J K INDUSTRIES LTD Vs. TEXMACO LIMITED

JUDGEMENT

(1.) OBJECTIONS U/s. 30 and 33 of the Indian Arbitration Act, 1940 are for consideration.

(2.) THE disputes between the parties arose out of purchase order dated 10th September, 1982 placed by the plaintiff J. K. Industries ltd. on the defendant M/s. Texmaco Ltd. for supply of Texmaco VU-50 Type Coal fired Water Tube Boiler of 30,000 kgs per hour continuous rating of steam at a working pressure of 300 PSIG at the works of the plaintiff at Kankroli, Rajasthan. The value of the contract was Rs. 91. 45 lakhs. The plaintiff paid Rs. 111. 14 lakhs against the defendants bills of Rs. 120. 55 lakhs. The plaintiff withheld payment of Rs. 9. 41 lakhs. The plaintiff also realized a sum of Rs. 4,57,230/- from the performance bank guarantee furnished by the defendant in terms of the purchase order. It was the case of the plaintiff that since the commissioning of the boiler in June 1984, the plaintiff had been facing problems inter alia on account of substandard workmanship faulty design and defective material. It was further alleged that the boiler had failed to give the steam at the rated capacity and on the account of breakdowns the boiler had to be shut down several times. It was further contended that in spite of various measures taken by the defendant on complaints by the plaintiff, the boiler was never able to achieve the rated capacity.

(3.) IN accordance with the arbitration clause in the purchase order, the disputes and differences which had accrued between the parties were referred to the Federation of the Indian Chambers of commerce and Industries (FICCI ). FICCI in accordance with its rules constituted an arbitral Tribunal of three arbitrators, one arbitrator being nominated by each of the parties and the presiding arbitrator being nominated by FICCI.