MOHAN STEELS LIMITED Vs. STEEL AUTHORITY OF INDIA

JUDGEMENT

(1.) Present petition had been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act") seeking to set aside the Award dated 01.07.2015 passed by the Sole Arbitrator as also seeking a declaration that the recovery made by the respondent is illegal and arbitrary.

(2.) Brief facts germane to the present petition are that the petitioner was appointed as a Conversion Agent for the first time in the year 2006 by the respondent which is a Government Company for conversion of TMT Bars. A contract was entered into for a period of three years i.e. from 2006 till 2009 (hereinafter referred to as "Contract-I") Under Contract-I, conversion charges payable to the petitioner were to be increased @ 2% every year. Consequently, the respondent revised the conversion charges for the year 2007-2008 vide letter dated 17.03.2007 as well as for the year 2008-2009 vide its letter dated 30.05.2008 and accordingly reimbursed the money at increased rate every year till the conclusion of Contract-I.

(3.) On 05.02.2009, petitioner entered into a fresh agreement with the respondent (hereinafter referred to as "Contract-II"). Contract-II had a different clause with regard to the rates of escalation and reads as under: