Full Judgment Text
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CASE NO.:
Appeal (civil) 1427 of 2004
PETITIONER:
National Aluminium Co. Ltd.
RESPONDENT:
Gerald Metals SA
DATE OF JUDGMENT: 27/02/2004
BENCH:
N Santosh Hegde & B P Singh
JUDGMENT:
J U D G M E N T
(Arising out of SLP(C)No.3202 of 2004)
SANTOSH HEGDE,J.
Heard learned counsel for the parties.
Leave granted.
This appeal arises out of a dispute between the parties to
this appeal which under an agreement between the parties has to
be referred to arbitration as contemplated under Clause 26 of
the agreement between the parties.
Pending disposal of the said dispute by the arbitrators the
respondent herein moved an application under section 9(d) of
the Arbitration and Conciliation Act, 1996 praying for the grant
of ex parte injunction restraining the appellant herein from
transferring or alienating the earmarked alumina lying in the
appellant’s Silos in Vishakapatnam Port area to any party other
than the respondent herein.
The said application was opposed by the appellant herein
on various legal and factual grounds including the
maintainability of the application as also the jurisdiction of the
trial court to make any interim order under the said provision of
the Act.
The trial court after hearing the parties however
considered it appropriate to make the following interim order :
"In the result, the application is allowed and the
respondent shall allow the despatch of cargo to the petitioner
immediately on payment of original price to the respondent,
and on providing bank guarantee for the difference of price
agreed between the petitioner and the respondent and the price
on which Alumna is being sold in the international market at
the latest, and the security shall lie with the court and the party
that wins in arbitral proceedings shall take it after disposal of
arbitral proceedings basing on the direction given therein. The
petitioner is ordered accordingly."
An appeal filed by the respondent against the said order
of the trial court under section 37 of the 1996 Act before the
High Court of Judicature Andhra Pradesh at Hyderabad came to
be rejected. While doing so the High Court slightly modified
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the order of the trial court in the following terms :
"1) The Gerald Metals shall be permitted to
lift 33,300 MT +/- 5% of Alumina on
payment of agreed rates,
2) That in addition to agreed rates, the Gerald
Metals shall also give a bank guarantee of an
amount which is the difference between the
agreed rate and the rate of US $ 430 per MT
of Alumina in favour of NALCO. The bank
guarantee shall be furnished before the
Registrar (Judicial) of this Court to avoid
delay in the matter who shall transmit it to
NALCO.
3) The bank guarantee shall be encashable by
NALCO if they succeed in the arbitration.
4) No order as to costs."
In this appeal various grounds both legal and factual have
been raised by the parties to this appeal in their pleadings as
well as in the arguments addressed on behalf of them.
On facts of this case, we think it unnecessary to go into
these questions of fact and law even for the purpose of disposing
of this appeal which we intend doing it on the grounds of equity
and balance of convenience only. In that process, we think it
necessary that with a view to protect the interest of both the
parties to make some modifications in the impugned order. We
do so because of the fact that the claim of the respondent herein
is yet to be decided by the arbitrators. But in the meanwhile if the
respondent is not permitted to lift the goods in question it is
likely to be put to great hardship. At the same time, if appellant is
not allowed to collect the fair price of its goods it will be
deprived of the monetary value of the goods. The rights of the
parties to receive the goods and value payable will be ultimately
decided by the arbitrators. Therefore, we think it appropriate that
while the respondents should be permitted to take the goods, the
appellants should be paid as an interim measure the present value
of the goods. There seems to be some dispute with regard to the
present value of the goods. Since both the parties have produced
different valuation, we think it appropriate to fix the value of the
goods as fixed by the High Court at US $ 430 per MT. On that
basis, we, in modification of the orders of the courts below, direct
the appellant to permit the respondent to remove from their Silo
at Vishakapatanam balance of quantity of Alumina agreed to be
sold to the respondent on it receiving its value fixed by way of
this interim order at the rate of US $ 430 per MT. On receipt of
such value from the respondent, appellant will start loading the
goods not later than 7th March, 2004. In the meantime the parties
will exchange necessary documents and also complete all
procedural formalities for the purpose of loading and exporting
the goods within the date stipulated hereinabove.
However, the respondent apart from the interim value
fixed by us will also furnish a bank guarantee to the satisfaction
of the Registrar General of this Court for a sum equivalent to the
difference in value as claimed by the appellant and value now
fixed by us i.e. at the rate of US $ 31.80 per MT within a week
from today. [US $ 460.80 \026 US $ 430]
The appellant in turn, will give an undertaking signed by its
authorised officer to this Court undertaking to pay all sums which
may become payable by it under the award within 6 weeks from
the same becoming payable. This undertaking shall be filed with
the Registry of this Court within 4 weeks from today.
The above arrangement is interim in nature and is subject to
the award that may be made in the arbitration proceedings.
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We make it clear that we have not expressed any opinion
on the legal arguments raised in this appeal nor on the factual
issues except to the extent of the interim arrangement made
hereinabove.
With the above modifications this appeal is disposed of.