Delhi High Court
Arcelor Mittal Nippon Steel India ... vs Mideast Integrated Steels ... on 23 February, 2022
$~6 & 20
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 23.02.2022
+ ARB.P. 1256/2021
ARCELOR MITTAL NIPPON STEEL INDIA LIMITED
..... Petitioner
Through: Mr.Arun Kathpalia, Sr. Adv. with
Ms.Anannya Ghosh, Ms.Ragini
Gupta, Advs.
Versus
MIDEAST INTEGRATED STEELS LIMITED ..... Respondent
Through: Mr.Kawal Nain, Ms.Kavita Sharma &
Mr.Rohit Dadwal, Advs.
+ O.M.P.(I) (COMM.) 42/2022
ARCELOR MITTAL NIPPON STEEL INDIA LIMITED
..... Petitioner
Through: Mr.Ashim Sood, Ms.Anannya Ghosh
& Ms.Ragini Gupta, Advs.
Versus
MIDEAST INTEGRATED STEELS LIMITED
..... Respondent
Through: Mr.Kawal Nain, Ms.Kavita Sharma &
Mr.Rohit Dadwal, Advs.
CORAM:
HON'BLE MR. JUSTICE SURESH KUMAR KAIT
J U D G M E N T (oral)
1. The above captioned first petition (ARB.P.1256/2021), has been filed
under Section 11 of the Arbitration and Conciliation Act, 1996 seeking
appointment of an Arbitrator to adjudicate the disputes between the parties.
The second captioned (O.M.P. (I) (COMM.) 42/2022) has been filed by the
petitioner under Section 9 of the Arbitration and Conciliation Act, 1996
seeking directions to the respondent to deposit an amount of
Rs.130,00,00,000/- being the unadjusted advances under the Agreement read
with the Addendum. Further direction is sought to the respondent to
disclose details of bank accounts, all the moveable and immoveable assets
and receivables and restraining it from taking any coercive actions in any
manner disposing off, selling, transferring, creating third party right, title
interest and claim of any nature whatsoever in its immoveable and movable
assets till adjudication of disputes between the parties.
2. Since the parties in the above captioned petitions are same and issues
between the parties are similar in nature, therefore, with the consent of
learned counsel for the parties these petitions have been heard together and
are being disposed of by this common judgment.
3. Petitioner is a company incorporated under the provisions of the
Companies Act, 1956 and is an integrated flat carbon steel manufacturer.
Previously prior to January 2020, petitioner was known as Essar Steel India
Limited.
4. Learned counsel for the petitioner submits that in the year 2009,
petitioner had an urgent need for Iron Ore Fines having certain
specifications for operationalizing its beneficiation situated at Dabuna,
Odisha. In view of representations made by respondent , petitioner and
respondent entered into an Offtake Agreement on 02.09.2009 wherein
respondent supplied 15 million tons of Iron Ore Fines to the petitioner for a
sum of Rs.154 crores. Accordingly, petitioner paid advance payment and as
security for advance payment, respondent provided some undated cheques
aggregating to Rs.154 crores. Despite having taken advances, the
respondent failed to supply the contracted quantities, notices were issued to
it to comply with contractual obligations. Thereafter, respondent had
delivered some quantities to the extent of Rs.16 crores. In these
circumstances, the Addendum was executed between the parties for
extending tenure of the agreement to 31.03.2017 and setting out further
terms for damages and interest payable to the petitioner for the delay. Till
the term of the Addendum expired, respondent had only supplied 0.7 million
tons of Iron Ore Fines and the amount adjustable against the supplies was
only 24 crores. Thereafter, petitioner issued a notice on 22.05.2018 to
refund the unadjusted advances to the tune of Rs.130 crores, however, in
response thereto, respondent refused to refund the same and also claimed
that advance payment was to be adjusted against the supply of Iron Ore
Fines. As the respondent refused to refund the amount, petitioner presented
cheques of Rs.123 crores out of the security cheques which got dishonoured.
5. Learned counsel for the petitioner submitted that as the security
cheques got dishonoured, petitioner filed petition under Section 138 of the
Negotiable Instruments Act, 1881 and the same is pending adjudication.
6. Subsequently, on 13.11.2021, petitioner invoked arbitration by
issuing notice to the respondent under Article 21 of the Agreement and
Clause 6 of the Addendum and proposed the name of Hon'ble Mr. Justice
(Retd.) Abhay Manohar Sapre, as the sole arbitrator. However, in response
thereto dated 10.12.2021, respondent refused for appointment of arbitrator
proposed by the petitioner and instead, proposed the name of Mr. Justice
(Retd.) Arijit Pasayat as the sole arbitrator. Since petitioner and respondent
have failed to jointly appoint Sole Arbitrator, hence, the petitioner is before
this Court.
7. Learned counsel appearing on behalf of respondent has objected to the
averments made in the present petitions, however, has submitted that the
disputes are arbitrable and he has no objection if this Court appoints sole
arbitrator.
8. In view of the above, the above captioned first petition is allowed.
Accordingly, Mr. Justice (Retd.) K.G. Balakrishnan, former Chief
Justice of India (Mobile:9717277700) is appointed sole Arbitrator to
adjudicate the dispute between the parties.
9. The fee shall be decided by the learned Arbitrator after consultation
with the parties.
10. The learned Arbitrator shall ensure compliance of Section 12 of
Arbitration and Conciliation Act, 1996 before commencing the arbitration.
11. With regard to second petition filed under the provisions of Section 9
of the Arbitration and Conciliation Act, 1996, this Court finds that since the
subject matter of dispute has been referred to the arbitral tribunal, parties are
at liberty to claim any interim relief before the learned Arbitrator.
12. At this stage, learned counsel appearing on behalf of petitioner
submits that the second captioned petition be treated as the one filed under
Section 17 of the Act and it be also referred to the arbitral tribunal for
consideration under the provisions thereof.
13. The aforesaid submission of learned counsel for petitioner is not
disputed by the other side.
14. Accordingly, it is directed that the second captioned petition i.e.
O.M.P.(I) (COMM.) 42/2022 be treated as the one filed under Section 17 of
the Arbitration and Conciliation Act, 1996 on behalf of petitioner and it is
also referred to the Arbitral Tribunal for consideration as per law.
15. Registry is accordingly directed to send O.M.P.(I) (COMM.) 42/2022
to the learned Arbitrator forthwith. Respondent shall comply with Para-7 of
order dated 08.02.2022 in O.M.P.(I) (COMM.) 42/2022 within two weeks
with an advance copy to the other side, before the arbitral tribunal, who shall
consider the same in accordance with the law.
16. With aforesaid directions, the above captioned two petitions are
accordingly disposed of.
17. A copy of this order be sent to the learned Arbitrator for information.
(SURESH KUMAR KAIT)
JUDGE
FEBRUARY 23, 2022/ab
