SWAN GOLD MINING LTD Vs. HINDUSTAN COPPER LTD

JUDGEMENT

(1.) Hindusthan Copper Limited (hereinafter referred to as HCL) had several mines rich with natural resources being metallic ores. HCL floated a global tender for extraction of copper ore at their mine at Surda. The work was named as "Operation of Surda Mine and Mosaboni Concentrator Plant of HCL". The appellant being an Australian party became successful in obtaining the tender. The tender would stipulate bid to be given in two parts being Techno Commercial Bid and Price Bid. On January 2, 2007, appellant submitted their first bid that was opened on January 18, 2007. Their Techno Commercial Bid was accepted in a meeting held on January 18/19, 2007. After crossing the first hurdle, appellant got opportunity to participate in the price bid that was opened on January 19, 2007. On negotiation appellant gave their second bid on January 27, 2007. HCL asked for clarification that was replied to. The modified terms were given on February 13, 2007. Ultimately, the final offer was accepted on February 15, 2007 appearing at page 137. The Letter of Intent was issued on March 3, 2007 appearing at page 152 and ultimately the parties entered into a formal contract appearing at pages 153-155. HCL issued a Work Order on April 14, 2007 that permitted the appellant to commence extraction. The parties were on cordial terms up to December 2007 when the dispute for the first time arose on submission of the first invoice. In fact, the dispute took a concrete shape in March 2008 when HCL declined to pay the Excise Duty.

(2.) On a close examination of the documents referred to above, we would find, initially the bids that were given from time to time always included Excise Duty to be borne by HCL. When the final offer came on February 15, 2007, the parties were silent on Excise Duty. The formal contract also did not mention anything on that score. The Work Order would suggest Excise Duty to be borne by the appellant. The appellant would contend, their representative at the site missed out clause 4.9.1 that would shift the burden of taxes on the appellant. The dispute arose when the invoice included Excise Duty to be paid by HCL. Initially there was no response. On reminders, HCL for the first time raised the dispute in March 2008 to contend that the Work Order did stipulate as above that would bind the parties. The dispute was thus referred to arbitration. We are told, the appellant would still involve itself in the operation however, the issue would still remain unresolved. The arbitrator, a retired Judge of this Court held, it was the obligation of the appellant. The learned Single Judge affirmed. Hence, this appeal by the appellants.

(3.) Mr. Surajit Nath Mitra, learned Senior Advocate, while referring to the relevant dates mentioned above, would contend, the parties knew that the bid initially given by the appellant would exclude Excise Duty as categorically mentioned in their price bid. He would refer to page 123 wherein we find the following clause :