STATE OF ORISSA ORISSA MINING CORPORATION KLOCKNER AND COMPANY Vs. KLOCKNER AND COMPANY:KLOCKNER AND COMPANY:ORISSA MINING CORPORATION LIMITED

JUDGEMENT

(1.) The above Civil Appeals arise out of an Order passed in Misc. No. 426/93 in T. S. 152/93 on the file of Civil Judge. Bhubaneswar dated 16-4-94 which was later upheld by the Orissa High Court by Order dated 12-5-95. Against a single Order of the learned Civil Judge, Bhubaneswar in M. C. No. 426/93, the State of Orissa filed one Miscellaneous Appeal No. 553/94 and Civil Revision Petition No. 262/94 before the Orissa High Court on the plea that there was a doubt whether an appeal or revision petition would lie against the Order of the Civil Judge in the said Miscellaneous Case. The High Court rendered its decision in Civil Revision Petition No. 262/94. However, while moving this Court, the State of Orissa not only filed two Special Leave Petitions against the common Order of the Orissa High Court in Civil Revision and Civil Miscellaneous Appeal but also preferred independent Special Leave Petition against the Order of Civil Judge. Bhubaneshwar in Miscellaneous Case No. 426/93. Likewise, the Orissa Mining Corporation (appellant in C.A. Nos. 7574-76/95 and third respondent before the High Court), has also filed three Special Leave Petitions against the common order of the High Court and of Civil Judge. After leave was granted, all these Special Leave Petitions were numbered as Civil Appeals as mentioned above.

(2.) Brief facts, shorn of details, necessary for the disposal of these Appeals are as under:- The first respondent herein, namely, Klockner and Company, entered into an agreement on 20-4-82 described as "Marketing Agreement" with Orissa Mining Corporation (hereunder referred to as "O.M.C." for short), a Government of Orissa Undertaking. We are not giving all the clauses in the agreement under consideration. The said agreement inter alia stipulated that O.M.C. will establish a plant at Bamnipal in the district of Keonjhar, Orissa, for production of "charge chrome" (hereinafter called as the "product"). It (OMC) agreed to market the said product exclusive through Klockner and Co. upon the terms and conditions contained in the said agreement to which Klockner and Co. gave acceptance. The agreement stipulated that during the currency of the agreement, O.M.C. shall not be entitled to market its product by direct contract with purchasers nor shall it be entitled to market its product through any agent or distributor other than the Klockner and Co. That during the currency of the agreement, the Klockner and Co. shall not be entitled to purchase the product from any source in India other than O.M.C. One important clause in the agreement is that the delivery of the product shall commence by April 1985 and shall continue over a period of five years but it will not come to an end until a total quantum of 250,000 MT of the product was delivered. There is also a clause in the agreement enabling the parties to extend the period by mutual consent. According to another clause in the agreement if the agreement is terminated by mutual consent or cancelled, then notwithstanding the termination/cancellation of the agreement, the parties shall remain responsible for the fulfilment of any obligations which are outstanding at the time of termination/cancellation of the agreement. It was agreed that OMC will pay to Klockner and Co. a commission on the sale of the product effected in the territory in consideration of the services rendered by it in terms of the agreement and the commission shall be 4% of the final FOB value of the product sold. The said commission shall be payable to Klockner and Co. by way of reduction from each invoice. Another important clause for the purpose of disposal of these Appeals is Clause 15 in the agreement which relates to arbitration. It reads as follows:

(3.) Subsequent to the original agreement as mentioned above, another agreement was entered into on 16-2-87 between OMC and Orissa Mining Corporation (Alloys) Ltd. which is a wholly owned subsidiary company of OMC to implement and establish 100% export oriented unit at Bamnipal for manufacturing inter alia charge chrome in which it was stipulated that OMC has already entered into a marketing arrangement with Klocker and Co. of the Federal Republic of Germany under which OMC is to market the products of Alloys exclusively through Klockner and Co. and that Alloys products would be handled through the agency and instrumentality of the OMC on the basis of OMC agreement with Klockner and Co. and the terms and conditions of the marketing agreement between OMC and Klockner and Co. dated 20th April, 1982 will be treated as if OMC (Alloys) replaced OMC. It is not in dispute that the agreement was acted upon by the parties and pursuant to that 108.429 MT of charge chrome were delivered leaving a balanced of 141.571 MT of Charge Chrome undelivered as per the agreements.