DGS AND D Vs. EUPHARMA LABORATORIES LTD

JUDGEMENT

(1.) OMP No.287/99 The petitioner invited tenders for supply of tablets Folic Acid and Ferrous Sulphate (large) in pursuance to an international competitive bidding process funded by the IDA/ World Bank Loans under the project of Ministry of Health and family Welfare called 'Child Survival and Safe Motherhood Project'. The invitation to bid provided that the bidders offering indigenous goods should quote net prices after taking into account in their bids any benefits available for supplies against IDA credits/IBRD loans through international bidding regarding deemed exports on the goods offered under the same. Thus quoted price for the goods was to be offered without without including in the price the component of excise duty in view of deemed export benefits. This particular aspect has formed subject matter of the disputes between the parties.

(2.) The contract was ultimately awarded to the respondent but there is prior history to the award of the said contract. The contract was awarded to a third party and the petitioner impugned the same in the writ proceedings before this court. The writ petition was allowed and the award to the M/s Sudershan Pharmaceutical was quashed on the ground that a valid licence for manufacture was not available with the said third party and the third party was not qualified for the same. A direction was issued in the writ proceedings that the bid of the respondent be accepted on the same terms and conditions. The matter went up to the Apex Court but the Special Leave Petition was dismissed by the order dated 04.04.1994. After these proceedings, the contract was awarded to the respondent by the notification dated 24.05.1994 for a sum of Rs 1,81,51,292/-. The agreement contained an arbitration clause no.26 and since certain disputes arose between the parties, the same were referred to arbitration. The sole arbitrator Mr. N.N.Goswamy was appointed by the Indian Council for Arbitrations, who made and published his award on 05.05.1999 and the petitioner aggrieved by the same has filed the present objections under section 34 of the Arbitration and conciliation Act 1996 (herein after referred to as the said Act).

(3.) The arbitrator has considered the controversy between the parties and has recorded that it was not disputed that the petitioner had to issue the necessary certificate for deemed export benefits to the respondent as per the formal contract which was executed on 28.06.1994 since it was agreed that in terms thereof that a number of documents shall form part of the contract. The goods were supplied by the respondent in discharge of the obligations and the amounts were paid against the same. Apart from this goods worth Rs 10 lakh were supplied free as per the directions of the High Court.