AMRUTANJAN LIMITED Vs. SHAMROCK INTERNATIONAL LIMITED

JUDGEMENT

(1.) This Arbitration Petition challenges an award passed by a Sole Arbitrator on 30 July 2010. By the impugned award, the Arbitrator awarded a sum of Rs.1,72,73,907/-to the Respondent and also allowed the Respondent to set off a sum of Rs.39,70,000/-payable by the Respondent to the Petitioner against the sum awarded, leaving a sum of Rs.1,33,03,607/- as payable by the Petitioner to the Respondent together with interest @ 10 % p.a. from the date of the award till payment. The Arbitrator also awarded costs of Rs.5 lacs to the Respondent. The short facts of the case may be stated as follows.

(2.) The Respondent, who was the claimant before the Arbitrator, deals in exports of Pharmaceuticals and Intermediates to overseas customers. The Petitioner is a manufacturer of Pharmaceuticals and chemical products. By a Memorandum of Understanding (for short "MOU") dated 9 June 2001 entered into between the parties, the Respondent placed two purchase orders on the Petitioner for supply of 2,500 kgs each of product known as 'CIS + lactum.' The Petitioner could not deliver the purchase orders during the period of the MOU. The parties, thereafter, entered into a supply agreement dated 23 January 2002. The supply agreement inter alia provided that 60,000 kgs of the product would be delivered by the Petitioner to the Respondent in a period of one year starting from January 2002 and ending in December 2002. The delivery schedule was to be mentioned by the Respondent in the individual purchase orders that were to be issued in pursuance of the contract. The price was mutually arrived at Rs. 1,550 per kg including cost, insurance, freight, transportation, packing, testing and other charges. The price was applicable for all supplies effected till 31 March 2002. From April 2002, the price could be mutually revised by the parties but such price was not to exceed to Rs.1550 per kg for the balance quantity supplied upto December 2002. The contract also provided that the Respondent had the right to claim from the Petitioner any additional expenses that the former might have to incur on account of partial supplies, non deliveries, additional freight charges in case the material had to be sent by air on urgent basis, etc. The validity of the agreement was for a period of one year from the date of signing of the agreement. The agreement contained an arbitration clause. Pursuant to the supply agreement, the respondent placed from time to time purchase orders on the Petitioner for supply of the product. Each purchase order stipulated the quantity required and the date of delivery. It was the case of the Respondent before the Arbitrator that the deliveries were delayed by the Petitioner, resulting into the Respondent incurring heavy losses. It was also the case of the Respondent that some of the deliveries were not effected at all by the Petitioner. The Respondent also alleged breach of particular clauses of the supply agreement. As a result of these disputes, the following claims were made by the Respondent against the Petitioner, all of which were referred to the Sole Arbitrator:

(3.) The learned Arbitrator, in the impugned award, awarded claim 'A' referred to above fully and claims 'B' to 'E' partly, rejecting the claims 'F', 'G' and 'H'. The learned Arbitrator awarded the counterclaim of the Petitioner in the sum of Rs.39,70,000/-and allowed the Respondent to set off this counterclaim against the amount awarded to the Respondent. The learned Arbitrator also awarded post award interest and costs quantified at Rs.5 lacs to the Respondent. This award is the subject matter of challenge in the present Petition.