RELIANCE INDUSTRIES LIMITED Vs. BALASORE ALLOYS LIMITED

JUDGEMENT

(1.) By this petition filed under section 34 of the Arbitration & Conciliation Act, 1996, petitioner seeks to impugn award dated 3rd July, 2008 in terms of the majority award dated 20th June, 2008 and the minority award dated 23rd June, 2008 rejecting the claims made by the petitioner.

(2.) Some of the relevant facts for the purpose of deciding this petition are as under :

(3.) Dr. Sathe, learned senior counsel appearing for the petitioner, submits that under the agreement entered into between the parties, petitioner was to avail of purchase of furnace oil at the concessional price which was lower than the market price and out of the difference between the market price and concessional price, petitioner had agreed to pay the premium to the respondent as and by way of consideration for transferring the advance release orders in favour of the petitioner. It is submitted that the petitioner was assured that any variation in the price upwards or downwards, that is price mentioned in the agreement and any variation, was to be settled by raising debit notes by the respondent. Petitioner was assured that the supply of furnace oil at the fixed price and any revision both upward as well as downward was to be on account of the respondent. The respondent had indemnified the petitioner under the said agreement and agreed to undertake and indemnify against any losses and damages that may be suffered and sustained by either party by reason of any breach of terms and provisions of the agreement. It is submitted that the moment liability was incurred by the petitioner on account of oil companies debiting the account of the petitioner, for adjusting their claims, towards the so called upward revision of price in furnace oil, the petitioner had incurred liability contrary to agreement dated 21st October, 1994 and that liability was required to be compensated in terms of both the clauses providing payment as well as indemnity by the respondent. It is submitted if the petitioner had not entered into the said agreement with the respondent, petitioner could have bought the furnace oil at the market price directly from the oil companies and not necessarily against the advance release orders purchased from the respondent.