MADHU KACHARAM ACHRA Vs. GUL KACHHARAM ACHRA

JUDGEMENT

(1.) By this petition filed under section 34 of the Arbitration and Conciliation Act, the petitioner challenges the award dated 21st July, 2003 passed by the Arbitral Tribunal. The Arbitral Tribunal by that award has rejected the claim made by the petitioner.

(2.) The facts that are material and relevant for deciding this petition are : the disputes between the parties arose out of a contract dated 16th June, 1995 for charter hire of a jack up rig by the respondent from the petitioner, who was owner of the rig. The contract between the parties was to commence from 10th April, 1995. The primary term of the contract was for one year i. e. 10th april, 1995 to 9th April, 1996. Admittedly by the second addendum, as permissible under clause 1.3 (a) of the contract, the period was further extended for one year from the date and time of the completion of the well in progress. As a result the extended term of contract was to expire on 22-4-1997. However, the respondent under their letter dated 16-4-1997 in exercise of their option under clause 1.3 (c) of the contract had extended the period of the contract by 16 days and 9 hours and that extended term of the contract was to expire on 8th May, 1997. Admittedly, the work of drilling at the location WO-16-5 was completed/abandoned on '28th April, 1997. The contract came to an end admittedly on 8th May, 1997. The claim of the petitioner before the arbitral tribunal was that the petitioner is entitled to payment for the period from 29-4-1997 to 8th May, 1997 at the stand by rate, whereas according to the respondent the petitioner is entitled to payment at 0 rate.

(3.) The respondent by their letter dated 24th April, 1997 informed the petitioner that the abandonment process of the well on which work was going on was likely to be completed on 28-4-1997. The respondent, therefore, directed the petitioner to make arrangement to move the rig to the next location i. e. B-193-E and to intimate in advance the action plan in case any repair job was to be carried out to the rig before the next movement. The petitioner by their letter dated 25-4- 1997 expressed surprise at the respondent's letter dated 24-4-1997 and stated that as the respondent knew that the contract period was to expire on 8-5-1997, they wondered how the respondent could expect the petitioner to complete the new well before expiry of the contract. The petitioner by their letter dated 26th April, 1997 contended that considering that the contract was to expire on 8-5-1997, the direction contained in the letter dated 24-4-1997 was not legally binding on the petitioner. By letter dated 28-4-1997 the respondent directed the petitioner to comply with the direction contained in the letter dated 24-4-1997 and stated that they were entitled to issue that direction as the contract was valid and in existence till 8-5-1997. According to the petitioner, the work on the existing well was completed by 13:30 hours on 29-4-1997. At that point the petitioner was under no legitimate orders to move to the next location and therefore it was the duty of the respondent to remove their men and material and supplies from the rig. According to the petitioner as the respondent did not remove their men and material from the rig, the petitioner was not in a position to take the rig away and therefore, according to the petitioner in terms of the contract they were entitled to the stand by charges.