during the Fifth Delivery Period), but also in the contemporaneous correspondence, including the Respondent's letter of 3rd December 2009 and the agreement reached between the Claimant and SAIL/RINL. The Respondent was itself purchasing coal from BHP Mitsui at about US$128 per MT at about this time. 157. There is no dispute as to the relevant quantity of coking coal which was not lifted, and the Tribunal accepts (this not being a matter of dispute) that the difference between the market rate and the contracted rate represents the correct measur....
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....n record to show that the claimant had the contracted material ready to supply. Even the chart showing supplies to the third parties filed by the Claimant along with the additional evidence of Mr. John Wilcox indicates that the supplies of the entire quantity of the material available with the Claimant had already been made to all the other Buyers and it appears that the Claimant did not have the material to supply under the Contract at least for the period between July to September 2009 which was the contracted period. (l) It is incomprehensible that a party which was ready with such huge quantity of coal would not send follow up communications to the Respondent urging them to lift the contracted goods if such goods were ready at the load port. Not a single document has been produced in terms of which the Claimant could show that it had written to the Respondent that so much quantity of material was sitting at the load port and that MMTC has failed to nominate the vessel. After the 11th March 2009 letter there is no other communication addressed by the Claimant to the Respondent requesting the Respondent to provide the delivery schedule. On the contrary in their emails they expr....
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....vis the coal at new contract prices." The letter dated 21st September, 2009 when read as a whole and in the context of the above correspondence reflects what the majority Award has rightly understood, viz., that Anglo, far from repudiating the contract or bringing it to an end, was offering MMTC a way to spread out its obligation to lift the carry over quantity over the subsequent period. A plea of bias levelled against one of the arbitrators, namely, Mr. Peter Leaver, was also rejected. It was found, after copious references to both oral and documentary evidence, that the view of the Majority Award, being a possible view on the Respondent being in breach and the Appellant having proven quantum of damages, that no ground Under Section 34 of the Arbitration Act for interfering with the Majority Award was made out. 9. The impugned judgment of the Division Bench dated 02.03.2020, after setting out the facts, the Majority Award and the Single Judge's conclusions, based its decision on an appreciation of three emails between the parties, which were picked out of the entire correspondence, namely, emails dated 02.07.2009, 22.07.2009 and 07.09.2009. The Division Bench referred to th....
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....e position in the present case. There is no evidence to support the conclusion that the Appellant was demanding consignment of coal at any reduced rate vis-à-vis the contractually agreed price. There is also no evidence to support the conclusion that the Respondent had coal available to supply to the Appellant, when the Appellant demanded it. If anything, there is a straight forward acknowledgement by the Respondent that it had no coal available till the end of the year 2009, without any qualification or reservation that coal was available at the contracted rate but not at a discounted rate. 30. What is more is that there is also no basis to the calculation of damages. The Tribunal has calculated damages by taking the difference in the agreed price of coal and the assumed 'market price' at the relevant time. However there is no evidence to prove the market price of coal at that time. The question of mitigation of damages by the Respondent has not even been alluded to. After setting out in some detail, the judgment in Associate Builders v. DDA, (2015) 3 SCC 49 ["Associate Builders"], the Division Bench held as follows: 33. ... In the present case however, we find....
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.... inconsistency exists as we shall demonstrate presently. The Privy Council's case was one of ambiguity and the surrounding circumstances gave the clue to find out the real intention of the parties expressed by them. In the present case, we find no reason to look for the 'undisclosed intention' of the Respondent since the clear and express words of the Respondent, as contained in the aforecited e-mails/communications, are perfectly in accord with and apply squarely to existing facts. We must therefore accept the ordinary meaning of what is stated in those emails/communications, namely that the Respondent did not have any coal available till the end of the year 2009 for supplying to the Appellant. 35. Proceeding on this basis, by a majority, the Tribunal has awarded USD 78,720,414.92 as damages along with interest of USD 27,239,420.29 calculated upto the date of the award, along with 15% p.a. future interest on the principal sum, in addition to USD 977,395.00 as costs. This amount, calculated at the ballpark prevailing exchange rate of approximately USD 1 = INR 70 translates to INR 7,48,56,06,115 that is to approximately INR 748 crores. In our view, such an award must....
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....offer, open and capable of acceptance until 30.09.2009. The Respondent's only response to this was by a letter dated 25.09.2009, in which the obligation to lift coal at the contractual price was admitted, the Respondent asking for a reduction in price, without ever stating that it had not received the letter dated 11.03.2009. This, he argued, showed the Appellant's willingness to perform the deliveries as per the LTA, by demanding a Delivery Schedule from the Respondent. His argument, therefore, was that the Majority Award and the learned Single Judge, after referring to the entirety of the correspondence, arrived at the conclusion that the Respondent was in breach of the LTA, whereas the Division Bench arbitrarily picked out three emails out of the welter of correspondence between the parties, ignoring what was communicated before and after those three emails, thereby arriving at a faulty conclusion on facts, as if it were a court of appeal. 12. Shri Sibal also argued that to get over the parameters of judicial review of arbitral awards laid down in Associate Builders (supra), the Division Bench wrongly stated that there is "no evidence" to support the conclusion that the....
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....e crucial issues of breach, as well as quantum of damages. According to him, the three crucial emails that were relied upon by the Division Bench were correctly relied upon, as these emails would unequivocally show that the Appellant was not in a position to supply coal, and that the Respondent was in a position to take supplies, and did in fact demand that supplies of coal be made in accordance with the LTA. 15. Shri Rohatgi then referred to Clause 7.2 and annexure IV of the LTA, dealing with the intimation of a Delivery Schedule, and stated that under the LTA, it was first incumbent upon the Appellant, as the seller, to ensure that sufficient quantities of coal were available, subsequent to which, the nomination of a vessel was to take place before a Delivery Schedule would be agreed upon between the parties. He argued, based on the emails and letters exchanged between the parties, that in point of fact, only one ad hoc shipment took place at a "mixed" rate, partially at the contractual price of $300 per metric tonne and partially at the rate of $128.25 per metric tonne, under which an ad hoc quantity of 50,000 metric tonnes was supplied in August 2008. It was thus clear that wh....
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....to the context of the LTA and the correspondence, both before and after those three emails, would render the judgment of the Division Bench fundamentally flawed. Further, the finding that there was "no evidence" that the Respondent demanded stems of coal at a reduced rate vis-à-vis the contractual rate, flies in the face of at least three different exchanges between the parties, being the Respondent's letters dated 20.11.2008, 27.11.2009 and 03.12.2009. 19. Equally, the finding of the Division Bench that no evidence had been led to show that the Appellant had availability of the balance quantity of 454,034 metric tonnes of coal to supply to the Respondent during the Fifth Delivery Period, again completely fails to appreciate Mr. Wilcox's evidence given by way of an Additional Affidavit dated 03.09.2013 and in response to questions in cross-examination before the Arbitral Tribunal on 23.09.2013, together with two letters exchanged between the parties on 21.09.2009 and 25.09.2009. All of these aspects were considered in the Majority Award of the Arbitral Tribunal. 20. The finding that there is "no evidence" to prove market price of coal at the time of breach, and tha....
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....ith and applied squarely to the existing facts. Therefore, the ordinary meaning of what was stated in those emails must be accepted, without more, which led to the conclusion that the Appellant did not have any coal available till the end of the year (i.e., 2009) to supply to the Respondent. 23. The judgment in Smt. Kamala Devi (supra) dealt with the interpretation of a surety bond which was executed by the Appellant in favour of the Court. A judgment of the Privy Council reported as Raghunandan v. Kirtyanand AIR 1932 PC 131 was referred to, in which Lord Tomlin referred to an ambiguous surety bond which was to be considered in the surrounding circumstances of the facts in that case, i.e., in light of the order directing the security to be given. After setting out the judgment of the Privy Council, this Court then held: These observations only apply the well settled Rule of construction of documents to a surety bond. Sections 94 to 98 of the Indian Evidence. Act afford guidance in the construction of documents; they also indicate when and under what circumstances extrinsic-evidence could be relied upon in construing the terms of a document. Section 94 of the Evidence Act lays do....
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....ourt, including Courts-martial, other than Courts-martial convened under the Army Act, the Naval Discipline Act or the Indian Navy (Discipline) Act, 1934, or the Air Force Act but not to affidavits presented to any Court or officer, nor to proceedings before an arbitrator; 25. This would be sufficient to keep the application of Section 94 of the Evidence Act out of harm's way. However, on the footing that the principle contained in Section 94 of the Evidence Act, as to extrinsic evidence being inadmissible in cases of "patent ambiguity", is fundamental to Indian jurisprudence, we proceed to examine whether Section 94 of the Evidence Act has been correctly applied by the Division Bench to non-suit the Appellant. 26. Section 94 appears in Chapter VI of the Evidence Act titled, "OF THE EXCLUSION OF ORAL BY DOCUMENTARY EVIDENCE". In this regard, proviso (6) to Section 92 of the Evidence Act is important and states as follows: 92. Exclusion of evidence of oral agreement. -- When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence ....
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....ctions 92, 94 and 95 of the Evidence Act are applied to a string of correspondence between parties, it is important to remember that each document must be taken to be part of a coherent whole, which happens only when the "plain" language of the document is first applied accurately to existing facts. 29. In Woodroffe and Ali's Law of Evidence, [Woodroffe, J. and Ali, A., Law of Evidence, 19th Edition (Volume 3), 2013, Butterworths Wadhwa, Nagpur.] the learned authors opine that whereas Sections 93 and 94 of the Evidence Act deal with cases of patent ambiguity, Sections 95 to 97 of the Evidence Act deal with cases of latent ambiguity (see pages 3119-3120). A "patent ambiguity" is explained in the following terms in Starkie on Evidence [Starkie, T., A Treatise on the Law of Evidence, 7th Edition, 1829, William Benning, London]: By patent ambiguity must be understood an ambiguity inherent in the words, and incapable of being dispelled, either by any legal Rules of construction applied to the instrument itself, or by evidence showing that terms in themselves unmeaning or unintelligible are capable of receiving a known conventional meaning, the great principle on which the Rule is....
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....instrument are clear, but their application to the circumstances is doubtful; here the ambiguity, being raised solely by extrinsic evidence, is allowed to be removed by the same means. In strictness of definition, such cases, as those in which peculiar usage may afford a construction to a term different from its natural one as can be seen in Section 98, would be instances of latent ambiguity, since the double use of the term would leave it open to the doubt in which of its two senses it was to be taken. It is not, however, to this class of cases that reference is now made, but to those in which the ambiguity is rather that of description, either equivocal itself from the existence of two subject matter, or two persons, both falling within its terms as can be seen in Section 96, or imperfect when brought to bear on any given person or thing as per Sections 95 and 97. (pages 3132-3133) 30. At this stage, it is also important to advert to the definition of "fact" in Section 3 of the Evidence Act, which is set out hereinbelow: 3. Interpretation-clause.--In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the con....
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....truction Pte. Ltd., [2008] SGCA 27, discussed Section 96 of the Evidence Act of Singapore, which is the equivalent of Section 94 of the Indian Evidence Act. The Singapore Court of Appeal, after setting out the section, held: 77. ... The somewhat narrow wording of Section 96, which refers to the specific situation where the language in a document "applies accurately to existing facts", is probably attributable to its provenance as a Rule of interpretation pertaining to wills. This Section should therefore not be read too restrictively. Like Section 95 of the Evidence Act, Section 96 should be viewed as prescribing a common-sense limit on the use of extrinsic evidence which has been admitted under proviso (f) to Section 94. In Butterworths' Annotated Statutes, it is stated (at p. 275) that: The earlier Section [i.e., Section 95] and the present Section [i.e., Section 96] lay down the outer limits of interpretation in the sense that they mark the place where the language used by the writer must prevail over any extrinsic evidence and the place where extrinsic evidence may prevail over the language. So just as where the language is patently ambiguous it cannot be cured by extri....
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....e have been warranted by its broad and general language. It may be possible to argue that what the court did in Sandar Aung in fact constituted variation of the relevant contractual terms in contravention of Section 94 of the Evidence Act. This issue shall be addressed in greater detail at [122]-[123] below. It remains to be noted that proviso (f) to Section 94 was not discussed in Sandar Aung. Thus, the issue of whether ambiguity was a prerequisite for the application of this proviso and its relationship with the common law contextual approach to contractual interpretation was left open. (B) THE PAROL EVIDENCE RULE 111. As mentioned earlier, in Singapore, the parol evidence Rule lives on in Section 94 of the Evidence Act and has been applied assiduously by the courts in case law. The Singapore courts have always been mindful of the need for contractual certainty, especially in commercial agreements (such as the Policy in the present case). In Forefront Medical Technology (Pte.) Ltd. v. Modern-Pak Pte. Ltd. [2006] 1 SLR 927, the High Court emphasised that not only is "sanctity of contract ... vital to certainty and predictability in commercial transactions", but also: The per....
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.... in the interpretation of the written words. Our courts now adopt, via this proviso, the modern contextual approach to interpretation, in line with the developments in England in this area of the law to date. Crucially, ambiguity is not a prerequisite for the admissibility of extrinsic evidence under proviso (f) to Section 94. (d) The extrinsic evidence in question is admissible so long as it is relevant, reasonably available to all the contracting parties and relates to a clear or obvious context. However, the principle of objectively ascertaining contractual intention(s) remains paramount. Thus, the extrinsic evidence must always go towards proof of what the parties, from an objective viewpoint, ultimately agreed upon. Further, where extrinsic evidence in the form of prior negotiations and subsequent conduct is concerned, we find the views expressed in McMeel's Article and Nicholls' Article persuasive. For this reason, there should be no absolute or rigid prohibition against evidence of previous negotiations or subsequent conduct, although, in the normal case, such evidence is likely to be inadmissible for non-compliance with the requirements set out at [125] and [128]-....
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....ful in the context of the entirety of the correspondence between the parties. 35. This approach is also reflected in a recent judgment of this Court in Transmission Corporation of Andhra Pradesh Ltd. v. GMR Vemagiri Power Generation Ltd., (2018) 3 SCC 716, as follows: 21. In the event of any ambiguity arising, the terms of the contract will have to be interpreted by taking into consideration all surrounding facts and circumstances, including correspondence exchanged, to arrive at the real intendment of the parties, and not what one of the parties may contend subsequently to have been the intendment or to say as included afterwards, as observed in Bank of India v. K. Mohandas [Bank of India v. K. Mohandas, (2009) 5 SCC 313]: (SCC p. 328, para 28) 28. The true construction of a contract must depend upon the import of the words used and not upon what the parties choose to say afterwards. Nor does subsequent conduct of the parties in the performance of the contract affect the true effect of the clear and unambiguous words used in the contract. The intention of the parties must be ascertained from the language they have used, considered in the light of the surrounding circumstances....
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....price of $128 per metric tonne, at around the same time. Hence, the difference between the contractual price and market price was arrived at as $173.383 per metric tonne, in accordance with the law laid down by this Court in Murlidhar Chiranjilal v. Harishchandra Dwarkadas and Anr., (1962) 1 SCR 653, as follows: We may in this connection refer to the following observations in Chao v. British Traders and Shippers Ltd. [(1954) 1 All ER 779, 797] which are apposite to the facts of the present case: It is true that the Defendants knew that the Plaintiffs were merchants and, therefore, had bought for re-sale, but everyone who sells to a merchant knows that he has bought for re-sale, and it does not, as I understand it, make any difference to the ordinary measure of damages where there is a market. What is contemplated is that the merchant buys for res-ale, but, if the goods are not delivered to him, he will go out into the market and buy similar goods and honour his contract in that way. If the market has fallen he has not suffered any damage, if the market has risen the measure of damages is the difference in the market price. In these circumstances this is not a case where it ca....
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....the letters dated 27.11.2009 or 03.12.2009 do not reflect the market price of coal as on the date of breach or that the market price of coal cannot be established from the special long-term contracts operating at around the same time as the date of breach. This argument must therefore be rejected. 41. The present case is that of an international commercial arbitration, the Majority Award being delivered in New Delhi on 12.05.2014. Resultantly, this case has been argued on the basis of the law as it stood before the Arbitration and Conciliation (Amendment) Act, 2015 ["Amendment"] added two explanations to Section 34(1) and Sub-section (2A) to Section 34 of the Arbitration Act, in which it was made clear that the ground of "patent illegality appearing on the face of the award" is not a ground which could be taken to challenge an international commercial award made in India after 23.10.2015, when the Amendment was brought into force. We, therefore, proceed to consider this case on the pre-existing law, which is contained in the seminal decision of Associate Builders (supra). 42. The judgment in Associate Builders (supra) examined each of the heads set out in Renusagar Power Co. Ltd.....
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....ct cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts. In P.R. Shah, Shares & Stock Brokers (P) Ltd. v. B.H.H. Securities (P) Ltd. [(2012) 1 SCC 594], this Court held: (SCC pp. 601-02, para 21) 21. A court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or reappreciating the evidence. An award can be challenged only under the grounds mentioned in Section 34(2) of the Act. The Arbitral Tribunal has examined the facts and held that both the second Respondent and the Appellant are liable. The case as put forward by the first Respondent has been accepted. Even the minority view was that the second Respondent was liable as claimed by the first Respondent, but the Appellant was not liable only on the ground tha....
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....n a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do. (page 81) 43. This judgment has been consistently followed in a plethora of subsequent judgments, including: a. National Highways Authority of India v. ITD Cementation India Ltd., (2015) 14 SCC 21 at paragraph 24 (page 38); b. Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd., (2017) 2 SCC 228 at paragraph 45 (page 252); c. Venture Global Engg. LLC v. Tech Mahindra Ltd., (2018) 1 SCC 656 at paragraph 85 (page 687); d. Sutlej Construction Ltd. v. State (UT of Chandigarh), (2018) 1 SCC 718 at paragraph 11 (page 722); e. Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd., (2018) 3 SCC 133 at paragraph 51 (page 169); f. HRD Corporation v. GAIL (India) Ltd., (2018) 12 SCC 471 at paragraphs 18-19 (page 493); g. M.P. Power Generation Co. Ltd. v. ANSALDO Energia SpA, (2018) 16 SCC 661 at paragraph 25 (page 679); h. Shriram EPC....
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.... findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts. (See Associate Builders v. DDA, (2015) 3 SCC 49. Also see ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705; Hindustan Zinc Ltd. v. Friends Coal Carbonisation, (2006) 4 SCC 445; and McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181) 13. It is relevant to note that after the 2015 Amendment to Section 34, the above position stands somewhat modified. Pursuant to the insertion of Explanation 1 to Section 34(2), the scope of contravention of Indian public policy has been modified to the extent that it now means fraud or corruption in the making of the award, violation of Section 75 or Section 81 of the Act, contravention of the fundamental policy of Indian law, and conflict with the most basic notions of justice or morality. Additionally, Sub-section (2-A) has been inserted in Section 34, which provides that in case of domestic arbitrations, violation of Indian publ....
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....the correspondence between the parties and the oral evidence adduced, that the agreement does not make any distinction within the type of customers, and furthermore that the supplies to HTPL were not made in furtherance of any independent understanding between the Appellant and the Respondent which was not governed by the agreement dated 14-12-1993. (pages 166-168) 46. Likewise, in Dyna Technologies Pvt. Ltd. v. Cromptom Greaves Ltd., ["Dyna Technologies"], this Court held: 26. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various Courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the Court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate Under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute ad....