Delong Steel Limited v. Lords Bluetech Co. Pvt. Ltd.

At a glance

Parties

Delong Steel Limited (appellant; claimant in the arbitration) v. Lords Bluetech Co. Pvt. Ltd. (respondent)

Case no.

APO No. 92 of 2018, GA No. 980 of 2018 in EC No. 70 of 2017

Court

High Court at Calcutta, Civil Appellate Jurisdiction (Original Side)

Forum and rules

Enforcement of a foreign award under Section 48 of the Arbitration and Conciliation Act, 1996 (New York Convention)

Treaty

New York Convention, Article V(1)(c)

Court

Justice Sanjib Banerjee and Justice Abhijit Gangopadhyay

Underlying award(s)

Foreign arbitral award dated 8 June 2015

Sector

Iron ore trade

Outcome

Appeal allowed. The first-instance refusal of enforcement was set aside and the appellant may enforce the award.

Amount

Claimed in the arbitration: US$ 156,198.39, or alternatively damages. The amount awarded is not stated. Costs of the appeal: Rs. 25,000 to the appellant.

The dispute

Lords Bluetech agreed to supply Delong Steel with iron ore fines with an iron (Fe) content above 56%, at US$ 111 per tonne. Payment was made by irrevocable letters of credit. At the discharge port of Tianjin, China, the cargo was found to have a lower Fe content (about 54%). Delong said the parties then agreed a reduced price of about US$ 108 per tonne in "Addendum 3", which the supplier never signed. Clause 21 of the contract required any amendment to be in writing and signed by the parties, so the arbitral tribunal disregarded Addendum 3 and assessed damages under the original contract. The single judge refused enforcement in India under Section 48(1)(c) of the Arbitration and Conciliation Act, 1996. He accepted the supplier's argument that the whole claim rested on Addendum 3, so the award decided a matter that had not been submitted to arbitration. Delong appealed.

Key holdings

1. The basis of the claim, delivery of goods below the 56% Fe specification in Clause 3 of the original contract, was set out in the statement of claim. Addendum 3 was used only to increase the amount claimed. The claim under the original agreement was therefore submitted to the arbitral tribunal. pp. 3–4
2. When a higher amount is claimed, the adjudicating authority may award a lesser amount. The tribunal could assess damages on the contract price once Addendum 3 was excluded. p. 4
3. Section 48(1)(c) bars enforcement only to the extent that an award deals with a difference outside the submission. Its proviso requires the court to separate the parts that can be enforced. Here there was no legal scope to refuse enforcement on the ground that the matter had not been submitted to arbitration. p. 4
4. The order of 7 February 2018 was set aside. The appellant may enforce the award of 8 June 2015, seek immediate orders in execution before the court of first instance, and recover costs assessed at Rs. 25,000. pp. 4–5

Procedural history

1. 2 March 2013The consignment arrives at Tianjin, China. The discharge-port certificate shows an Fe content below 56%.
2. 8 June 2015The foreign arbitral award is issued. Damages are assessed under the original contract, without Addendum 3.
3. 7 February 2018The single judge of the Calcutta High Court refuses enforcement under Section 48(1)(c) of the Arbitration and Conciliation Act, 1996 (EC No. 70 of 2017).
4. 14 May 2018The Division Bench allows the appeal, sets aside the order of 7 February 2018 and permits enforcement, with costs of Rs. 25,000.

Tribunal, counsel and experts

Decided by

• Sanjib Banerjee Judge, High Court at Calcutta
• Abhijit Gangopadhyay Judge, High Court at Calcutta

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Keywords

• enforcement of foreign award
• New York Convention
• Article V(1)(c)
• Section 48(1)(c)
• Arbitration and Conciliation Act 1996
• matters beyond scope of submission
• excess of mandate
• severability proviso
• iron ore fines
• Fe content
• quality dispute
• unsigned addendum
• written modification clause
• damages assessment
• Calcutta High Court
• India

Summary generated with AI from the published documents — refer to the award for the authoritative text.