ATLAS EXPORT INDUSTRIES Vs. KOTAK AND COMPANY

JUDGEMENT

(1.) The appellant, the Atlas Export Industries, Junagadh (hereinafter 'Atlas', for short) entered into a contract dated 3rd June, 1980 with M/s. Oceandale Company Limited, Hongkong (hereinafter 'Oceandale', for short). The agreement was for the supply of 200 MT of Indian groundnut extractions of the specifications as to quantity, quality and packages detailed in the contract and to be shipped on or before 30th June, 1980. The price was agreed at US $ 200 per M.T. The goods were to be supplied through M/s. Kotak and Company, Bombay (hereinafter 'Kotak', for short). M/s. Prashant Agencies, Bombay were the brokers. The existence of the contract, to which Atlas, Oceandale and Kotak were the parties, is not in dispute. Kotak were at all times responsible for the performance on behalf of the final buyers Oceandale. The letter of credit was opened by Oceandale in favour of Kotak who then transferred it in favour of Atlas. The letter of credit was opened at US $ 203 whereas Kotak's purchase from Atlas was at US $ 200. It was agreed upon between Atlas and Kotak that the difference would be paid locally by Atlas to Kotak in Indian rupees. The time for shipment was extended by mutual agreement between the parties and correspondingly the period of validity of the letter of credit was also extended. However, still there was failure to ship the goods by the time appointed by the contract and as extended which resulted into a dispute arising between the parties.

(2.) The contract dated 3rd June, 1980 incorporated an arbitration clause which is extracted and reproduced hereunder:-

(3.) 'GAFTA' stands for the Grain and Food Trade Association Ltd., London, Clause 27 of the Standard Contract 15 of the GAFTA provides as under:-