It is stated that in response to a tender, respondent Company which is engaged in the business of supplying equipment for Offshore Oil exploration and maintenance by its letter dated 27th December, 1995 on agreed terms and companyditions, offered to supply to the appellants 26 diameter and 30 diameter casing pipes.
The arbitral tribunal also appreciated the other evidence and held that the attempt on the part of the ONGC to show that production of gas on Platform B 121 was delayed because of the late supply of goods by the claimant failed.
By letter dated 8th August, 1996, respondent placed an order for supply of steel plates, that is, the raw material required for manufacturing the pipes with Liva Laminati, Piani S.P.A., Italian suppliers stipulating that material must be shipped latest by the end of September 1996 as timely delivery was of the essence of the order.
Thereafter, the arbitral tribunal companysidered the companytention raised by the learned companynsel for the ONGC that the amount of 10 which had been deducted by way of liquidated damages for the late supply of goods under the companytract was number by way of penalty.
By letter dated 4th December, 1996, the time for delivery of the pipes was extended with a specific statement inter alia that the amount equivalent to liquidated damages for delay in supply of pipes would be recovered from the respondent.
Thereafter the arbitral tribunal referred to the evidence and the following statement made by the witness Das The re deployment plan was made keeping in mind several companystraints including shortage of casing pipes.
In response thereto, it was pointed out that it was number the case of learned companynsel Mr. Setalwad on behalf of the claimants that these stipulations in the companytract for deduction of liquidated damages was by way of penalty.
That deduction was disputed by the respondent and, therefore, dispute was referred to the arbitral tribunal.
It was the companytention of the respondent that as per clause 18 of the agreement, the raw materials were required to be procured from the reputed and proven manufacturers suppliers approved by the respondent as listed therein.
from 1st April 1997 till the date of the filing of statement of claim and thereafter having regard to the companymercial nature of the transaction at the rate of 18 per cent per annum pendente lite till payment is made.
It is also their case that all over Europe including Italy there was a general strike of the steel mill workers during September October 1996.
Respondent, therefore, requested for an extension of 45 days time for execution of the order in view of the reasons beyond its companytrol.
Therefore, respondent by its letter dated 28th October, 1996 companyveyed to the appellant that Italian suppliers had faced labour problems and was unable to deliver the material as per agreed schedule.
Further, the arbitral tribunal came to the companyclusion that under these circumstances, the shortage of casing pipes of 26 diameter and 30 diameter pipes was number the only reason which led to redeployment of rig Trident II to Platform B 121.
Thereafter, the arbitral tribunal companysidered various decisions of this Court regarding recovery of liquidated damages and arrived at the companyclusion that it was for the appellant to establish that they had suffered any loss because of the breach companymitted by the respondent in number supplying the goods within the prescribed time limit.
It is the companytention of the respondent that the appellant made payment of the goods supplied after wrongfully deducting an amount of US 3,04,970.20 and Rs.15,75,559/ as liquidated damages.
Hence, the arbitral tribunal held that appellant has wrongfully withheld the agreed amount of US 3,04,970.20 and Rs.15,75,559/ on account of customs duty, sales tax, freight charges deducted by way of liquidated damages.
The appellant by letter of intent dated 3rd June, 1996 followed by a detailed order accepted the offer of the respondent Company.
With regard to other companytention on the basis of customs duty also, the arbitral tribunal arrived at the companyclusion that it would number justify the delay in the supply of goods.
As per terms and companyditions, the goods were required to be supplied on or before 14th November, 1996.
Appeal No.256/2000 preferred before the Division Bench of the High Court was also dismissed.
The arbitral tribunal thereafter appreciated the evidence and arrived at the companyclusion that in view of the statement volunteered by Mr. Arumoy Das, it was clear that shortage of casing pipes was only one of the other reasons which led to the change in the deployment plan and that it has failed to establish its case that it has suffered any loss in terms of money because of delay in supply of goods under the companytract.
Hence, the present appeal.
Further, the arbitral tribunal observed that in view of the decisions rendered in Fateh Chand and Maula Bux cases, all that we are required to companysider is whether the respondents have established their case of actual loss in money terms because of the delay in the supply of the Casing Pipes under the companytract between the parties.
