MYSORE CEMENT LIMITED Vs. SVEDALA BARMAC LIMITED

JUDGEMENT

(1.) Leave granted.

(2.) The question that arises for consideration in this appeal is whether a Letter of Comfort furnished on the same day of a Settlement arrived at during conciliation signed by both the parties and authenticated by the Conciliators is enforceable in the same manner as an arbitration award under Section 74 read with Sections 30 and 35 of the Arbitration and Conciliation Act, 1996

(3.) The appellant-Mysore Cements Limited contracted by its letters dated April 22, 1994 and July 30, 1994 with the respondent-Svedala Barmac Limited, a company based in New Zealand, for the supply and commissioning of two sets of Barmac 9600 DUOPACTOR rock-crushing machines for its cement plant at Damoh vide two separate letters dated July 30, 1994. Mysore Cements also contracted with another subsidiary of Barmac Ltd. for the supply and commissioning of four Vibrating Ripo flo screens. On failure of machinery to crush limestone in accordance with the respondents assurances, the appellant served a notice for arbitration on the respondent. However, at the respondents request subsequently, the appellant agreed to conciliation at New Delhi. As a result, a "Memorandum of Conciliation" dated December 18, 1987 was signed by both the parties and authenticated by the Conciliators. According to the appellant, on the same day, as a part of the same transaction and pursuant to the Clauses 9 and 10 of the said Memorandum to compensate the appellant in case of failure of completion or modification of the work on two lines, a letter was sent to the parties signed by the same Marketing Director, Mr. Ian Rodger, who had signed the Memorandum of Conciliation. According to the appellant, this Letter of Comfort, having regard to the stipulations and undertakings contained in the Memorandum of Conciliation, formed part of the said Memorandum and that the parties had finally and conclusively determined the amount of compensation to be paid monthly by the respondent to the appellant until the machinery was set right. The appellant approached the High Court for enforcement of the same through execution. A learned single Judge of the High Court dismissed the execution petition holding that the alleged decision of the Conciliators is not a decision within the meaning of Section 74 of the Arbitration and Conciliation Act, 1996 (for short the Act) and further assuming it to be a decision of the Conciliators, there was no finding whereby the Conciliators had fixed any compensation to be paid to the appellant in case the work was not completed within the stipulated period. This order of the High Court dated 4th May, 2000 dismissing the execution petition filed by the appellant is under challenge in this appeal.