Monarch Gold Mining Company Ltd. vs Hindustan Copper Ltd.

I.P. Mukerji, J.

1.The Court: This is a section 11 application. It is contested. The present dispute between the parties was raised by the petitioner by their letter dated 28th December, 2009, asking the Chairman and Managing Director of the respondent to refer the dispute mentioned therein to arbitration.

There was a contract between the parties under which the petitioner was to operate the Surda mine and the Mosaboni Concentrator plant. Furthermore, they were to supply and deliver copper concentrate @ Rs. 1,53,470/- per ton of metal in concentrate [excluding royalty] to Moubhandar Works of Indian Copper Complex.

A dispute arose between the parties. It was whether this sum of Rs. 1,53,470/- per ton included taxes, duties, other levies and so on. The petitioner claimed that this sum did not represent those incidents and that they were to be paid separately by the respondent.

The matter went to arbitration. The learned Arbitrator was Hon''ble Mr. Justice M.R. Mallick, a retired Judge of this Court. There was only one issue before the Arbitrator, which was very wonderfully described in the award made and published by him on 24th July, 2009 as follows:

The only dispute which is required to be resolved by me as the sole Member of the Arbitral Tribunal is whether the Contract that was awarded to the claimant for their operations of the Respondent''s Surda mine and Mosabani Concentrate in terms of the price bid submitted by the claimant and accepted by the respondent is exclusive of taxes, duties etc. and any payment made by the claimant towards the taxes and duties are to be reimbursed by the respondent on actual basis or not.

After a very detailed discussion, the learned Arbitrator came to a specific finding that the price included base price + 49% per ton. According to the award the above price included all taxes, duties, levies and so on.

Now, let me come to the present dispute between the parties. In the letter dated 28th December, 2009 it is said that the respondent was paying to the petitioner Rs. 1,31,757/- instead of the agreed amount.

It was submitted before me at the time of hearing of the application by Mr. Bose, learned counsel for the respondent that such deduction was being made on the ground that the rate of certain duties had fallen. He argued that since the learned arbitrator had held that the contract price included taxes, duties etc., the respondent was entitled to make deduction in case of fall in duties. This was held by the award and there is no arbitral dispute, according to him.

The counter argument of Mr. S.N. Mitra, learned senior counsel for the petitioner is that the agreed sum was a fixed price per ton inclusive of all duties and could not vary with any change in the rate of duty or taxes or other levy.

I am unable to agree that this particular dispute as to the effect of a fall in duties on the agreed price was decided by the learned Arbitrator. He only decided that the price of Rs. 1,53,470/- per ton included all taxes and duties. He did not decide that if there was a fall in any duty or fall in any component of 49 % per ton, the respondent was obliged to deduct that amount from the price. I am clearly of the opinion that this issue was not before the learned Arbitrator and not decided by him.

Mr. Bachawat, learned counsel for the respondent leading Mr. Bose at the close of submissions submitted that the petitioner has not invoked the arbitral procedure properly. The arbitration clause provided for appointment of one arbitrator by each party and the third arbitrator to be appointed by consent of the two arbitrators. By their letter dated 28th December, 2009, the petitioner did not appoint any arbitrator.

I find in that letter that the petitioner had asked the respondent that the above dispute between the parties "may kindly be referred to arbitration" I read that phrase to mean that the petitioner was calling upon the respondent to appoint an arbitrator in terms of the arbitration clause. I am unable to accept the submission that the petitioner was required to first appoint the arbitrator. There is no such provision in the agreement or in the Arbitration and Conciliation Act, 1996.

Therefore, the request for appointment of arbitrator was proper. There is an arbitral dispute between the parties, as held above.

I also notice that the petitioner have not appointed their arbitrator, which they ought to have done by this time. Therefore, in the circumstances, I think this application should be referred to the Hon''ble delegate of the Hon''ble the Chief Justice for appointment of an arbitrator/arbitrators to adjudicate the disputes between the parties as mentioned in the letter of the petitioner dated 28th December, 2009.

I order accordingly.

Hence, let this file along with all papers be placed before the Hon''ble delegate of the Hon''ble the Chief Justice for naming an arbitrator/arbitrators. All parties concerned are to act on a signed photocopy of this order on the usual undertakings.