P T TIRTAMAS COMEXINDO Vs. DELTA INTERNATIONAL LIMITED

JUDGEMENT

(1.) This is an appeal from an order dated 10th June, 1998 passed by the Learned Single Judge under Section 9 of the Arbitration and Conciliation Act, 1996 (hereafter referred to as the Act) by which the appellant has been asked to furnish a bank guarantee for Rs. 1 crore within a specified period failing which pulses exported by the appellant from Myanmar to Mumbai would be separately stored.

(2.) The issues which have been raised in this appeal are summarised at the outset :

(3.) These issues arise in the background of the following facts - The appellant is an Indonesian Company. It carries on business in Indonesia. Its business consists of exporting/arranging for the export of pulses. In the course of its business it entered into three separate contracts in writing with the respondent No. 2. The respondent No. 2 is incorporated under the relevant laws of Singapore where it also has its registered office. The three contracts between the appellant and the respondent No. 2 are respectively dated 30th July, 1997 being Contract No. 320171, 28th August, 1997 being Contract No. OGVL/PC/97/010 and 4th October, 1998 being Contact No. OGVL/PC/97/012A. Each of these there contracts provide for sale of diverse quantities of pulses from the Union of Myanmar. The destination in the first contract was "Any destination to be declared by the buyer at the time of vessel nomination"; the destination in the second contract was mentioned as "Mumbai, India"; and the destination in the third contract was "Mumbai/Tuticorin, India".The respondent No. 1 is a company having its registered office in Calcutta. According to it all the three contracts were superseded by an oral agreement between the appellant and the respondent No. 1 referred to as the "new contract". It is the respondent No. 1's further case that it was agreed that pulses which were the subject matter of the three contracts would be bought by the respondent No. 1 on FOB basis and at the rates mentioned in the three contracts. According to the respondent No. 1 this agreement was confirmed by a letter dated 22nd December, 1997 sent by facsimile by the respondent No. 1 to the appellant in Indonesia. The letter contains the terms and conditions including an arbitration clause allegedly agreed to in respect of the sale of the pulses by the appellant to the respondent No. 1.