MAHARASHTRA STATE ELECTRICITY BOARD Vs. STERILITE INDUSTRIES INDIA

JUDGEMENT

(1.) On certain disputes having arisen between the Maharashtra State Electricity Board and Sterilite Industries (India) in connection with the failure to supply certain goods the matter was referred to Arbitral Tribunal consisting of three arbitrators. The petitioners made a claim in a sum of Rs. 70,28,572.05p. as damages for breach of contract sustained by them on account of failure of the respondents to supply the entire material ordered from them. In addition to this claim for damages, interest on the said amount at 18% per annum for the period between May 9, 1989 to October 29, 1990 amounting to Rs. 18,62,571.55p. was also made. Thus the total claim for damages and interest is in a sum of Rs. 88,91, 143.16p.

(2.) It is stated that the contract for supply of goods was cancelled by the petitioners on April 17, 1989 on the basis that the material which was not supplied by the respondents was procured by the petitioners from other suppliers at a price much higher than what was tendered by the respondents. The petitioners referred to various orders placed by them with different parties. The damages were thus claimed on the basis that the material which was not supplied by the respondents was actually purchased or procured by the petitioners and the damages were computed on the ground of higher price being required to be paid in order to make good the short supply by the respondents. The claim of the petitioners was contested by the respondents on several grounds.

(3.) The arbitrators raised two issues for consideration, which are as follows :-