V O TVAZHPROMEXPORT Vs. MUKAND LIMITED

JUDGEMENT

(1.) By this petition, the petitioner challenges the Award made by the sole arbitrator directing the petitioner to pay the respondent the sum that is mentioned in the operative part of the award.

(2.) The facts that are material and relevant for deciding this petition are that the petitioner had entered into a contract of sale with the respondent for supply of the quantity mentioned in the contract of Low Ash Matallurgical coke at the price stated in the contract. Admittedly, part of the agreed quantity was supplied by the petitioner to the respondent, but admittedly the petitioner did not supply the entire agreed quantity. On failure of the petitioner to supply the entire agreed quantity, the goods were purchased by the respondent from other party admittedly, this purchase was made by the respondent at a rate higher than the rate at which the petitioner had agreed to supply the material to the respondent. While the material was in the process of being supplied to the respondent, the respondent sold the material to a third party on high seas sale. Admitted position is that in this transaction the respondent has made a profit. The claim of the respondent in the arbitration was for damages against the defendant for committing breach of the contract by not supplying the agreed quantity of Coke. The principal defence of the petitioner was that though the petitioner failed to supply the entire agreed quantity of coke to the respondent, as a result the respondent was required to purchase the material from third party, the material purchased by the respondent from the third party was sold by the respondent at a profit and therefore it has not actually suffered any loss because of the breach of contract committed by the petitioner. The arbitrator by the award found that the defence raised by the petitioner has no substance and that the respondent is entitled to the damages.

(3.) It is submitted by the learned Counsel appearing for the petitioner by referring to the provisions of section 73 of the Act that when because of the failure of the petitioner to supply the agreed quantity to the respondent, the respondent made the purchases, he was under a duty to mitigate the loss suffered by him because of the breach of the contract committed by the petitioner. It is submitted that such a step was taken by the respondent when he sold the coke purchased by him and as a result of that sell, in fact the respondent did not suffer any loss. In short, it is submitted by the learned counsel appearing for the petitioner that because of the failure of the petitioner to supply the agreed quantity to the respondent, the respondent has not actually suffered any loss and therefore the respondent is not entitled to claim any damages from the petitioner.