Gujarat High Court
Vitol S.A vs Asian Natural Resources (India) ... on 28 April, 2017
Author: Akil Kureshi
Bench: Akil Kureshi
O/IAAP/19/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
PETN. UNDER ARBITRATION ACT NO. 19 of 2017
With
CIVIL APPLICATION (OJ) NO. 160 of 2017
In
PETN. UNDER ARBITRATION ACT NO. 19 of 2017
With
CIVIL APPLICATION (OJ) NO. 161 of 2017
In
PETN. UNDER ARBITRATION ACT NO. 19 of 2017
With
CIVIL APPLICATION (OJ) NO. 162 of 2017
In
PETN. UNDER ARBITRATION ACT NO. 19 of 2017
With
CIVIL APPLICATION (OJ) NO. 163 of 2017
In
PETN. UNDER ARBITRATION ACT NO. 19 of 2017
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VITOL S.A.....Petitioner(s)
Versus
ASIAN NATURAL RESOURCES (INDIA) LIMITED & 3....Respondent(s)
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Appearance:
MS RUJUTA R OZA, ADVOCATE for the Petitioner(s) No. 1
HARDIK D MEHTA, ADVOCATE for the Respondent(s) No. 4
JWALIT B SONEJI, ADVOCATE for the Respondent(s) No. 2
MR NIRAV C THAKKAR, ADVOCATE for the Respondent(s) No. 1
RISHI O MALIK, ADVOCATE for the Respondent(s) No. 3
SHERLEY S DOSHI, ADVOCATE for the Respondent(s) No. 4
VISHAL R BHATT, ADVOCATE for the Respondent(s) No. 4
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
Date : 28/04/2017
COMMON ORAL ORDER
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1. On 10.03.2017, following order was passed.
"1. The petitioner is a decree holder. The petitioner had filed execution petition before the concerned Civil Court. Being a decree in connection with international arbitration, execution petition has been transferred to the High Court. The petitioner seeks sale of coal presently lying at Navlakhi Port which had arrived in four separate consignments in four separate cargo ships. Though the weighment indicated in the letter dated 03.11.2015 of the Gujarat Maritime Board to the United Shippers Ltd, Morbi is not and cannot be taken to be completely accurate, for ready reference, we may note the name of the vessels and the approximate cargo in the form of coal which has been offloaded:
Mv. Lorentzos 17376.290 Mtons Mv. Iolcos Confidence 40600.000 Mtons Mv. River Globe 05794.700 Mtons
2. As part realization of the decree, the petitioner seeks that the cargo may be sold and the amount be paid over to the petitioner. There are, however, multiple rival claimants including respondent No.3 herein.
3. Insofar as the coal offloaded from vessel Mv Lorentoz and Mv River Globe is concerned, one M/s. Sharp Corporation claims ownership thereof. Certain proceedings were filed before the Bombay High Court and I am informed, the present petitioner has now filed applications before this Court in connection with such claim. Before me, learned advocate Mr. Manoj Khatri appearing for the United Shippers Ltd stated that his client also has lien over the entire cargo. However, in view of the possible deterioration of the goods if allowed to remain at the port for indefinite period, without prejudice to the rights and contentions of such company he would agree to the coal being sold and the price fetched be deposited in the Court. This is precisely the Page 2 of 9 HC-NIC Page 2 of 9 Created On Fri May 05 23:59:27 IST 2017 O/IAAP/19/2017 ORDER suggestion made by the counsel for the petitioner and all other contesting parties except Mr. Manoj Popat who is representing M/s. Sharp Corporation submitted that his client should be interested in receiving the coal itself and not any sale proceeds thereof. Respondent No.3 has filed application dated 13.12.2016 Exh 83 in which also the request is made for prompt disposal of the coal.
4. As an interim measure, therefore, it would be appropriate in view of the consensus between the parties to sale in the open market the coal lying at Navlakhi Port offloaded from one vessel Mv Iolocs Confidence.
5. The coal offloaded from other two vessels namely Mv. Lorentoz and Mv. River Globe may be set apart in view of the disputed claim of M/s. Sharp Corporation.
6. The task of actual sale of the coal may be entrusted to the Registry of this Court, however, before that, it would be better to evaluate the coal. For such purpose, the petitioner as well as respondent No.3 herein, Bhatia Global Trading Ltd shall present on the next date of hearing, their independent valuations. The valuer's report may also indicate the broad parameters applied for arriving at the specific price as also what according to them is current price prevailing in international as well as domestic market of similar quality of coal. For such purpose, various representatives of both parties would have liberty to take out samples from the said stored coal consignments.
7. S.O. to 24.03.2017."
2. On 07.04.2017, further order was passed requiring the parties to supply following details.
"A. The bids of the buyers whom the parties may be able to muster in sealed covers.
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O/IAAP/19/2017 ORDER
B. The price declaration made by the importer at the time of import of the coal with additional details of the date of arrival and the total quantity of the coal imported.
C. The market value of the coal, if available, prevailing in the international market on the date of import.
D. Market value of similar quality of coal in the international market as on date.
E. If there is any material suggesting any reduction in the quantity or deterioration of the quality of the coal, the same may also be produced on record."
3. Shri Soparkar for the Vitol S.A. showed inability of the party to provide most of these details. However, Shri Mehul Shah for B.G.T.L. filed an affidavit dated 20.04.2017, in which, following details have been provided:
"(a) The bids of the prospective buyers in a sealed cover.
(b) The copy of Bill of entry of coal for showing the price declaration made by the importer at the time of import of coal with details of date of arrival and total quantity of the coal imported. Annexed hereto & marked as Annexure B is the copy of Bill of entry of coal.
(c) The market value of the coal in international market on the date of import is Rs.4173 per MT.
(d) The market value of similar quality of coal in international market as on date is 5683 per MT."Page 4 of 9
HC-NIC Page 4 of 9 Created On Fri May 05 23:59:27 IST 2017 O/IAAP/19/2017 ORDER Along with affidavit, certain documents have been produced, principally in order to show the declaration made by the importer of the coal at the time of its import.
4. On the basis of material on record, learned advocates for the parties earnestly requested that the coal in question may be disposed of as soon as possible. It was highlighted that due to passage of time, the condition of coal is deteriorating and further delay would only compound the problem. Learned advocate Shri Soparkar for the judgment creditor in particular, stressed that whatever the reasonable price of the coal, the same may be cleared through auction sale. Shri Mehul Shah for B.G.T.L. who also claims ownership of the coal too, joined in the request. Learned advocate Shri Manoj Khatri for United Shippers Limited, at whose premises the coal is stored submitted that in whatever manner possible, the coal should be removed from the premises since the same is occupying vast area, preventing the said company from renting it out to other agencies.
5. We are informed that IDBI also claims to be one Page 5 of 9 HC-NIC Page 5 of 9 Created On Fri May 05 23:59:27 IST 2017 O/IAAP/19/2017 ORDER of the creditors of Asian Natural Resources (India) Ltd. It would also be in the interest of IDBI to ensure that the coal is sold at the best possible price. In any case, at this stage, I do not propose to disburse the proceeds of the sale even if it eventually takes place. In the interest of all concerns therefore, it would be appropriate to order public auction of the coal in question. In the situation somewhat peculiar, I am forced to fix an upset price without a scientific assessment of the price of coal. The reasons for this could be seen from earlier orders noted above. It is also not possible to compare current market value of the coal for this stock since the quality has deteriorated. In any case, merely to postpone indefinitely the sale for want of scientifically derived upset price, would be detrimental to all concerned. Since two sides having competing interest are on record, I trust they would also be interested in ensuring that the maximum possible price is fetched.
6. As a baseline, I have the three bids placed before me by the said B.G.T.L. in sealed covers. I have opened these bids which would be resealed and Page 6 of 9 HC-NIC Page 6 of 9 Created On Fri May 05 23:59:27 IST 2017 O/IAAP/19/2017 ORDER kept on record. I have taken into account offer of the three bidders. I have also taken into account the declaration made by B.G.T.L. in the said affidavit dated 20.04.2017, in which, the coal price in the international market on the date of the import is shown to be Rs.4173 per MT and the market value of the similar quantity of coal in the international market as on date being Rs.5683 per MT. Even without any further scientific data, it can be even through common sense appreciated that due to passage of time, the quality of coal must have deteriorated. This is precisely what advocates from all sides are pointing out to me. In fact, it is stated that a part of the quantity may have been destroyed because of the fire.
7. Going by the factors noted above, let the upset price for the auction sale be fixed at Rs.3150 per MT.
8. The public auction be conducted under the supervision of an officer not below the rank of Deputy Registrar to be deputed by the Registrar General of the High Court. A public advertisement for such purpose may be issued, preferably by 10th May, 2017, inviting bidders to participate in the auction which Page 7 of 9 HC-NIC Page 7 of 9 Created On Fri May 05 23:59:27 IST 2017 O/IAAP/19/2017 ORDER may be conducted not earlier than four weeks from the date of publication of such notice. The public notice would indicate that the sale will be as is where is basis. Inspection of coal may be permitted to the prospective bidders on three consecutive dates which may be indicated in the advertisement itself. Earnest money would be 10% of the bid amount, which will be arrived at by assessing the quantity of the coal to be 40600 Mts and applying the upset price fixed above. Since there is uncertainty about actual quantity of coal that may be available for sale, the ultimate purchaser would pay only for the coal that is cleared at the rate that may have been accepted. In this context, since the weighment becomes crucial, weight of the coal being cleared would be done under the supervision of a Port Officer at Navlakhi Port to be deputed by GMB who will be reimbursed the reasonable charge for the same. The advertisement shall also indicate that the acceptance of the bid of the successful bidder shall be subject to confirmation by the Court.
9. The petitioner Vitol S.A. And B.G.T.L. shall deposit a sum of Rs.2 lakhs each by 05.05.2017 before Page 8 of 9 HC-NIC Page 8 of 9 Created On Fri May 05 23:59:27 IST 2017 O/IAAP/19/2017 ORDER the registry of this Court to be adjusted towards the cost of this auction process by. The concerned Registrar shall, in consultation with the advocates appearing for the parties, finalize the terms and conditions and place them before me on 05.05.2017.
10. S.O. to 05.05.2017.
(AKIL KURESHI, J.) ANKIT Page 9 of 9 HC-NIC Page 9 of 9 Created On Fri May 05 23:59:27 IST 2017