SPENTEX INDUSTRIES LTD. Vs. DUNAVANT SA AND ANR.

JUDGEMENT

(1.) THE counsel for the plaintiff has been heard on the aspect of maintainability of the suit on the first date of hearing of the suit itself. Yet another suit being CS(OS)1038/2009 involving the similar question as to maintainability as in the present suit was listed yesterday for admission. Doubts having been expressed as to the maintainability of that suit, the same was also posted for hearing on maintainability today. The senior Counsel for the plaintiff in CS(OS)1038/2009 has also been heard alongwith the counsel for the plaintiff in the present suit. However, separate order is pronounced with respect to CS(OS) No. 1038/2009.

(2.) THE plaintiff herein, an Indian company, inter alia, carrying on business as manufacturer and merchandiser of yarn and yarn products has instituted the present suit against the defendant No. 1, a Swiss company trading in Uzbek raw cotton crop, also through their Indian agent an Indian company impleaded as defendant No. 2. It is the case of the plaintiff that the defendant No. 1 through the defendant No. 2 had approached the plaintiff for sale and Uzbek raw cotton crop; that the defendant No. 2 on behalf of the defendant No. 1 had negotiated with the plaintiff; a sample was also supplied to the plaintiff; the plaintiff got the said sample tested and found the same as per its requirement; that the plaintiff thereafter expressed interest to purchase 750 MT of the said goods in three instalments; that the defendant No. 1 through the defendant No. 2 placed sales confirmation on the plaintiff; that the said 750 MT of Uzbek Raw Cotton was to be shipped in three consignments of 250 MT each; in pursuance to the sale confirmation, a standard form of contract was issued by the defendant No. 1; the said contract had some errors and it was reissued; that though it was contemplated that each of the three installments shall be of 250 MT each, but subsequently the first two consignments were agreed to be of 225 MT each for which the plaintiff was to open independent Letter of Credit (LC) and the last consignment of 300 MT; that it was further agreed between the plaintiff and the defendant No. 2 that only after the first two consignments had been received and found to be as per specifications and sample, the Letter of Credit for the third consignment of 300 MT would be opened; that variation in the agreement with the defendant No. 2 as the agent of the defendant No. 1 was in consonance with the market custom and the practice of trade and not documented, though emails in confirmation of the same are pleaded to have been exchanged.

(3.) THE plaintiff, upon the receipt of communication from International Cotton Association to appoint the plaintiffs arbitrator, admits to have been constrained to appoint an arbitrator. The International Cotton Association appointed the third arbitrator/chairman. The plaintiff has in the plaint in para 24 averred that the plaintiff had owing to the defective quality of goods of the first two consignments suffered loss of USD 3,52,378. The plaintiff has in para 27 of the plaint further averred that the arbitral tribunal so constituted "on the said filing of the claim and counter claim by the parties, ignoring and declining the plaintiff's request to represent and explain the chairman/arbitration tribunal in person, passed an arbitral award in haste vide order/award dated 9.4.2009".