BELCOM JV Vs. MMTC LTD.

JUDGEMENT

(1.) The present appeal, under Sec. 37 of the Arbitration and Conciliation Act (hereafter "the Act") is directed against the judgment and order of a learned Single Judge, dated 17.02.2010 in OMP 40/2000. The impugned judgment dismissed the objections of the appellant (hereafter "MMTC") to the majority award of a three member Arbitral tribunal (hereafter "the Tribunal") dated 23.08.1999. The award had directed payments to the claimant/respondent (hereafter "Belcom") by MMTC.

(2.) The facts relevant for this case are that on 14.10.1991, Contract No.35 was executed between MMTC and Belcom for sale of 50,000 metric tonnes of Muriate of Potash (MOP) at a price of Rs. 2,766.50 per metric ton. This was an F.O.B. contract.. The said contract contained a payment clause by which MMTC was to open a Letter of Credit with the Bank for Foreign Trade of USSR, Minsk - Bank of Foreign Economic Affairs [hereafter "BFEA"], valid for a period of 90 days. The relevant portion of the payment clause is reproduced herein below:

(3.) On 24th Oct., 1991, MMTC, the purchaser opened a Letter of Credit for 25,000 metric tonnes, valid for 90 days, i.e. valid till 22nd Jan., 1992. On 15/16.12.1991, documents were presented to the MMTC's banker, the Oriental Bank of Commerce [hereafter "OBC"], which then was obliged in terms of the LOC to make payment in accordance with its terms and in accordance with international banking practise and customs. However, Belcom, fearing disintegration of the USSR, wrote to MMTC on 18.12.1991 directing them to not release payment for the shipment of MOP by vessel "Indian Renown". On this basis, MMTC by its letter dated 20.12.1991 instructed its banker OBC, to not pay under the said LOC.