Aluminium Co. Ltd. Vs. Gerald Metals Sa  Insc 137 (27 February 2004)
N Santosh Hegde & B P Singh
out of SLP(C) No.3202 of 2004) SANTOSH HEGDE,J.
learned counsel for the parties.
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.
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.
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.
trial court after hearing the parties however considered it appropriate to make
the following interim order:
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 the order of the trial court in the following
The Gerald Metals shall be permitted to lift 33,300 MT +/- 5% of Alumina on
payment of agreed rates,
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.
bank guarantee shall be encashable by NALCO if they succeed in the arbitration.
order as to costs."
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.
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
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 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.
above arrangement is interim in nature and is subject to the award that may be
made in the arbitration proceedings.
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.
the above modifications this appeal is disposed of.