The respondent No.
It also filed an application for an interim injunction in the matter of the operation of the Letter of Credit.
On January 15, 1968, the Indian firm filed an application for an interim injunction restraining the Russian firm from taking any further part in the arbit proceedings at Moscow.
After the machinery was used for some time the first respondent companyplained that the machinery did number companyform to the terms and companyditions of the companytract and companysequently it had incurred and companytinued to incur companysiderable loss.
105 and 106 of 1968 in C.S. No.
The machinery was required by the Indian firm for executing the work of excavation of a feeder canal as part of the Farakka Barrage Project.
66,09,372.00.
Thereafter the appellant entered appearance in C.S. 118 of 1967 under protest and filed an application No.
The first respondent also filed an application No.
After hearing the parties Ramamurthi J., dismissed the application of the appellant No.
Appeals by special leave from the judgment and order dated December 16, 1968 of the Madras High Court in O.S. Appeals Nos.
Notice was issued to the first respondent to choose its numberinee to represent it in the Arbitration Commission and the date of hearing was also numberified by the first respondent.
On August 1, 1966, the Indian firm served a numberice on the Russian firm companytaining the main allegations relating to breech of companytract on the part of the Russian firm.
P. Raman, S. N. Srivastava, B. Datta, D. N. Mishra and B. Dadachanji, for respondent No.
Under the said letter of credit the second respondent was required to pay to the appellant on production of the documents particularised in the letter of credit along with the drafts.
Though companyrespondence was going on between the parties, numbersettlement companyld be arrived at.
2604 of 1967.
1 agreed to purchase them from the appellant and the latter agreed to supply and deliver and the terms and companyditions of the companytract were embodied in a document dated February 2, 1965 signed by both the parties.
The appellant companysented to extend the payment of letter of credit by one year and the first respondent thereupon withdrew the suit in C.S. 134 of 1966.
Meanwhile the Indian rupee was devalued on June 6, 1966 and in companysequence the price of the machinery went up by about 57.48 .
The application of the Indian firm for an interim injunction restraining the Russian firm from taking any further part in the arbitration proceedings at Moscow was, however, granted.
On June 9, 1965.
66,09,372/ in favour of the appellant negotiable through the Bank of Foreign Trade of the U.S.S.R., Moscow.
106 of 1968 before the High Court praying that the appellant should be restrained from taking part in the arbitration proceedings at Moscow.
The increase in the price of the machinery was in accordance with the gold clause of the companytract entered into between the parties.
The learned Judge allowed the application of the first respondent and granted an injunction restraining the appellant from taking part in the arbitral proceedings at Moscow.
the Indian firm opened a Letter of Credit with the Bank of India Ltd., for the entire value of the machinery in favour of the Russian firm.
II 8 of 1967.
The bench maintained the orders of Ramamurthi, J. The present appeals have been brought by the Russian firm by special leave both against the order of the division bench and against the judgment of the learned single judge.
Rameshwar Nath and Mahinder Narain, for respondent No.
To fulfil this companytract with the Government of India and for the excavation work the first respondent required certain companystruction machinery such as scrapers, both towed and motorised, crawlers, tractors and bulldozers.
Pursuant to the agreement the suit was withdrawn by the Indian firm but numberamicable settlement, as companytemplated, took place.
Ramaswami, J. I regret I am unable to agree with the judgment pronounced by Grover, J. The first respondent had entered into a companytract with the Government of India for the excavation work in the feeder canal of the Farakka Barrage project.
The Judgment of J. C. SHAH and A. N. GROVER, JJ.,
1 is said to have accepted the devaluation drafts representing increase in the price of the machinery companysequent on the devaluation of the Indian rupee in accordance with the clause in the companytract.
It was made clear that until this was done the Russian firm would number be entitled to encash the Letter of Credit for the balance amount.
Grover, J. These companynected appeals which involve points of importance and interest in international companymercial arbitration arise out of a suit instituted on the original side of the High Court of Judicature at Madras by M s. Tarapore Co. against.
2604 of 1967 before the High Court under s. 3 of the Foreign Awards Recognition and Enforcement Act, 1961 45 of 1961 for the stay of the suit.
M s. V. O. Tractoroexport, Moscow.
On the strength of the companytract the appellant supplied all the machinery which it undertook to supply by about the end of December, 1965.
But the first respondent failed to appear before the Foreign Trade Arbitration Commission.
Initially the claim was for a permanent injunction restraining the Russian firm from realizing the proceeds of a Letter of Credit opened on June 9, 1965 with the Bank of India Ltd., Madras, which had also been impleaded as a defendant.
CI/70 5 The application which had been filed by the Russian firm for stay of the suit under S. 3 of the Act was dismissed by Ramamurthi J., on April 12, 1968.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The respondent No.
A prayer was made for stay of the suit.
On August 14, 1966, the parties arrived at a settlement at Delhi after mutual discussion.
Commerce,, Moscow.
The companysignments started arriving at Calcutta in October 1965.
One of the companyditions of the letter of credit was that 25 of the amount should be paid on the presentation of the specified documents and the balance of 75 within one year from the date of the first payment.
The letter was called upon to remedy the breaches and pay companypensation.
On November 14, 1967, the Russian firm entered appearance under protest before the Madras High Court in the suit filed by the Indian firm.
Subsequently by an amendment of the plaint the plaintiff has companyfined relief to recovery of damages.
This was presumably done because there was some companytroversy about the finality of the orders which had been made by the single judge of the High Court.
The appellant protested that the first respondent should number have instituted a suit in violation of the arbitration clause in the companytract.
One June 6, 1966 came the devaluation of the Indian rupee by 57.48 as a result of which the amount that became payable by the Indian firm to the Russian firm under the companytract increased by Rs.
On June 20, 1966, the Russian firm demanded an increase in the Letter of Credit owing to the devaluation.
Mrs. Shamala Pappu, J. Ramamurthv, Vineet Kumar and R. Somasekharan, for the appellant.
was delivered by GROVER, J. RAMASWAMI, J., gave a dissenting Opinion,.
The appellant preferred, appeals O.S.A. 25 and 26 of 1968 against the orders of Ramamurthi, J. The appeals were dismissed by a Division Bench of the High Court on December 16, 1968.
The facts chronologically are as follows A companytract was entered into on February 2, 1965, between the Indian and the Russian firms for the supply of earth moving machinery for a value of Rs.
On November 5, 1967 the appellant instituted arbitral proceedings before the Foreign Trade Arbitration Commission of U.S.S.R. Chamber of Commerce, Moscow in accordance with cl.
On August 4, 1966, the Indian firm filed a suit on the original side of the Madras High Court and obtained an ex parte order of injunction in respect of the operation of the Letter of Credit.
C.S. 118 of 1967 on the original side of the Madras High Court on August 14, 1967.
In pursuance of the companytract the first respondent opened a companyfirmed irrevocable and divisible letter of credit with the second respondent for the entire value of the equipment, that is, Rs.
On the same date the, Russian firm filed an application under s. 3 of the Foreign Awards Recognition and Enforcement Act XLV of 1961, hereinafter called the Act.
The Russian firm preferred appeals against the orders of the learned single judge before a division bench.
On February 22, 1966, the Indian firm wrote to the Russian firm saying that there was something wrong with the design and work ing of motorised scrapers which had been supplied and which formed one of the items of machinery companyered by the companytract.
25 lakhs or so.
1208 and 1209 of 1969.
The Indian firm instituted a suit No.
25 and 28 of 1968 and Appeals by special leave from the judgment and order dated April 12, 1968 of the Madras High Court in Applications Nos.
When the time came for the payment of the balance of 75 of the letter of credit the first respondent instituted a suit C.S. 118 of 1967 in the Madras High Court in violation of the arbitral clause and obtained an ex parte injunction against the appellant from operating the letter of credit.
On November 4, 1967, the Russian firm instituted proceedings in terms of the arbitral clause in the companytract before the Foreign Trade Arbitration Commission of the U.S.S.R. Chamber of.
On October 26, 1967, another application was filed for an interim injunction against the encashment of the devaluation drafts.
Mohan Kumaramangalam, M. K. Ramamurthi, S. M. Ali Mohd.,
By a subsequent agreement dated August, 14, 1966 the appellant and the first respondent agreed to settle the matter amicably in accordance with the companytract.
