Asean Lng Trading Co Ltd Now Known As ... vs Adani Energy Ltd. on 5 July, 2018

[Cites 25, Cited by 1]

Gujarat High Court

Asean Lng Trading Co Ltd Now Known As ... vs Adani Energy Ltd. on 5 July, 2018

Bench: R.M.Chhaya

          C/IAAP/55/2017                             ORDER



           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

         R/PETN. UNDER ARBITRATION ACT NO.  55 of 2017

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    ASEAN LNG TRADING CO LTD NOW KNOWN AS PETRONAS LNG LTD
                            Versus
                       ADANI ENERGY LTD.
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Appearance:
MR DEVEN PARIKH, SR. ADVOCATE assisted by MR. VIMAL 
PATEL, ADVOCATE, MS RUPA DAYA, ADVOCATE, MR HITESH PATEL, 
ADVOCATE AND MR. SUREN PATEL, ADDVOCATE for the 
PETITIONER(s) No. 1
MR MIHIR JOSHI, SR. ADVOCATE, assisted by MR SANDIP 
SINGHI, ADVOCATE AND MS. POONAM MATHUR, ADVOCATE for 
SINGHI & CO(2725) for the RESPONDENT(s) No. 1
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    CORAM: HONOURABLE MR.JUSTICE R.M.CHHAYA
 
                           Date : 05/07/2018
 
                              ORAL ORDER

1. The present petition is filed under the Arbitration Act for execution of the Award passed by arbitral tribunal. It is the say of the petitioner that opponent entered into a contract for supply of Liquid Natural Gas (hereinafter referred to as "LNG" for the sake for brevity), by way of Master Agreement dated 02.08.2006. It is further the say of the petitioner that based upon the concluded contract, the petitioner is liable to pay the amount as determined by the arbitral tribunal as per the award being Arbitration No.81013 dated 25.06.2009.

2. The record indicates that opponent herein preferred application under section 34 of the Page 1 of 101 C/IAAP/55/2017 ORDER Arbitration Act before the City Civil Court at Ahmedabad being Misc. Civil Application No.803/09. The petitioner herein preferred an application as provided under Order 7 Rule 11, which was dismissed by the City Civil Court, Ahmedabad vide order dated 03.03.2012. The petitioner challenged the same before this Court by way of filing Civil Revision Application No.118/12 which was allowed by this Court (Coram : M.R. Shah, J.). The opponent challenged the same before the Hon'ble Apex Court by way of filing Special Leave Petition (Civil) CC No.19011/13, which came to be dismissed by the Hon'ble Apex Court vide order dated 29.03.2013.

3. The original execution petition, which was numbered as 71 of 2014 was filed before the City Civil Court, Ahmedabad and by order dated 16.03.2017 passed by the learned Principal City Civil Judge, Ahmedabad, the execution petition was ordered to be transferred to the commercial division of this Court and on such transfer, this Court was pleased to issue notice to the opponent.

4. The petitioner has produced on record duly certified copy of the agreement as well as the original award in English, which is on record and therefore, for recording compliance of section 47 of the Arbitration Act, this Court passed following order on 06.03.2018 Page 2 of 101 C/IAAP/55/2017 ORDER "Heard Mr.Deven Parikh, learned Senior Advocate assisted by Mr. Vimal Patel for the petitioner and Mr. Mihir Joshi, learned Senior Advocate assisted by Ms. Poonam Mathur, learned advocate with Ms. Trisha Baxi, learned advocate for Singhi & Co.

On perusal of the original record, the true copy of the award is produced by the petitioner in consonance with the provisions of section 47. The original award is in English. Duly certified copy of the agreement is also on record. Hence, there is compliance of section 47 of the Act. S.O. to 23.03.2018."

5. Heard Mr. Deven Parikh, learned senior counsel assisted by Mr. Vimal Patel, Ms. Rupa Dayal, Mr. Hitesh Patel, and Mr. Suren Patel, learned advocates for the petitioner and Mr. Mihir Joshi, learned senior advocate assisted by Mr. Sandip Singhi and Ms. Poonam Mathur, learned advocates for Singhi and Company.

6. It may also be noted that the learned counsels appearing for the parties were extensively heard and written submissions have also been submitted by both the sides, which are also taken on record and the same is also made basis of this judgment and order.

7. Mr. Deven Parikh, learned counsel appearing for the petitioner submitted that petitioner has satisfied condition as envisaged under section 47 of the Arbitration and Conciliation Act, 1996 Page 3 of 101 C/IAAP/55/2017 ORDER (hereinafter referred to as "the Act") and considering the limited jurisdiction of this Court under section 48 of the Act, this Court may pass appropriate orders and declare that the award is deemed to be decree of this Court.

8. Mr. Mihir Joshi, learned counsel appearing for the opponent has opposed the application. Mr. Joshi has taken this Court through the factual matrix which is initiated by Master Agreement dated 02.08.2006 and the relevant important documentary evidence, which was produced before the learned arbitral tribunal. Mr. Joshi contended that the findings arrived at by the Tribunal are irrational, unreasonable and even though there is no concluded contract between the parties, the Tribunal has wrongly assumed that there is a concluded contract and has erroneously held that the opponent is liable for take or pay obligation as per the agreement. Mr. Joshi also further contended that the conclusions arrived at by the arbitral tribunal are such that it would shock the conscience of this Court and are against the fundamental policy of Indian law. Mr. Joshi also contended that the jurisdiction of this Court under section 48 is limited and the merits are not to be touched, however, the conclusions arrived at by the arbitral tribunal are so irrational and unreasonable and the same defies logic and therefore, the same can be looked into by this Page 4 of 101 C/IAAP/55/2017 ORDER Court even in its limited jurisdiction under section 48 of the Act and the same would not amount to touching the merits of the matter.

9. Mr. Joshi, learned counsel for the opponent contended that although the parties have not agreed to any concluded contract, only by virtue of confirmation notice signed by the parties, the Tribunal has erroneously come to the conclusion that the opponent had agreed to buy and pay for cargo worth USD 110,000,000 approximately even without knowing the price or even without determination of unloading port being finalised and the Tribunal by treating such issues as merely operational issues, has passed the impugned award, which defies logic and the same is wholly unreasonable and perverse in facts of the case as well as as per the terms of the master agreement dated 02.08.2006. Mr. Joshi therefore contended that the Tribunal has misread the contract and has arrived at perverse finding.

10. Mr. Joshi contended that the Tribunal having come to the conclusion that the price of USD 8.50 for the purchase of the said cargo would cause loss to the opponent, has come to the conclusion that the fixed price was not offered before the Henry Hub determination date, by default Henry Hub price would become the agreed price. It was further contended on behalf of Page 5 of 101 C/IAAP/55/2017 ORDER the opponent that the Tribunal has at one place held that acceptance of price can be found from correspondence and at another, it is concluded that price fixed is default price as the opponent did not offer fixed price before the HH determination date. It was contended that such finding is perverse and unreasonable and when the price was not agreed in writing between the parties, it cannot be said that there was a concluded contract.

11. Similarly, it was contended by Mr. Joshi that the finding arrived at by the Tribunal that the receiving terminal is an irrelevant factor for the foreign supplies and it was for the opponent to nominate the terminal is irrational and such finding defies logic. Mr. Joshi further submitted that it was made clear much before the alleged delivery date that the terminals at Dahej and Hazira are unavailable at the relevant time and it is highly inconceivable that the opponent would purchase such huge cargo without determination of the receiving terminal and its availability. Mr. Joshi contended that even as per the Master Agreement, receiving terminal was an essential term, which in fact had to be agreed in writing before the contract could have been said to be concluded. Mr. Joshi therefore contended that the arbitral tribunal has come to an absolute unreasonable finding considering such important factor as a post contract Page 6 of 101 C/IAAP/55/2017 ORDER obligation of the opponent.

12. It was further contended by Mr. Joshi that similarly the conclusion arrived at by the arbitral tribunal to the effect that the opponent is liable to take or pay obligation and there is no requirement for offer of delivery by the supplier as the opponent had not nominated receiving terminal. Mr. Joshi contended that the conclusion arrived at by the arbitral tribunal as regards take or pay obligation of the opponent is wholly irrational and perverse. Mr. Joshi contended that there is no concluded contract. Relying upon the relevant documents, it was contended that the correspondence on record which was sent by opponent to the petitioner before loading of April cargo clearly indicates that receiving terminal had not been finalised between the parties. It was further contended that despite such factual aspect, the petitioner as supplier unusually loaded the cargo though never offered delivery as contemplated in the Master Agreement and furthermore, in absence of available cargo for May and June delivery, the arbitral tribunal has come to the conclusion that the opponent refused to accept delivery and therefore is liable for take or pay obligation. Mr. Joshi contended that as such, the facts reveal that the cargoes were immediately sold by the petitioner to third party, still however, attempt is made by the Page 7 of 101 C/IAAP/55/2017 ORDER petitioner only to thrust upon the opponent for raising claim for such cargoes.

13. Mr. Joshi at this stage contended that though the jurisdiction of this Court under section 48 is very limited, in the instant case, in absence of any concluded contract, no price having been agreed between the parties, even the receiving terminal not being determined or agreed by the parties, the findings arrived at by the arbitral tribunal are illogical, irrational, perverse and are such which would shock conscience of this Court.

14. Relying upon the decisions of the Apex Court reported in (2014) 2 SCC 433, (2015) 3 SCC 49 and judgment of this Court in IAAP No.2 and 10 of 2017 dated 08.08.2017, Mr. Joshi contended that this Court has jurisdiction to look into it as the conclusions arrived at by the learned arbitral tribunal are totally perverse, defies logic and shocks conscience of this Court and are against the fundamental policy of Indian law and it was therefore contended that the application deserves to be dismissed. Mr. Joshi further reiterated that even without touching the merits of the arbitral award, the findings arrived at by the arbitral tribunal are such that the same defies logic and are irrational, unreasonable and therefore can be looked into by this Court.

Page 8 of 101 C/IAAP/55/2017 ORDER

15. Referring to the arbitral award, Mr. Joshi contended that the conclusion arrived at by the Tribunal to the effect that the confirmation notice dated 12.03.2007 constituted a binding legal commitment for sale by petitioner and purchase by the opponent of 4 LNG cargoes is completely irrational, unreasonable and defies logic as the essential terms of contract as per Master Agreement dated 02.08.2006 were not agreed upon by the parties through the Confirmation Notice, but in fact were agreed to be mentioned in the delivery notice to be signed by both the parties. Mr. Joshi contended that only on such delivery notice being signed, the same would constitute a concluded agreement. It was contended by Mr. Joshi that thus such finding arrived at by the Tribunal is unreasonable, irrational and defies logic.

16. Mr. Joshi contended that the Tribunal has misread the oral evidence of Mr. Sharma and Mr. Singh, the witnesses of the opponents and such finding is contrary to the principles of section 91 of the Indian Evidence Act. It was contended that the Tribunal has irrationally come to the conclusion that the deposition is untruthful. Further, relying upon the judgment of the Apex Court in the case of Delta International Ltd. Vs. Shyam Sundar Ganeriwalla and Ors. reported in (1999) 4 SCC 545 and Bank Of India & Anr Vs. Page 9 of 101 C/IAAP/55/2017 ORDER K. Mohandas & Ors. reported in (2009) 5 SCC 313, it was contended that such finding of the Tribunal is perverse. It was further averred that the confirmation notice clearly does not record agreement of all the necessary and essential terms and the same is contrary to the evidence on record. Mr. Joshi further relying upon the confirmation notice as well as email dated 15.03.2007 contended that it shows that it was conditional and therefore, the conclusion arrived at by the Tribunal is unreasonable and illogical and the findings are contrary to the terms of the confirmation notice and hence, perverse.

17. It was also contended by Mr. Joshi, learned counsel appearing for the opponent that even the conclusion arrived at by the Tribunal to the effect that the delivery notice contemplated signatures is not of much consequence, but are merely of operational in nature is irrational, unreasonable and contrary to the terms of the contract and perverse. Mr. Joshi contended that the aspects like receiving terminal, letter of credit amount, price, were to be confirmed in the delivery notice. It was contended that availability of receiving terminal was essential and vital for delivery of the cargo. Mr. Joshi further contended that the Master Agreement contemplates that fixed price was to be offered to the opponent and the price was to be Page 10 of 101 C/IAAP/55/2017 ORDER finalised at the buyer option and therefore, the finding arrived at by the arbitral tribunal that such aspects were operational in nature is totally perverse and illogical. It was contended that even the draft notice which is annexed with the confirmation notice does indicate that such important aspects were to be agreed between the parties by putting their signatures. Mr. Joshi contended that even the conclusion arrived at by the learned arbitral tribunal that the parties could not have left to be agreed on a date only 14 days before the relevant cargo was due to be loaded was completely irrational and illogical as the confirmation notice was signed on 12.03.2007 and the delivery notice was sent on 16.03.2017.

18. Further reiterating the findings arrived at by the learned arbitral tribunal on the price aspect, it was contended by Mr. Joshi that the conclusion arrived at by the arbitral tribunal that the price has been agreed between the parties at Henry Hub for the relevant month + USD 1.85 is without any basis. It was contended by Mr. Joshi that the same defies logic and is completely impossible commercially. Mr. Joshi contended that the price was not finalised between the parties and the contract sale price was required to be mentioned in the delivery notice dated 16.03.2017, which was issued by the petitioner. Similarly, the aspect of SBLC was Page 11 of 101 C/IAAP/55/2017 ORDER to be provided before 10 days before loading, i.e., on 21.03.2007. Even such aspect was not mentioned. Relying upon clause 8 of the confirmation notice, it was contended by Mr. Joshi that even the finding arrived at by the Tribunal that the onus of seeking fixed price was upon the opponent is contrary to the terms of confirmation notice and hence, perverse. Mr. Joshi further contended that the finding arrived at by the Tribunal that if option was not exercised before the date of fixing of Henry Hub price, it would be fixed on Henry Hub determination date for the relevant month is reading a nonexisting term in the agreement. It was contended that there is no such term in the Master Agreement, confirmation notice or delivery notice and on the contrary, the confirmation notice specifically contemplates offer of fixed price even after the Henry Hub determination date, but before loading date and therefore, such finding arrived at by the Tribunal is contrary to the documentary evidence.

19. It was further contended that thus the finding arrived at by the arbitral tribunal that the fixed price could not be offered after the Henry Hub date, i.e., 28th March since the petitioner would stand committed to Suez by then is absolutely without any basis and such conclusion is totally irrational and unreasonable. It was Page 12 of 101 C/IAAP/55/2017 ORDER contended that the confirmation notice was signed on 12.03.2007 with the option of fixed price and hence, such finding is completely perverse and it was reiterated that the fixed price was to be offered either before loading or before the determination date of Henry Hub price, i.e., 28th March.

20. Mr. Joshi further contended that is inconceivable to agree for a higher price and the confirmation notice nowhere mentions that Henry Hub is the default price and thus such finding arrived at by the arbitral tribunal is impossible to understand and is totally irrational and illogical. Mr. Joshi contended that the arbitral tribunal has construed such factor as post contract obligation of the opponent which was breached, which is absolutely against the evidence and is unreasonable. Relying upon the judgment of the Apex Court in the case of Rickmers Verwaltung Vs. Indian Oil Corporation reported in (1999) 1 SCC 1, Hofflinghouse & Co. Ltd. vs. CTrade S.A. reported in 1986 (2) LLR 132 and Zarati S.S. Company Ltd. v. Frames Tours Ltd. reported in 1955 (2) LLR 278, it was contended that the same cannot be considered as acceptance of price issue and in fact the opponent was waiting for offer of fixed price and hence, the Tribunal has wrongly and without any basis accepted the same. It was therefore, contended by Mr. Joshi that Page 13 of 101 C/IAAP/55/2017 ORDER thus, in absence of any concluded contract, in absence of any conclusion of price, in absence of receiving terminal having been determined and in absence of any security provided by way of letter of credit, the conclusion arrived at by the Tribunal defies logic. It was contended that the Tribunal has thus, misread the agreement and the findings are perverse and the same do not borne out from the correspondences and evidence on record.

21. Referring to paras 25, 26, 29, 30, 37, 42 and 44 of the award, which deals with the aspect of receiving terminal, it was contended by Mr. Joshi that the entire conclusion defies logic. It was further contended that it is the case of the petitioner themselves that the opponent did not nominate receiving terminal. The record shows that both the terminals, i.e., Dahej and Hajira were not available at the relevant time and therefore, it is inconceivable that the opponent would agree to buy the cargo without a receiving terminal at all.

22. Mr. Joshi further contended that in absence of nomination of receiving terminal, there was no concluded contract and it was pointed out that even as per the Master Agreement, receiving terminal was an essential term. Mr. Joshi contended that the finding arrived at by the learned arbitral tribunal is nothing but putting Page 14 of 101 C/IAAP/55/2017 ORDER the cart before the horse since in absence of any concluded contract, there could not be a delivery date and the proposed delivery date cannot be there in absence of receiving terminal. Referring to the crossexamination of the witness of the opponent Mr. Sharma, Mr. Joshi contended that on 05.03.2007, none of the cargoes covered under the confirmation notice were in discussion. Referring to the evidence on record, it was also contended by Mr. Joshi that the offer of Petronet LNG Ltd was to be confirmed by 15.12.2006, however, by that time, the petitioner had not confirmed any loading dates. It was further contended that important aspect which was decided in the meeting dated 15/16.02.2007 have been completely ignored by the learned arbitral tribunal. It was also contended that it is on record that by a communication dated 22.02.2007, Hazira LNG Pvt. Ltd. informed that no slots were available and therefore, the opponent could not have nominated Hazira as 'receiving terminal'. However, even such evidence is totally ignored by the arbitral tribunal. It was therefore contended that even though it is the case of the petitioner that Hazira was nominated as receiving terminal as on 05.03.2007 and 12.03.2007, the same does not find place in the delivery note and the same is differed to be mentioned in the delivery note. Referring to the email sent by Ms. Sonya of the petitioner dated 15.03.2007, it was contended by Page 15 of 101 C/IAAP/55/2017 ORDER Mr. Joshi that if Hazira was confirmed on 12.03.2007 as receiving terminal, there was no reason for the officer of the petitioner to ask for confirmation of Dahej as receiving terminal. Mr. Joshi further contended that draft Stand By Letter of Credit (SBLC) is of no consequences. It is further contended by Mr. Joshi that such draft SBLC is neither signed nor confirmed by the opponent. Referring to the letter dated 22.02.2007, it was contended by Mr. Joshi that even such evidence whereby the said company refused to provide slot at Hazira is also ignored. On the aforesaid contention, it was therefore contended that an important aspect of receiving terminal has been misread by the learned arbitral tribunal and therefore, the finding arrived at by the learned arbitral tribunal are perverse, irrational and without any basis.

23. It was contended on behalf of the opponent that the conclusion arrived at by the arbitral tribunal as regards take or pay clause and/or damages is totally baseless. Mr. Joshi, relying upon the relevant evidence on record, contended that April cargo was loaded on 01.04.2007 for delivery though the opponent intimated on 27.03.2007 that the opponent would not be able to accept the April and May cargoes as receiving terminal was not available. Still however, the cargo was sought to be thrust upon the opponent Page 16 of 101 C/IAAP/55/2017 ORDER even though the petitioner was informed about nonavailability of slots at the receiving terminal and not giving any SBLC or any other security. Mr. Joshi on the basis of the record contended that in fact the said cargo was sold on 06.04.2007 to another party named B.G. LNG Trading, LLC. Mr. Joshi submitted that in fact, the May cargo was sold on 30.04.2007 even before the date of loading and therefore, there was no question of failure to accept the cargo and TOP clause could not have been evoked. Mr. Joshi further contended that June cargo was never loaded as it was canceled and even in such cases the TOP clause cannot be evoked. Mr. Joshi further contended that the Tribunal has also without any basis awarded damages for August cargo inspite of the fact that the contract was terminated on 24.05.2007. It was also contended that in fact all the four cargoes were independent contracts and therefore, could not have been terminated as there was no breach at that time. Mr. Joshi contended that thus, in absence of any offer of delivery, the TOP would not be triggered. Mr. Joshi contended that Master Agreement provides for terms of delivery. It was contended that in addition to that, facts reveal that without receiving terminal, April Cargo was loaded and TOP invoice was sent even before delivery and the petitioner promptly found a buyer and sold the cargo to such a buyer. It was contended that such important Page 17 of 101 C/IAAP/55/2017 ORDER aspect have been misread by the learned arbitral tribunal and such a huge TOP obligation cannot be justified and the same is contrary to the public policy, defies logic, irrational and against Wednesbury principle. It was contended that entire attempt is to thrust cargo without any supply and the petitioner already had a buyer and therefore, the findings arrived at by the Tribunal are perverse and defies logic. On the aforesaid grounds, it was therefore contended that even without touching the merits of the award, the impugned award is irrational, perverse and contrary to the binding law of India and against the public policy. The arbitral tribunal, in the aforementioned circumstances, even though there is no concluded contract between the petitioner and the opponent, has passed the award with huge liability of take or pay, which has not arisen in the instant case and in facts of this case therefore, even within the parameters of section 48 of the Act, following the ratio laid down by the Supreme Court in various cases, and more particularly in the judgment of Lal Mahal (supra), the application deserves to be dismissed.

24. Mr. Deven Parikh, learned counsel for the petitioner contended that the present proceeding is to be viewed as per 2015 Amendment in the Act and the difference between the proceedings under Page 18 of 101 C/IAAP/55/2017 ORDER Sections 34 and 48 of the Act is to be kept in mind. It was contended that the kind of inquiry and arguments which are made by the opponent are not permitted as per the provisions of the Act and as per the decided cases under the new Act and even if it can be gone into, it clearly violates the provision of not going into the merits of the matter. It was further contended that the opponent has based its arguments on perversity, unreasonableness and violation of fundamental policy of Indian law. However, none of these constitute independent ground of challenge to an award and none of the grounds raised by the opponent fall within the scope of public policy. Relying upon the judgment of the Hon'ble Apex Court in the case of Renusagar Power Co. Ltd. Vs. General Electric Co., reported in 1994 Supp. (1) SCC 644 and Shri Lal Mahal Ltd. Vs. ProgettoGrano Spa, reported in (2014) 2 SCC 433 and the judgment of this Court in the case of OCI Corporation Vs. Kandla Export Corporation, rendered in Petition no. 2 of 2017, it was contended by Mr. Parikh that the distinction between narrower and broader concept of public policy is finally settled and unlike an inquiry under Section 34 of the Act, the concept of public policy must receive a narrower interpretation in context of challenge to an international award under Section 48 of the Act. On the aforesaid basis, it was therefore contended by Mr. Parikh that the grounds of Page 19 of 101 C/IAAP/55/2017 ORDER perversity, unreasonableness and violation of fundamental policy of Indian law, have all to receive a narrower construction under Section 48 of the Act. It was also contended that it is not open for the opponent to reappreciate the merits at all under the guise of aforesaid 3 elements. It was further contended that the international award cannot be objected to on the ground that it violates or it is against some specific Indian law. It was contended that if such contention is upheld, the same would amount to absurdity and in such cases, where the Indian and foreign law are different, the award would not be enforceable. Relying upon the judgment of the Apex Court in the case of Renusagar (supra), it was specifically contended by Mr. Parikh that as observed by the Hon'ble Apex Court, more particularly, in Paragraph 43 of the said judgment, the element of violation of Indian law has been excluded from its scope. It was contended that the expression "public policy"

covers the field not covered by words "and the law of India" which follow the said expression and contravention of law alone will not attract the bar of public policy and something more than contravention of law is required and applying the said criteria, it must be held that the enforcement of a foreign award would be refused on the ground that it is contrary to public policy if such enforcement would be contrary to fundamental policy of Indian law, the interest Page 20 of 101 C/IAAP/55/2017 ORDER of India or justice morality. On the aforesaid contention, it was further averred that it is the enforcement of an award that must lead to violation of public policy. It was contended that case on hand is a simple case of contract and liquidated damages and enforcement of such commercial award cannot violate Indian public policy. It was contended that only if the law of India lays down a fundamental public policy like foreign exchange, etc. that the enforcement of the award contrary to such a law can be refused and in the present case, the award merely seeks to enforce a contract and impose liquidated damages. It was contended that the argument of perversity, unreasonableness, irrationality opposed to contract shocks conscience of the Court are merely means to reargue the case on merits. It was contended that in other words, taking arguments of the opponent, at the best, it is erroneous award on merits. There is no ex facie irrationality, illegality, etc. worth its name. It was further contended that it is an accepted fact that the arbitrators have decided as per law of England and Wales, but in grab of or under the cover of concept of violative of fundamental policy of Indian law, the opponent has reargued the entire evidence as if they were arguing on merits on Indian law.

25. Contending on construction of contract, it was contended by Mr. Parikh that the construction of Page 21 of 101 C/IAAP/55/2017 ORDER contract is purely within the jurisdiction of arbitrators and the aspect whether or not a contract exists is within their domain and this Court ought not to interfere with the findings of the arbitrators holding that a contract exists. Relying upon the judgment of the Apex Court in the case of Food Corporation of India Vs. Joginderpal Mohinderpal, reported in (1989) 2 SCC 347 as well as the judgment in the case of Swan Gold Mining Ltd. Vs. Hindustan Copper Ltd., reported in (2015) 5 SCC 739, it was contended by Mr. Parikh that even if the construction is erroneous, Court cannot interfere and the arbitrators appointed by the parties is the final Judge of the facts. It was further contended that the findings of fact recorded by him cannot be interfered with on the ground that the terms of contract were not correctly interpreted by the arbitrators and interpretation of contract is a matter of arbitrator who is the Judge chosen by the parties to determine and decide the dispute. It was contended on behalf of the petitioner that the Court is precluded from reappreciating the evidence and to arrive at a different conclusion by holding that the arbitral award is against the public policy. Even further relying upon the judgment of the Hon'ble Apex Court in the case of National Highway Authority of India Vs. ITD Cementation Ltd., reported in (2015) 14 SCC 21 and in the case of Sutlej Construction Ltd. Vs. Page 22 of 101 C/IAAP/55/2017 ORDER Union Territory of Chandigarh, reported in (2018) 1 SCC 718, it was contended that even on the ground of public policy, it would mean that the award should shock the conscience of the Court and would not include what the Court thinks is just on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be justice. It was reiterated by Mr. Parikh that even while examining the aspect of perversity, unreasonableness, etc., the primary finding is that there is a concluded contract and it was contended that the arbitrators, on the basis of the evidence, case law and commercial expediency, interpreted the price clause and found it to be providing of fixed price mechanism. The Tribunal concluded that the aspects like receiving terminal were of operational importance and were so rendered by the dealings of the parties by relegating them to delivery note. The requirement of Standby Letter of Credit was also construed to be one of the firm commitment and thus, on basis of the evidence and admission on part of the petitioner, the arbitrators have come to the conclusion that there is a concluded contract. It was contended that the award is based upon various evidence and case law after detailed crossexamination by the counsel and all the 3 arbitrators themselves and therefore, as such an award even otherwise cannot be construed as Page 23 of 101 C/IAAP/55/2017 ORDER perverse by any stretch of imagination and relying upon the judgments of Renusagar (supra) Swan Gold Mining Ltd. (supra) OCI Corporation (supra), Sutlej Construction Ltd. (supra) as well as the judgment of the Hon'ble Apex Court in the case of Associate Builders Vs. DDA, reported in (2015) 3 SCC 49, it was contended that under the guise of arguments of perversity, unreasonableness, etc., the opponent cannot be permitted to reargue the matter on merits. Further relying upon the judgment of the Associate Builders (supra) and more particularly, the observations made by the Hon'ble Apex Court in Paragraphs 31 to 34, 43 to 45 and 83 of the aforesaid judgment, it was contended by Mr. Parikh that the award in question is based on evidence and once it is found that the arbitrator's approach is not arbitrary or capricious, then, he is the last word on facts. It was contended that even considering the public policy list, indisputably, it should be so unfair and unreasonable as to shock the conscience of the Court. Mr. Parikh contended that the observations made by the Hon'ble Supreme Court are in context with an inquiry under Section 34 of the Act, whereas, in the instant case, the inquiry is to be made under Section 48 of the Act which is still further restricted and therefore, this Court, while considering challenge to the arbitral award, does not sit in Page 24 of 101 C/IAAP/55/2017 ORDER appeal over the findings and decisions of the arbitrators. Relying upon the said judgment, it was therefore contended by Mr. Parikh that such decision has to be accepted as final and binding.

26. Mr. Parikh also took this Court to the award and findings arrived at by the learned arbitrators and also the plethora of evidence, oral evidence and case law which are relied upon by the learned arbitrators in detail.

27. Mr. Parikh contended that the learned arbitrators had considered the issue which was raised as to whether there is concluded contract or not and has also considered the question of liquidated and unliquidated damages. It was further contended that while dealing with the aspect of concluded contract, the arbitrators have taken into account the evidence on record both oral and documentary and have arrived at specific finding of each and every issue and hence, such award cannot be termed as perverse, arbitrary or unreasonable as per the test laid down by the Hon'ble Apex Court. It was contended that the evidence, correspondence and cross examination which is considered by the learned arbitrators is more than sufficient evidence to show a concluded contract and breach thereof by the opponent rendering them liable to liquidated damages and/or unliquidated damages. It was Page 25 of 101 C/IAAP/55/2017 ORDER further contended that on the basis of such and various other documents and crossexamination as well as case law and commercial expediency, the Arbitral Tribunal has come to the conclusion that there is a concluded contract between the parties and it cannot be believed that throughout such active and voluminous correspondence, the opponent would never raise an issue of there being no contract except upon being faced with take or pay obligation. Mr. Parikh also contended that the learned arbitrators have rightly considered the price aspect and the award specifically finds a fully negotiated and confirmed price mechanism and the learned arbitrators have rightly come to the conclusion that the default price is Henry Hub + 1.85 US Dollars. It was contended that the second part of pricing formula was interpreted to apply if hedging was possible and such aspect was part of communication between the parties and well understood by both the parties. It was contended that the second part of pricing mechanism being based on hedging was well understood much before the first cargo was even loaded. Relying upon and referring to the evidence on record, it was contended that the finding as regards the price arrived at by the learned arbitrators is the correct interpretation of the evidence on record. It was also contended that considering the detailed crossexamination of the witness of the opponent Page 26 of 101 C/IAAP/55/2017 ORDER by all the arbitrators, the learned arbitrators found that the evidence of the witness of the opponent was not convincing and that the hedging had no connection with the second part of pricing formula. It was contended that the petitioner's knew its purchase price and its margin was assured by providing detailed price of Henry Hub + 1.85 US Dollars formula. It was contended that there was no reason for the petitioner to offer a lower price to reduce their margin and the only manner in which their margin can be kept constant if a proper hedge was agreed by the opponent. It was therefore contended that the only commercial sense was that such a clause would be based on hedging. Mr. Parikh contended that the said aspect was well supported by the correspondence and meetings between the parties even before the first consignment was loaded and that the opponent never objected to this understanding at that stage. It was contended that the learned arbitrators have relied upon the case laws, commercial understandings, crossexamination, documents and evidence as well as the conduct of the parties to interpret the second part of the price agreement, and the detailed cross was complete answer. It was further contended that by no stretch of imagination, such finding can be considered as perverse and unreasonable. It was contended that on the contrary, it is very well considered erudite interpretation placed by Page 27 of 101 C/IAAP/55/2017 ORDER 3 learned arbitrators to the price clause and the same is based on the evidence on record.

28. Further, relying upon the correspondence between the parties, it was contended by Mr. Parikh that the opponent was always confident of getting slots at the receiving terminal and was always confident that they could always manage the slots. Relying upon the evidence, it was contended that the slots were available or that the opponent was confident of managing the slots and the same could never have been the reason to hold them back from concluding a final agreement. It was contended that as the evidence reveal, the opponent already forwarded the cargo to be purchased from the petitioner irrespective of the slots and it was contended that thus, the opponent undertook contractual commitment without clarity on slots and that the opponent was fully confident of slots and made forward sale also. On the basis of the aforesaid, it was contended that the opponent was confident about the slot for purchase as well as resale. It was contended that only after receiving take or pay invoices for the first time on 19.4.2007, the opponent stated that the agreement is not concluded because of no slots. It was contended that after discussions and negotiations and on legal advise, the contract concluded with signing of confirmation note and the terminal to be decided and intimated at the level of Page 28 of 101 C/IAAP/55/2017 ORDER delivery note. It was further contended that there is no law which requires that a contract cannot be concluded without a place of delivery being finalized and in facts of this case, the contract of delivery from so far can be a concluded contract even if the receiver keeps his option to receive cargo either at Hazira or Dahej which is next to each other. Mr. Parikh relied upon the correspondence which is forming part of the evidence before the learned arbitrators to buttress his contention. Similarly, relying upon the evidence which is on record as regards the Standby Letter of Credit, Mr. Parikh contended that it was obligation on the part of the opponent to give Standby Letter of Credit and such fact is never disputed by them at any stage. It was contended that even the amount communicated for Standby Letter of Credit was never being disputed by the opponent and the parties were at adidem that such Standby Letter of Credit was towards security and could be based on some estimate and therefore, on such count, it cannot be said that the contract was not concluded. It was further contended that thus, the learned arbitrators have considered the detailed arguments and evidence produced before them and after considering the closing submissions, the learned arbitrators have considered each point on various evidence and have relied upon it separately. Mr. Parikh also relied upon such Page 29 of 101 C/IAAP/55/2017 ORDER plethora of evidence which are also produced before this Court and contended that the learned arbitrators have threadbare considered each and every aspects and have interpreted the evidence before it and have passed the impugned award.

29. Mr. Parikh, on the aforesaid contentions, further contended that the scope of the present proceeding is not to decide or take final view on merits of the arguments and to deal with each and every submission individually. On basis of the aforesaid contentions, it was contended that there is no perversity, unreasonableness, etc. or that the same shocks conscience or goes to the root of the matter. It was also contended that the contentions raised by the petitioner provide a strong and conclusive foundation for every finding of the Tribunal.

30. Mr. Parikh further contended that various submissions have been made based upon various clauses of master agreement, confirmation notice and delivery notice. However, all such questions are interpretation of contract which is correctly done by the Tribunal. It was contended that the facts and the evidence reveal that by mutual agreement and on taking legal advise, some aspects of earlier confirmation notice was reduced to the level of information by virtue of delivery notice and the same is based upon clear wordings of 3 documents and the course of Page 30 of 101 C/IAAP/55/2017 ORDER dealing between the parties is reflected in the meetings and communications. It was also contended that the fact that the delivery notice is not signed and its impact is specifically dealt with by the learned arbitrators in the award. It was further contended that the Tribunal has rightly came to the conclusion that all the matters in the delivery notice are construed to be of operational relevance only and therefore, no fundamental policy of Indian law can be violated by such a finding. It was also contended that such finding of fact cannot be termed as perverse in light of various meetings between the parties and the clear language of master agreement, confirmation notice and delivery notice and that these were rendered of operational importance with open eyes and upon legal advise. It was also contended that whether the slot is available or not was as such the problem of the opponent and once having signed the confirmation notice, the opponent knew that signing of the same constitute a binding agreement and non availability of slots cannot therefore mean that there was no concluded agreement once the confirmation notice was signed. It was also contended that take or pay is liquidated damages and it is a matter of fact that its calculation was not even disputed by the opponent even though chance was given in course of arbitration. It was contended that the Page 31 of 101 C/IAAP/55/2017 ORDER contention raised at the delivery notice was not considered a contract because of 14 day period, but the confirmation notice was a contract just by 18 days is absurd. It was contended that only one confirmation notice was signed and the same will immediately source for all consignments. It was further contended that if 14 day delivery note becomes 14 day delivery note of all supplies, the supplier would have only 14 day period to source all supplies if the deliver notice was deemed to be the contract and such reasoning adopted by the learned arbitrators make full commercial sense and therefore, it was contended that 14 day delivery notice could never have been contemplated as a binding contract. Mr. Parikh, on the aforesaid basis, contended that the contentions raised by the opponent clearly fail to appreciate the basic rational in the award.

31. Mr. Parikh further contended that all judgments relied upon by the opponent are on facts of each case and the conclusion arrived at is a view taken on facts of each case. It was contended that it cannot be said that a contract cannot be implied by course of dealing and therefore, the judgments which are relied upon by the opponent do not lay down any principle of law and hence, are irrelevant to the finding whether there is violation of fundamental policy of Indian law. It was contended that the judgments do not say Page 32 of 101 C/IAAP/55/2017 ORDER that one cannot have contract like this and it would not go to the level of fundamental policy of Indian law. It was similarly contended that the judgment relied upon by the opponent reported in AIR 1993 AP 5 deals with the aspect of oral agreement to sell the land and the finding is arrived at that the agreed sale price was found to be false. However, the same does not apply to the facts of the case as in the said case, oral Banakhat was disbelieved and the same does not lay down any law much less any fundamental policy of Indian law. Similarly, the judgment of the Hon'ble Apex Court relied upon by the opponent reported in (2006) 1 SCC 751 and (1996) 2 SCC 677 do not lay down any proposition of law and are not applicable to the facts of the present case. It was contended that one can enter into a concluded contract leaving aside operational conditions at a later date and therefore, the said judgment would not be applicable. Similarly, it was contended that the judgment reported in 1984 ALR 504 is a case based purely on the aspect whether in light of oral dealings or documents, a contract is concluded or not and there was no written contract after negotiation and the said case is not based on any documentary evidence or contract and therefore, the same does not apply to the case on hand. The judgment reported in (1991) 1 SCC 1 is also based on relevant facts of the said case and is completely different and Page 33 of 101 C/IAAP/55/2017 ORDER not applicable to the present case. The judgments reported in 1986 (1) LLR 132 and 1955 ALR 278 are purely on facts and would not be applicable to the present case. Similarly, the judgments reported in (1994) 4 SCC 545, (2009) 5 SCC 313 also are not applicable to the present case. The judgment reported in 1929 AER 679 relates to fix price issue and not applicable in the present case. On the aforesaid basis, it was contended that in the case on hand, whether this Court is required to go into all these under Section 48 of the Act.

(i)That this Court cannot go into the merits and take a different view.

(ii)That even if view of the learned arbitrator is erroneous, the award cannot be set aside under Section 48 of the Act.

(iii)That in facts of this case, it cannot be said that the award cannot be enforced under Section 48 of the Act.

(iv) What is argued is the principle of the fundamental policy of India law, morality or justice or patently illegal or it shocks the conscience of the Court are all part of public policy argument.

(v)As per the Hon'ble Supreme Court judgment, there is a clear distinction Page 34 of 101 C/IAAP/55/2017 ORDER between the scope of public policy under Sections 34 and 48 of the Act.

(vi)That breach of Indian law, breach of Indian Arbitration Act, etc. cannot be argued under Section 48 of the Act.

(vii)Perversity, irrationality, etc. must be such that it shocks conscience of the Court goes to the root of the matter and is not of a trivial nature. It was contended that under Section 48 of the Act, failure to consider the evidence or wrong view on evidence or even a wrong on law are not the reasons not to enforce the award.

(viii)That it is within the jurisdiction of the learned arbitrators to interpret the contract and even if the interpretation is wrong, enforcement cannot be denied.

(ix)Interpretation of contract is based on fact and a finding of fact cannot be entered into under Section 48 of the Act.

(x) That for interpreting a contract even the Hon'ble Supreme Court permits reference to conduct correspondence between the parties, etc.

(xi)2015 Amendment is based on position of law existing at that time and therefore, the aspect of patently illegal is kept out of Page 35 of 101 C/IAAP/55/2017 ORDER the purview of Section 48 of the Act. It was contended that both the explanations to Section 48 of the Act are in relation to public policy and it is the public policy doctrine which comprises of this element and the same is narrowed down for the purpose of Section 48 of the Act.

32. Based on the judgment reported in 1994 Supp. (1) SCC 644, it was contended by Mr. Parikh that the aspect that the award merely violates Indian law is overruled and the same would not mean that it is violative of public policy. It was contended that this judgment is basis of all the judgments and the said judgment itself has laid down that it would not be violative of fundamental policy of Indian law. It was contended that one has not to show that the award is correct under Indian law and that there are not two tests at the same time. It was contended that if it violates public policy of India, fundamental policy of India, Indian law, such as, FERA, etc. and if enforcement of an award violates such principles, then, it cannot be enforced. It was contended that the instant case is a simple case, wherein it is found that there is a concluded contract and damages of take or pay is granted and enforcement has therefore no connection with public policy of India by miles. It was also contended that as decided by the Hon'ble Apex Court in the case of Renusagar Page 36 of 101 C/IAAP/55/2017 ORDER (supra), the public policy violated is not public policy on merits and the contention that the Arbitral Tribunal in passing the award has failed to appreciate unjust enrichment, the same is on merit. It was contended that it is the enforcement which should be violative of unjust enrichment and while making present award in reference of the contract, there cannot be question of going into whether the process of making award violated public policy. It is the enforcement thereof in India which must lead to violation of public policy in India. In this case, it cannot be so and the petitioner is seeking only enforcement of award based on contract, liquidated damages and/or damages and the same does not violate public policy of India law. In order to buttress the argument, Mr. Parikh has also relied upon the judgment in the case of Lal Mahal (supra) and it was further contended that under Section 48 of the Act, the examination is very very narrower. Referring to the judgment in the case of Associate Builders (supra), it was contended that the same deals with domestic arbitration. It was contended that how to view the evidence is on the arbitrator and unless and until it is obnoxious and that it shocks the conscience of the Court and that it is perverse, the same cannot be considered by this Court under Section 48 of the Act. It was contended that in the present case, the evidence has been considered by the arbitrators, the Page 37 of 101 C/IAAP/55/2017 ORDER confirmation note has been signed in the signing ceremony and the meetings have been held and by no stretch of imagination, it can be said that the finding is perverse. Referring to the judgments in the case of Food Corporation of India (supra) and Swan Gold Mining Ltd. (supra) (2015) 5 SCC 739, it was contended by Mr. Parikh that having entered into contract with open eyes and with this mechanism of master agreement, confirmation note and delivery note having done, the opponent cannot say that it is against the fundamental policy of Indian law. Referring to judgments in the case of Sutlej Construction Ltd. (supra) and National Highway Authority of India (supra), it was contended by Mr. Parikh that the opponent wants this Court to re appreciate the evidence and take a contrary view, which is not permissible under 3 legs of public policy concept and much less under Section 48 of the Act. It was contended that the argument that there is a breach of Indian law is erroneous. It was further contended that there is no perversity in the findings much less such finding that it would shock the conscience of the Court. Mr. Parikh also contended that once having entered into an agreement of a particular nature and facts showing admission on binding nature of the contract, even on merits, award is sustainable. Referring to the facts of the case, Mr. Parikh contended that whether prior or after 2015 Amendment, merits cannot be gone into for Page 38 of 101 C/IAAP/55/2017 ORDER public policy ground. It was further contended that the public policy argument is in the context of enforcement of award and not making of an award. It was contended that the findings arrived at by the Arbitral Tribunal as regards price formula being fixed and accepted letter of credit not disputed receiving terminal clause was an operational requirement and does not affect the binding nature of agreement of take or pay and damages not disputed even before the arbitrator was plausible conclusions based on evidence. It was contended that there is no embargo in Indian law that final contract cannot be concluded without fixing destination. In any case, this is not a fundamental policy of Indian law not demonstrated that any public policy is violated in narrow sense or that order is perverse or that it is violative of fundamental policy of Indian law. It was further contended that thus, the award cannot be said to be violative of Indian law much less violative of fundamental policy of Indian law. It was therefore contended that the findings do not violate public policy, neither they are perverse, nor unreasonable or irrational as to shock the conscience or go to the root of the matter. It was contended that no fundamental policy of Indian law is violated in enforcement of the award and it is not open for this Court to go into merits of the matter at all and this is precisely what the opponent has sought to do.

Page 39 of 101 C/IAAP/55/2017 ORDER

On the aforesaid contentions, it was therefore submitted that the objections be overruled and the application be allowed and this Court may be pleased to pass an appropriate order considering the award passed by the arbitrators as deemed to be decree of this Court as provided under Section 48 of the Act.

33. It was submitted by Mr. Parikh that it is a very well considered award and all relevant issues and evidence is taken into account and the conclusion is supported in facts and law and there is total application of mind and the inference is arrived at on the basis of the evidence.

34. Though this Court is not directly concerned in its jurisdiction under Section 48 of the Act as regards merits of the award as both the sides have taken this Court through the evidence which was produced and adduced before the learned arbitrators and more particularly, Mr. Parikh has referred to and relied upon such evidence as narrated hereinafter.

35. Master agreement came to be executed between Malaysia LNG SDN BHD and Adani Energy Ltd. for sale of Liquefied Natural Gas (hereinafter referred to as "LNG") on 2.8.2006. It was contended by Mr. Parikh that the purport and structure of contract clearly bornes out from the master agreement and it also reflects what Page 40 of 101 C/IAAP/55/2017 ORDER was the understanding between the parties. Referring to Clause (C), it was contended that it is provided in the master agreement in the initial part of it in Paragraph (C) as under: "This Agreement shall serve as the 'Master LNG Sale and Purchase Agreement' to cover transaction(s) between the parties which shall be described more specifically by each Confirmation Notice, in general form attached as Schedule C."

36. It is provided that this agreement and confirmation notice in general form attached at AnnexureC constitutes the agreement and not just the confirmation notice. On the basis of the same, it was pleaded that it is not that there was no understanding between the parties. It was further contended that considering the definition of word "agreement" as defined in Clauses 1-1.1 of the master agreement, the agreement includes the master agreement as well as the confirmation notice and therefore, master agreement and confirmation notice will have to be looked together. Referring to Clauses 2.3, 20.1 read with Clause 33, it was contended by Mr. Parikh that most pertinent in this context is the understood mechanism between the two parties. It was contended that the minute the confirmation notice is signed conclusive liabilities and right arise and there is no backtracking and it is a concluded contract. It was further contended that the rights and Page 41 of 101 C/IAAP/55/2017 ORDER liabilities of buyer and seller immediately triggers the minute confirmation notice is signed. Further referring to Clauses 12.1, 12.2, 12.3.1 and 12.3.2, it was reiterated that on signing of confirmation notice, obligation of buyer arises and it stands triggered. It was further contended that signing of confirmation notice, thus, crystalizes into a concluded contract and irreversible situation arises both for seller and buyer and therefore, if the buyer fails to take after confirmation notice is signed, buyer is responsible to the seller for take or pay and vice versa.

37. Referring to Schedule C, it was contended that proforma of confirmation notice unequivocally proclaims loud and clear that once you sign it, it is an agreement for purchase and sale. It was further contended that it is a fact that original confirmation notice require details of receiving terminal, SBLC, price quantity, etc. to be stated. It was contended that the minute confirmation notice is signed, master agreement and confirmation notice becomes a concluded contract. It was further contended that both say beyond shadow of doubt that now it is a concluded contract. It was further contended that the dealing in question, is between two mega Corporations of the world, with backing of full legal teams and very importantly when they signed confirmation notice, they understood the Page 42 of 101 C/IAAP/55/2017 ORDER purport of the same and they cannot wish it away. It was contended that confirmation notice had details, but the evidence will show that nature of dealing changed from regular contract to a short term agreement as the opponent actually adopted the same master agreement and modified confirmation notice with open eyes. It was further contended that ethos on the basis is that the moment confirmation notice is signed, it is a concluded contract and that understanding continue.

38. On the aforesaid short background, it was further contended by Mr. Parikh that correspondence shall demonstrate that it was the opponent who was tracing for supply and not other way round and in fact, the opponent was over keen to have cargo. It was further contended that two very important aspects emerge from the facts of the case. Firstly, that the opponent fully understood purport mechanism of price and now the opponent is trying to place glows or simplification. Secondly, the opponent very well knew what is meant by price mechanism and therefore, the opponent never rescinded the contract on ground of price and never objected hedging mechanism as the same was known to them.

39. It was further contended that the opponent was always confident that they are bound to get slots and on the basis of the concocted Page 43 of 101 C/IAAP/55/2017 ORDER evidence, the opponent has tried to show that their slots were not available. It was urged that the opponent was always being keen to finalize the dealing without reference to slots and therefore, it was contended that if a party chooses to neglect and in over confidence signed the binding agreement cannot turn and say that there was no concluded contract. It was also contended that nonavailability of slot is just a sludge and a got up defence to avoid being bound by contract which is absolutely wrong. Referring to the letter addressed by Petronet LNG Ltd. dated November 3, 2006 (Pages 8990 Volume I), it was contended by Mr. Parikh that as per the letter addressed by the Managing Director of the said Company to the Chairman of the opponent, 24 slots were available between January 20, 2007 till December 16, 2007 specifically informing the opponent that the said Company can receive on a consistent basis 3 cargoes every two months i.e. 18 cargoes per annum, the arrival date of which has been carefully planned and dovetailed to the shipping schedule to cargoes from RasGas. On the basis of the aforesaid letter, it was contended by Mr. Parikh that it is not that the slots were not available. It was further contended that thus, the aforesaid letter gave confidence to the opponent that they would be able to get slots and as they knew that the slots are available, they entered into a binding agreement. Further, Page 44 of 101 C/IAAP/55/2017 ORDER referring to the minutes of the meeting dated 23.11.2006 (Page 92 Volume I), it was contended by Mr. Parikh that the opponent had sufficient assurance from Petronet LNG Ltd. and the opponent was also to put up regasification terminal at its own port Mundra and thus, relying upon the minutes of the very meeting, it was contended that the opponent had no issue with slots and was in fact confident to get the slots. Mr. Parikh also referring to the email dated November 29, 2006 addressed by Mr. Alok Singh, DGM of the opponent Company to Mr. Affendy of the petitioner stating that slots are available on the basis the letter of Petronet LNG Ltd. Mr. Parikh also further relied upon the email dated 1.12.2006 addressed by Mr. Alok Singh of the opponent to Mr. Affendy of the petitioner on the same aspect and availability of slots and wanting the petitioner to finalize the deal as NTPC tender is due on 4.12.2006 and further asking the petitioner to finalize the deal by 15.12.2006. It was contended that this demonstrates the very aggressive business aptitude and the same shows that the opponent was desperate in getting the cargo. Further referring to the email dated 1.12.2006 addressed by Mr. Affendy of the petitioner to Mr. Alok Singh of the opponent, it was contended by Mr. Parikh that the parties were negotiating on short term supply basis. Further, referring to the email dated 20.12.2006 addressed by Mr. Page 45 of 101 C/IAAP/55/2017 ORDER Affendy of the petitioner to Mr. Alok Singh of the opponent, it was contended by Mr. Parikh that what was discussed was cargo between April, 2007 to March, 2008 only on the basis of the short term cargo and not what was originally contemplated. Further, referring to email dated 26.12.2006 addressed by Mr. Alok Singh of the opponent to Mr. Affendy of the petitioner, it was contended that the same conclusively proves that what are to be purchased was already sold by the opponent and the same demonstrates hyper aggressive business judgment to enter into the deal without arranging their house in order and have sold without receiving the cargo. On the aforesaid basis, it was contended by Mr. Parikh that thus, the opponent was over confident for the deal and now they are not ready to pay. It was contended by Mr. Parikh that for closing their deals, slots are not necessary and they can enter into the contract for sale without slots and that is binding, however, agree to purchase is not binding. It was therefore contended that this is an act of over confidence and a commercial judgment on the part of the opponent and the petitioner cannot be asked to pay the price for the same. Referring to the email dated 17.1.2007 addressed by Mr. Alok Singh of the opponent to Mr. Affendy of the petitioner, it was contended by Mr. Parikh that that the opponent was aware about the tieups of the petitioner. Similarly, referring to the Page 46 of 101 C/IAAP/55/2017 ORDER email dated 17.1.2007 addressed by Mr. Affendy of the petitioner to Mr. Alok Singh of the opponent, it was contended that the same indicates that the short term agreement is adaptation of old skeleton for new deal. It was contended that it is not completely the old deal and in light of change of nature of supply that old skeleton was modified to serve the new arrangement. It was contended that it is not that in the old arrangement, confirmation notice was not there. As per the new arrangement, master agreement was kept as it is, but the confirmation notice was changed in relation to short term agreement. Referring to the internal email addressed by Mr. Affendy of the petitioner to one Khairul Riza dated 18.1.2007, it was contended by Mr. Parikh that the same constitutes backbone of supplies at Dahej. Referring to email dated 19.1.2007 addressed by Mr. Alok Singh of the opponent to Mr. Affendy of the petitioner, it was contended by Mr. Parikh that there was no retort on price or Dahej or the slot, but the same speaks of only giving L.C. from ICICI Bank. Mr. Parikh also referred to the internal email dated 4.2.2007 addressed between the authorities of the petitioner themselves which speaks of new confirmation notice. Mr. Parikh further referred to the minutes of the meeting held between the parties at Bangkok on 15.2.2007 and 16.2.2007. As regards supply as well as price, it was Page 47 of 101 C/IAAP/55/2017 ORDER contended that the same shows that there is application of mind and not just confirmation. It was contended that in the said meeting, everything was discussed including the confirmation notice, short term agreement to be shown to the lawyers, next step to be taken by the parties and there was complete application of mind as to what should go and what should not go, new clauses were also added. Mr. Parikh also referred to the letter addressed by Hajira LNG Pvt. Ltd to the Chief Executive Officer of the opponent dated 22.2.2007 informing that the said Company is not in a position to offer any regasification capacity.

40. Further, referring to the email dated 23.2.2007 addressed by Mr. Affendy of the petitioner to Mr. Alok Singh of the opponent, it was contended that the parties were alive to the specification of ships. Further referring to the internal email of the petitioner dated 23.2.2007 addressed by Mr. Affendy of the petitioner to Khairul Riza, it was contended that as on 23.2.2007, understanding was that the dates mentioned in it are available. Similarly, referring to the email dated 26.2.2007 addressed by Mr. Alok Singh of the opponent to Mr. Affendy of the petitioner, it was contended by Mr. Parikh that even on that day, they do not say that no slots are available either at Dahej or Hajira. Similarly, referring to the email Page 48 of 101 C/IAAP/55/2017 ORDER addressed by Mr. Alok Singh of the opponent to Mr. Affendy of the petitioner dated 27.2.2007, it was contended by Mr. Parikh that it was never in contemplation that slots were not available and on the contrary, the opponent was ready to take delivery in March and this is clear that there was no difficulty in finalizing the contract. It was contended that by email dated 1.3.2007, the petitioner informed the opponent for making arrangements to sign the short term deal on 12.3.2007 at Bangkok. Mr. Parikh also took this Court to buttress the contention raised as regards the discussion which was held in the meeting held between the parties at Bangkok on 5.3.2007, which is already observed hereinabove. It was further contended that everything was discussed in the meeting including the price element and even the slides were shown, price receiving terminal, SBLC everything was discussed and slides were shown to demonstrate the short term package for India by the petitioner. Mr. Parikh also referred to the form of confirmation which was exhibited and discussed in the said meeting and contended that in the said meeting, discharge port was mentioned at Dahej MNG Terminal, India.

41. Mr. Parikh extensively referred to the draft speech of Rajeev Sharma, CEO of the opponent dated March 12, 2007 and the confirmation notice which was signed by both the parties on Page 49 of 101 C/IAAP/55/2017 ORDER 12.3.2007 (Pages 207 to 217 Volume I). It was contended that it was a very preferred celebrated deal and not a private deal and the same was entered into with much fanfare which shows that it was a concluded contract. It was professed that because of the agreement only, the petitioner could venture in Indian market. Mr. Parikh further submitted that on the same day (i.e. on 12.3.2007), confirmation notice is signed in the same meeting for supply of gas in India and that is a concluded agreement. It was further contended that the confirmation notice was different than proforma, but was done with open eyes and with consent of the parties. It was contended that thus, it is for the change of transaction to short term supply and that master agreement and confirmation notice becomes a short term agreement. It was further contended that while confirmation notice unambiguously state that it is a concluded contract, it is leaving only some information to be supplied which will be done by delivery notice and therefore, fundamentally while confirmation notice continues to be a basic contract and earlier confirmation notice require certain information which were fundamental part of the confirmation notice, the new confirmation notice relegates merely to information to be given by way of delivery notice. The earlier confirmation notice provided for such information to be given. The same is taken out from earlier Page 50 of 101 C/IAAP/55/2017 ORDER confirmation notice and only information is to be given by way of delivery notice. It was contended that old confirmation notice required to be filled in all details, without which, confirmation notice was not complete. However, new confirmation notice is signed with open eyes, wherein some information at secondary stage is to be given in form of delivery notice. It was contended that certainty of price is not affected at all and/or mentioned in confirmation notice gives alternative in price given. On the aforesaid basis, it was contended by Mr. Parikh that can it be contemplated that there is a vary type of pricing mechanism provided whereby the price can be contemplated is sufficient for a concluded contract. It was further contended that as the price structure stands in confirmation notice, there is a definitive structure to it and only if it provides that if hedging is possible, decision is to be taken by the opponent. It was also contended that the confirmation notice itself says that delivery notice is not a contract but only a mechanism of contract and primarily, master agreement and new confirmation notice would be short term contract and delivery notice was only meant for supply of certain information (Page 211 Clause 8). Mr. Parikh referring to the format of delivery notice which was forming part of the confirmation notice as exhibit (Pages 216 and

217), contended that the delivery notice is only Page 51 of 101 C/IAAP/55/2017 ORDER confirmation that agreement is already exhibited. It was further contended that the same does not talk about price as the price is concluded and negotiated by the parties and thus, every term of delivery notice is an operational requirement and cannot be considered essential term of the agreement. It was also contended that these are not the aspects without which contracts could not be concluded. Further explaining the format of the delivery notice, it was contended by Mr. Parikh that the same also provides for LNG Ship only the carrier to be decided by carrier and therefore, it is not an essential term of the contract and the same means that transport is not an essential aspect of contract. These are operational aspects of a concluded contract which can come into existence without that as well. It was further contended that if the ship details are not there under Indian law, it cannot be said that it is not a concluded contract. Same way, mentioning of receiving terminal is fairly an irrelevant to the concluded contract. This is all more so in this case as in India Hajira and Dahej are the only terminals and freight are the same and therefore, to nominate a receiving terminal is not a sacrosanct term specially in facts of this case and therefore, these terms are operational things. Mr. Parikh therefore contended that master agreement and confirmation notice would be a concluded contract. However, delivery Page 52 of 101 C/IAAP/55/2017 ORDER notice is not a contract. It was also contended that this is what the opponent agreed rightly or wrongly and therefore, there was a concluded contract. Mr. Parikh further referring to delivery notice which was signed only by the petitioner and not by the opponent as well as email dated 19.3.2007 addressed by one Mahmad Zahri to Mr. Affendy of the petitioner and further email dated 19.3.2007 sent by Mr. Affendy of the petitioner to Mr. Alok Singh of the opponent, contended that hedging was understood by the opponent and there are correspondences between the parties on record and interaction has taken place for hedging the price. Referring to the email dated 20.3.2007 by Mr. Alok Singh of the opponent to Mr. Affendy of the petitioner, it was contended that a person who has sold the cargo does not say that price escalation is wrong as per the contract, but only ask for reduction of the quantum of Standby Letter of Credit. It was further contended that even thereafter, the petitioner, by a further email dated 21.3.2007 (Page 237 Volume I) again interacted and again talked in the hedging angle and provided for a facility of hedging price at 8.50 US Dollars which was followed by another email sent by the petitioner to the opponent on 22.3.2007 at 11:28 a.m. (Page 240). Mr. Parikh referring to second email dated 22.3.2007 sent by Mr. Alok Singh of the opponent to Mr. Affendy of the petitioner at 02:30 p.m., contended that Page 53 of 101 C/IAAP/55/2017 ORDER the same shows that there was meeting and the opponent very much understood and the parties were at complete adidem as to how second portion works which is based on hedging. Similarly, referring to the email dated 26.3.2007 sent by Mr. Affendy of the petitioner to Mr. Alok Singh of the opponent, it was contended by Mr. Parikh that even the price aspect was further explained.

42. Mr. Parikh referring to the communication dated 27.3.2007 (Page 251 Volume I) addressed by the opponent to the petitioner, contended that for the first time on the said date, the opponent said that the terminal is not available and did not even refer to the price aspect. It was contended that exfacie the same is an unbelievable story and as such the opponent wanted to come out from the deal which they did not understand or the deal which was not fruitful. Mr. Parikh further referring to the letter addressed by the petitioner to the opponent dated 28.3.2007 (Page 252 Volume I) stated that the petitioner informed the opponent that on failure to take delivery, the petitioner would be sending the invoice on the basis of take or pay under Clause 12.2 of the master agreement and reminded the opponent that the opponent was required to send Standby Letter of Credit in accordance with the master agreement and confirmation notice latest by 22.3.2007.

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Referring to letter addressed by the opponent to Hajira LNG Pvt. Ltd. (Page 253), it was contended by Mr. Parikh that if there was no concluded contract, why would the opponent asked for confirmation of the same dates for the same cargoes (Pages 253 and 264). Mr. Parikh also referred to the letter of Petronet LNG Ltd. to the opponent dated 29.3.2007 (Page 275 and 283 Volume I), whereby the opponent was informed by both the Companies that no slots are available for regasification. Reference was also made to TOP invoice for April cargo dated 3.4.2007 sent by the petitioner to the opponent. Referring to the letter dated 10.4.2007 addressed by the opponent to the petitioner, it was contended that such action is clearly not an act of a person who believes that there is no contract. On the contrary, it is an act of a person who is in breach and wants to find out a solution. Specifically referring to the communication dated 19.4.2007 again addressed by the opponent to the petitioner, it was contended by Mr. Parikh that within a period of 9 days, the opponent took a "U" turn and agreed for a meeting on 20.4.2007 at New Delhi. Mr. Parikh, in addition to that, also referred to the documents which relates to payment of April delivery notice for May, calculation of TOP, etc. (Pages 317, 319, 322, 323 and 324 Volume II).

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43. Further, referring to the meeting which was held at New Delhi on 20.4.2007 (Pages 336 and 337), it was contended that what was to be discussed in the said meeting was relating to invoice payment and further cargoes of short term agreement between the parties. It was further contended that it is nothing but acceptance unequivocally that there is a contract and everything is agreed also keeping in view the agreement and in fact the opponent agreed to pay the bill for April and May. It was contended that same is nothing else but take or pay and acting in terms of the contract at every stage. It was also contended that under Indian law, it is an admission after fully being aware about the points that they have raised earlier. Referring to the items to be discussed in the said meeting, it was also contended by Mr. Parikh that the attempt was to see how to mitigate the loss. Reference was also made to other relevant documents, such as reminder for payment, delivery notice for June, TOP invoices with calculations and final TOP invoices.

44. Mr. Parikh also specifically drew attention of this Court to the notice of termination dated 24.5.2007, whereby the opponent was specifically informed about various breaches of the contract. (Pages 374375 Volume II). Reference was also made to the reply dated 1.6.2007 given by the opponent (Pages 394395 Volume II). Summing up Page 56 of 101 C/IAAP/55/2017 ORDER the reference to the documents and evidence on record of the learned arbitrators, it was contended by Mr. Parikh that the very basic structure was that master agreement and confirmation notice constitute the basic agreement. It was pointed out that certain aspects of earlier confirmation notice were reduced to intimation or information by way of a delivery notice. It was reiterated that the delivery notice is not a contract while master agreement and confirmation notice explicitly state that they are contracts. Therefore, to read delivery notice as if it is fundamental to the confirmation notice is totally wrong as per the clear language of the documents. It was contended that in reply to the termination notice given by the opponent dated 1.6.2007, for the first time, the opponent has taken a stand that not providing fixed price is breach of confirmation notice despite various communications and meetings in relation to mechanism of hedging was undertaken. It was contended that the opponent, while accepting the hedging and inspite of 20 to 30 communications, for the first time, raised the issue of breach on the part of the petitioner and that there is no concluding contract. Referring to the communications dated 15.2.2007, 16.2.2007, 12.3.2007, 15.3.2007, 19.3.2007 21.3.2007, 22.3.2007 and 26.3.2007, it was contended by Mr. Parikh that there was full discussion and Page 57 of 101 C/IAAP/55/2017 ORDER negotiation explanation as to how the pricing mechanism is to work and full hedging of pricing mechanism was explained to the opponent and the same was also agreed by them. It was contended that despite all these communications and meeting, not on a single occasion, the opponent has demanded fixed price, failing which, there is no contract. This is done for the first time in their letter dated 1.6.2007 (Page 394) when they replied to the termination notice. It was contended that the pricing mechanism was fixed between the parties and wellunderstood to state that the price was fixed between the parties and wellunderstood. It was contended that now to state that the price was not certain and hence, there is no contract is exfacie false. It was also contended that Indian law permits a concluded contract with price mechanism and permits a formula and it is not necessary to have a fix price for a concluded contract. It was further contended that such contract is permissible under Indian law and therefore, it does not violate any fundamental policy of Indian law. Mr. Parikh also contended that very wellunderstood, everything understood, price mechanism and at no stage, the opponent says that interpretation is wrong.

45. Mr. Parikh, referring to the aspect of slots, also contended that the opponent was always confident to get slots considering their Page 58 of 101 C/IAAP/55/2017 ORDER bargaining strength and status and also considering the fact that very few number of importers of LNG exist. It was contended that it may be that they had over aggressive business policy, where they even resold consignment which they had purchased expecting slots and now they have cooked up a story and created evidence that no slot is available. It was contended that irrespective of any of the above scenario, if the opponent choose to enter into a contract by signing a confirmation notice which says that it is a contract, then, they must take consequences. It was also contended that the slot aspect was very irrelevant to them as they had forward sold this very consignment. It was contended that if this forward sales are binding contracts without slots, there is no reason why principal contract is not a binding contract without slots. It was contended that slot is a unilateral issue and in facts of the present contract, the same cannot be placed on pedestal of essential element of the contract. It was reiterated that it is an operational thing and it cannot mean that the contract is not there. In order to buttress the aforesaid argument, Mr. Parikh referred to the letter of Petronet LNG Ltd. dated 3.11.2006 (Page 89) and other documents which are discussed hereinabove including signing of confirmation notice, meeting at Delhi on 20.4.2007, delivery notice for June cargo, etc. It was further reiterated Page 59 of 101 C/IAAP/55/2017 ORDER that similarly, the aspect of Standby Letter of Credit was also known to the opponent and the opponent very well knew that they were required to give such letter of credit. It was contended that though the amount of Standby Letter of Credit has been stated in the correspondence, the opponent has never stated that the amount is wrong. It was also contended that in absence of either, there is no question of terms of letter of credit being uncertain and in fact, the opponent did not give SBLC as they wanted to avoid the contract which was not beneficial to them. Referring to the correspondences dated 15.3.2007, 19.3.2007, 21.3.2007, 23.3.2007, 17.4.2007 and 22.5.2007, it was contended that the amount of L.C. was always stated in the delivery notice. Again referring to the email dated 20.3.2007 addressed by Mr. Alok Singh of the opponent to Mr. Affendy of the petitioner (Page 235 Volume I), it was contended by Mr. Parikh that accepting the fact that SBLC is to be given and also accepting the fact that under the contract, amount of SBLC is also right and they say that they have problem with the Bank and that the Bank will give letter of credit of lower sale price and thus, the opponent accepted that there was an obligation that the letter of SBLC is to be given and the opponent also accept the amount to be given but says that SBLC may not be of opponent's sale price. It was thus contended that there was no dispute about the Page 60 of 101 C/IAAP/55/2017 ORDER terms of SBLC and there is complete certainty about the same. It is never disputed and at least terms of SBLC are certain and are not disputed in a single communication by the opponent. It was therefore contended that the findings are not in violation of Indian law and there is sufficient clarity for price. Hence, it is an essential term of the contract. It was contended that so far as receiving terminal and letter of credit are concerned, they can never be elevated as essential terms. It was contended that even under the Indian law, both these aspects can be made open to a subsequent date after concluding a contract. It was further contended that thus, both these aspects are of unilateral nature as such and purchaser and seller can conclude a contract, wherein goods are to be delivered at a destination decided by the purchaser. It was further contended that this is all the more so in this case as there are only 2 terminals and both in Gujarat and either of the terminals would not make any difference to the seller, where the delivery of goods is given. It was also contended that thus, there was full certainty in connection with letter of credit and the amount as well as the price.

46. Referring to the impugned award, Mr. Parikh contended that the detailed submissions were made before the arbitrators and if this is to be Page 61 of 101 C/IAAP/55/2017 ORDER termed as nonapplication or perversity, then, there is no reasoned order existing in the world. Again referring to the award under consideration, Mr. Parikh contended that detailed crossexamination is conducted, documents are dissected and therefore, this is the way short of perverse, irrational and would be short of shock the conscience and it is neither violative of fundamental policy of Indian law. It was contended that in depth, analysis of everything has been done by the learned arbitrators and in all areas including price, an aggressive crossexamination is found and therefore, by no stretch of imagination, the impugned award can be termed as irrational. It was further contended that commercially, it is found that it makes sense and in such situation, the award is far from perversity and the award is one of the best award that one can see wherein all kinds of analysis have been made and it is a very well considered award, all relevant issues and evidence is taken into account and conclusions are supported by facts and law. It was contended that there is total application of mind and inferences are arrived at on the basis of the evidence on record. Again referring to the question of crossexamination before the arbitrator, it was contended by Mr. Parikh that all aspects including the price operational, unilateral clause have been discussed. It was contended that the opponent signed the Page 62 of 101 C/IAAP/55/2017 ORDER confirmation notice and left it open and entered into the binding agreement knowing that it was open. It was further contended that there is no law that unless you decide the receiving place, one cannot enter into a binding contract and receiving terminal are next to each other. Even it was reiterated by Mr. Parikh that even the amount of SBLC was certain and at no stage, the opponent has objected to their giving SBLC and the amount of SBLC. It was further contended that it is a security and has to be nearer to the price which is certain. Referring to the conclusions arrived at by the Arbitral Tribunal, it was contended by Mr. Parikh that the same are just and proper and in light of the aforesaid, even on facts and on evidence, which is considered by the learned arbitrators, the application deserves to be allowed.

47. Mr. Joshi in further reply to the contentions raised for and on behalf of the petitioner, contended that sum and substance of the contentions which are raised by the petitioner is to the effect that there was a concluded contract between the parties and that the petitioner had offered delivery of April, May and June cargoes and under such contract, the opponent refused to take delivery and thereby giving rise to Take or Pay obligations under such concluded contract and further in respect of August cargo, the petitioner is entitled for Page 63 of 101 C/IAAP/55/2017 ORDER breach of contract by the opponent.

48. Mr. Joshi contended that the contention raised by the petitioner that a confirmation notice read with the Master Agreement constituted a concluded contract and since both have been admittedly executed by the parties, it gave rise to the rights and obligations thereunder overlooking the fact that the Master Agreement did not create any obligation. Referring to the Master Agreement it was contended that Master Agreement contemplates a confirmation notice in the form at Schedule C being executed between the parties for concluding each contract. Mr. Joshi contended that as per the original confirmation notice, the same contained essential terms of the contract and required a written agreement on receiving terminal, contract sale price, payment and payment security, however the confirmation notice dated 12.03.2007 between the parties did not incorporate any agreement between the parties on receiving terminal or contract sale price, which had to be agreed to subsequently. Mr. Joshi contended that in fact the specimen of confirmation notice as per the schedule attached to the master agreement was divided between confirmation notice and delivery notice, which also had to be signed by both the parties and only upon execution of both, the modified confirmation notice as well as the delivery Page 64 of 101 C/IAAP/55/2017 ORDER notice, a concluded contract would come into existence and therefore, the contention as well as the findings arrived at that there is a concluded contract is perverse and irrational. Relying upon the judgment reported in 1984 (1) AIR 504 and (1006) 2 SCC 667 (supra), it was contended that without agreement on essential terms of the contract, the contract is not a concluded contract. Mr. Joshi contended that similarly the contention that form of confirmation notice was changed since the parties desired to enter into a short term contract rather than the long term contract is quite baseless and not supported by any evidence and in fact contrary to the mail of the petitioner itself dated 17.01.2007, whereby the petitioner had informed that as per the legal opinion received by it, no change of format was required.

49. Mr. Joshi contended that similarly, the contention raised by the petitioner that as decided by the arbitral tribunal, the aspect of receiving terminal and contract sale price were not essential to the contract and are merely operational terms is quite absurd inasmuch much as in a contract of such nature of sale of LNG cargo of value of more than USD 114,000,000 requires specialised shipping, unloading and storage facilities. It would be wholly irrational and illogical to conclude that the Page 65 of 101 C/IAAP/55/2017 ORDER place of delivery of cargo and the price are nonessential terms and merely operational in nature. Relying upon the ratio laid down by the Hon'ble Apex Court in the case of Bhupendra Singh Bhatia Vs. State of Madhya Pradesh & Ors. reported in 2006(13) SCC 700 and Neyveli Lignite Corporation Ltd. vs. Commercial Tax Officer, Cuddalore and Anr. reported in 2001(9) SCC 648, it was contended by Mr. Joshi that the price is always an essential condition of sale and purchase of goods and relying upon the judgment of the Apex Court in the case of Arosan Enterprises Ltd. vs. Union of India and Anr. reported in 1999(9) SCC 449, it was contended that even the place of delivery is a condition precedent for rights and obligations of parties to arise under the contract. It was thus contended that the conclusion arrived at by the arbitral tribunal is irrational, perverse, defies logic, contrary to the law of land and the entire basis of the award and the fastening of Take or Pay liability and damages on the opponent would stand displaced. It was also contended that such claims would arise only when there is a concluded contract by relying upon the judgment of the Apex Court in the case of Vedanta Ltd. vs. Emirates Trading Agency LLC reported in (2017) 13 SCC 243.

50. Mr. Joshi contended that even the contention raised by the petitioner that the finding Page 66 of 101 C/IAAP/55/2017 ORDER arrived at by the arbitral tribunal to the effect that the parties had specifically agreed that Hazira would be the receiving terminal and that Henry Hub Price + USD 1.85 would be agreed price for the cargo is totally perverse. Mr. Joshi contended that evidence clearly shows that Dahej slots were available only if the schedule could be confirmed by 15.12.2006. It was further contended that emails dated 03.11.2006, 29.11.2006 and 01.12.2006 clearly shows that the opponent was in hurry to get confirmation from the petitioner which was however not forthcoming and thus, offer of Dahej lapsed. It was further contended that the email dated 18.01.2007 on basis of which the inference of agreement by the nonresponse of the opponent is drawn, overlooks the fact that it was an internal mail not sent to the opponent at all. Referring to other mails dated 26.02.2007 and 27.02.2007, it was contended that the same relates to spot cargoes and not the subject contracts and are irrelevant as is the meeting of 05.03.2007, which is for other cargoes. It was contended on behalf of the opponent that such contention as well as finding of the arbitral tribunal is speculative and perverse in nature since if that was the position, the receiving terminal could have been stipulated in the confirmation notice which is executed much later on 12.03.2007. It was contended that the petitioner as well as the arbitral tribunal concluded that though Dahej Page 67 of 101 C/IAAP/55/2017 ORDER was clearly the receiving terminal on the basis of the aforesaid mails, though in fact, Hazira was considered as receiving terminal and therefore, such contention as well as finding defies logic. If that position existed, the same could have been mentioned in the confirmation notice executed on that day itself. Mr. Joshi contended that in fact, by a communication dated 22.02.2007, Hazira LNG Pvt. Ltd. had already conveyed to the opponent that no slots are available and this fact is not disputed or denied and therefore, it is inconceivable that the opponent would thereafter have conveyed to the petitioner that Hazira would be the receiving terminal. It was contended that thus, without there being any signed or executed agreement as regards receiving terminal in form of the delivery notice, the contract cannot be construed as concluded. It was contended that the evidence clearly show that on 15.03.2007, the petitioner inquired whether in fact Dahej was agreed as receiving terminal or not and without waiting for a response, delivery notice which is not signed by the opponent specifies Hazira. It is contended that thus, there is no agreement of a material and/or essential term of the contract, viz., place of delivery/receiving terminal as far as April cargo is concerned. It was further contended that as far as May and June cargoes are concerned, the petitioners themselves have Page 68 of 101 C/IAAP/55/2017 ORDER mentioned Dahej/Hazira in the respective delivery notices and therefore, there is no room for the contention that there was any agreement between the parties on such essential term. Referring to the termination notice dated 24.05.2007, it was contended that as far as June cargo is concerned, there is a mention in the termination notice itself that no receiving terminal was nominated and there is no reference to the August cargo or its place of delivery at all. Therefore, it is contended that even as per the case of the petitioner, place of delivery had not been finalised under the contract, except for April cargo and thus, the award of Take or Pay claims and for damages for the other three cargoes is clearly irrational and perverse. In addition to that, it is also contended by Mr. Joshi, learned counsel appearing for the opponent that the finding arrived at by the arbitral tribunal that it matters little to the foreign supplier as to which of the two receiving terminals was to be nominated by the Indian buyer completely defies logic and even the conclusion to the effect that such important aspect of contract was considered to be a postcontractual obligation of one of the parties which is wholly unsustainable and irrational and an exorbitant claim sounding the death knell of the company, upheld on such basis would shock the conscience of the court and the award is inexecutable under the public policy Page 69 of 101 C/IAAP/55/2017 ORDER doctrine.

51. It was further contended that the contention that the price was fixed under the confirmation notice executed between the parties and that in absence of any confirmation of opponent for hedging of the price offered by the petitioner, Henry Hub price + USD 1.85 would be the default price itself is contrary to the record. It was contended that no inference can be raised on the email dated 18.01.2007 and 04.02.2007 relied upon by the petitioner as such mails were not sent to the opponent at all. It was contended that similarly, email relied upon by the petitioner dated 19.03.2007 and 21.03.2007 refer to estimated price only for the purpose of SBLC and not the agreed price and it is a matter of fact that no SBLC was ever issued and therefore, the said mails are totally irrelevant. It as also contended that similarly, the email dated 19.03.2007 relate to other cargoes and not the subject cargoes. Mr. Joshi contended that the inference drawn to the effect that there was agreement relating to price based on conduct and mails prior to 12.03.2007 are totally irrelevant since the confirmation notice executed on that date contemplates a price being agreed to in the future based on an offer from the petitioner as seller which was never done. It was further contended that confirmation notice contemplated a fixed price being offered Page 70 of 101 C/IAAP/55/2017 ORDER by the petitioner prior to the loading of each cargo or prior to the determination date of the Henry Hub Settlement Price for the discharge month. It was further contended that the confirmation notice further contemplated that pursuant to the same, the opponent would confirm to the petitioner whether such price or Henry Hub price would be the price for contract and the same has admittedly never been done. It was contended that the learned arbitral tribunal has inferred that as the opponent did not offer any fixed price, Henry Hub Price + USD 1.85 became the default price of the contract. However, the award is totally silent as to when the purported agreement regarding the price was reached. It was contended that though neither Master Agreement nor confirmation and so also the correspondence between the parties contemplates that the same was for hedging, the learned arbitral tribunal has concluded that in fact fixed price concept was only for hedging, however, the same is nowhere provided for and thus, such conclusion arrived at is clearly perverse. It was contended that even though in the meeting held in the month of February 2007, it was clearly conveyed that the price offered at Henry Hub + USD 1.85 is too high and any price beyond USD 8.20 would be unviable, the tribunal concludes that the opponent must be taken to have accepted Henry Hub price + USD 1.85 and such finding defies logic. It was Page 71 of 101 C/IAAP/55/2017 ORDER contended that in absence of any offer of fixed price by the petitioner, essential term of contract remained inconclusive no liability could have been fastened or can been enforced against opponent for such inchoate contract. It was contended that ignoring the email dated 22.03.2007 sent by the petitioner to the opponent, wherein for April cargo, the hedging of price was fixed at USD 8.50, Take or Pay obligation has been calculated on basis of USD 7.50 + USD 1.85. It was contended that in a similar fashion, even though there was no agreement on price for May, June and August cargoes, Take or Pay/damages have been allowed without any basis.

52. Mr. Joshi further contended that SBLC was an essential term of contract and it is an admitted position that no Stand By Letter of Credit was furnished and in fact, it has been considered to be a breach in the termination notice issued by the petitioner and such important aspect has been totally ignored by the arbitral tribunal while holding that the contract was concluded between the parties and therefore, such finding is therefore irrational and perverse.

53. Though this Court is not concerned or called upon to decide the merits of the award, Mr. Mihir H. Joshi, learned counsel for the opponent has taken this Court through and referred to the Page 72 of 101 C/IAAP/55/2017 ORDER master agreement, confirmation notice as per the schedule attached to master agreement, the minutes of the meeting held on 15.2.2007 and 16.2.2007, the format of delivery notice and other relevant correspondences relating to discussion on price (Pages 158 to 162 Volume I). Referring to other part of the documents on record at Pages 89, 90, 98 to 103 of Volume I and Page 229 of Volume I, it was contended that the delivery notice has to be signed by both the parties and it is an admitted position that the delivery notice is not signed and hence, no conclusive contract exist. Referring to the format of delivery notice and the delivery notice which was sent by the petitioner, it was contended by Mr. Joshi that the delivery notice does not mention the price at all and even though the Companies at Hajira and Dahej had specifically rejected the question of receiving terminal, nonavailability of receiving terminal was already intimated to the petitioner. In addition to this, Mr. Joshi also referred to the documents at Pages 231, 232, 234 and 236 and contended that the price and payment of security was under discussion. Referring to the documents at Pages 251 and 252 of Volume I, it was contended by Mr. Joshi that delivery notice is only an offer and having not accepted is not a concluded contract. It was further contended that SBLC was to be given 10 days' prior and the same is not received by the petitioner because Page 73 of 101 C/IAAP/55/2017 ORDER of the fact that the price was not decided. Still however, notice was given on 3.4.2007 with delivery notice of the same date. Mr. Joshi further relied upon the documents relating to delivery notice as well as take or pay invoice of the cargo of May, June and August as well as the final invoices. Further referring to the letter dated March 27, 2007 addressed by the opponent to Malaysia LNG SDN BHD, it was contended by Mr. Joshi that the opponent informed the petitioner as regards non availability of regasification terminals at both the terminals and it was further contended that the opponent clearly indicated in the said letter that because of such constraints, it was not feasible to conclude the contract and also further informed the petitioner that in such circumstances, the letter of credit without availability of regasification facilities will not help to conclude the contract. On similar aspect, Mr. Joshi also relied upon the letter written by the opponent to the petitioner dated 1.6.2007 (Pages 394395 Volume II) as well as the termination notice given by the petitioner dated 24.5.2007 (Pages 374375 of Volume II) and final invoice dated 13.9.2007 raised by the petitioner (Pages 429430 Volume II). On the basis of the said documents, Mr. Joshi contended that there is no concluded contract between the parties. Mr. Joshi therefore contended that various questions arise. In the instant case, Page 74 of 101 C/IAAP/55/2017 ORDER such as whether is there any requirement of written contract and that in absence of signed contract between the parties, can a contract be said to be contrary to master agreement and confirmation notice, whether take or pay amount award is contrary to Clause 12.2 of the master agreement and as to under which circumstances, obligation arise for take or pay. It was contended that therefore, the findings are completely perverse. It was further contended that the petitioner as seller has evoked take or pay clause on 28.3.2007, which is contrary to the master agreement which also envisages a further notice. Referring to Clauses 6.3 to 6.5 of the master agreement, it was contended that the delivery is envisaged in a particular manner.

54. It was further contended by Mr. Joshi that all the 3 elements, namely, receiving terminal, delivery notice and the price are all 3 essential elements. Mr. Joshi contended that the master agreement accepts only concluded contract on facts. It was further contended that original confirmation notice has been bifurcated and delivery notice was to be signed by both the parties and therefore, take or pay as such has not come and the opponent cannot be made liable for the same. Mr. Joshi also contended that Hajira LNG Pvt. Ltd. had already indicated vide communication dated 22.2.2007 that it is not in Page 75 of 101 C/IAAP/55/2017 ORDER a position to offer any regasification capacity. Mr. Joshi contended that it is on record that Dahej was available only upto 15th December and such evidence could not have been brushed aside by the Tribunal. Further, referring to the award in question as well as the master agreement, Mr. Joshi contended that master agreement talks of price, receiving terminal, unloading point and confirmation notice. It was contended that the confirmation notice shall be only a valid and legal contract. It was further contended that if confirmation notice is divided in two parts, it will have to be read in consonance with the master agreement. It was also contended that confirmation notice is conditional in nature and the intention of the parties is to be seen from the documents itself. It was further contended that consideration of H.H. element price to be a default price has no commercial morality and the findings arrived at by the Tribunal are completely irrational. It was contended that the price was never fixed and no offer or acceptance is found on record and there is a complete reversal of confirmation notice and it is completely glossed over. The findings in the award are based on inferences and are absolutely irrational and it amounts to adding a term to the contract. It was contended that SBLC form which are considered by the Arbitral Tribunal were to be approved by the Bank and the same were only draft forms. It was contended that Page 76 of 101 C/IAAP/55/2017 ORDER payment of security was required to be made only after the contract and is it believable that cargo would be loaded without SBLC. It was contended that even though no SBLC is given, still however, it is held that there was a concluded contract. Mr. Joshi contended that no reasonable person would come to such a conclusion.

55. Mr. Joshi further contended that the findings as regards cargo of May is illogical though no unloading port was available, though Henry Hub price was still open, no security was given, still however, the petitioner proceeded to claim take or pay. It was contended that it was completely engineered to raise a false take or pay claim and in fact, May cargo was sold a day earlier. Similarly, June cargo and the delivery notice dated 18.5.2007 mention the name of vessel (Siriangkasa) which was at Dahej on that day and therefore, how take or pay comes into picture. Mr. Joshi therefore contended that such findings are bereft of common sense. Referring to the reply given by the opponent, it was contended that the conclusions arrived at are on incorrect principles. There is no oral evidence to that effect and nothing depends on oral presumptions. Referring to further conclusions in the award in question, Mr. Joshi contended that even if the correspondence is looked at, it is merely improbable and the dates do not match.

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Mr. Joshi further contended that it is crucial and imperative for a contract to be a concluded contract. It was further contended that the obligation is for delivery at the receiving terminal which was never agreed and SBLC was never given and therefore, the conclusion that what remained in the delivery notice was of an operational nature, is totally irrational and perversity is clear and the same is contrary to the contract. Mr. Joshi reiterated that there is no restriction to examine the award and only the merits cannot be looked into and reappreciation of evidence and review on merits is only prohibited.

56. Mr. Joshi further contended that the judgment of the Apex Court in the case of Renusagar Power Co. Ltd. (supra) & Lalmahal (supra) holds that the enforcement of the foreign award would be refused on the ground that it is contrary to the public policy if such enforcement would be contrary to the fundamental policy of Indian law or interest of India or justice or morality. Relying upon the said judgment it was contended that in fact, the objections raised by the opponents would fall within the said category and the present award deserves to be refused on the ground of public policy.

57. Referring to the judgment of the Associate Builders (supra), it was contended by Mr. Joshi Page 78 of 101 C/IAAP/55/2017 ORDER that the Hon'ble Apex Court has laid down that if the decision is perverse or so irrational or is such that no reasonable person could have been arrived at the same will not be sustained in the court of law. It was contended that the said judgment lays down that if the finding is based on no evidence or the arbitral tribunal takes into account irrelevant factors and ignores vital evidence, such decision would be perverse. It was contended that the fundamental policy of Indian law enunciates two principles, viz., to the effect that the arbitrator must have a judicial approach and he must not act perversely. It was contended that the Apex Court has held that enforcement of an award can be refused if it is found to be perverse or irrational.

58. Mr. Joshi, contended that judgment of Apex Court in the case of Swan Gold Mining (supra), Sutlej Construction Ltd. (supra) are the cases which are decided on the facts of that case and would not be applicable to the facts of this case.

59. It was further contended that even the Apex Court in the case of National Highways Authority (supra) as gone into the details of the case and have decided on the facts of that particular case and the said judgement would also not be applicable to the facts of the present case, however, it was contended that the Hon'ble Apex Page 79 of 101 C/IAAP/55/2017 ORDER Court has held in the said case that Court can interfere in case of a perverse interpretation.

60. Mr. Joshi lastly contended that the findings of the arbitral tribunal as regards the place of delivery not being an essential term of contract and also the finding of the tribunal as regards price and finding that the opponent had to offer hedging, failing which the price would become default price is totally perverse and irrational. It was contended that TOP obligation for April, May and June have been calculated without considering the evidence on record. It was contended May cargo was in fact sold to third party before loading on the vessel for delivery to opponent and June cargo was not at all loaded. However, it was held that it was offered for delivery. Similarly, it was contended that similar order for damages has been awarded for august cargo in absence of concluded contract.

61. On the basis of the aforesaid, it was therefore contended by Mr. Joshi that the conclusion arrived at by the learned arbitral tribunal is such that no person could ever reach. It was contended that the findings of the arbitral tribunal defies logic and are in fact irrational and perverse as already contended. Mr. Joshi contended that by such irrational and perverse findings, an astronomical amount of USD Page 80 of 101 C/IAAP/55/2017 ORDER 34,508,608.63 plus interest and costs is awarded against the opponents on such basis, which would shock the judicial conscience of this Court and therefore, this Court may be kind not to permit enforcement or execution of the award and dismiss the application.

62. The learned counsel for the petitioner has relied upon the judgment of the Apex Court in the case of Renusagar Power Co. Ltd. (supra) and has relied upon paras 27, 29, 30, 46 to 48, 51, 63, 65 and 66 of the said judgment and contended that the aspect that it violates Indian law is overruled by the said judgment and that would not mean that it is violative of public policy. It was contended that this judgment is the basis of all the judgments and the said judgement has laid down that it would not be violative of fundamental policy of the Indian law. It is further contended that one has not to show that the award is correct under Indian law and nor two tests are laid down at the same time. It is only in cases where it violates public policy like FERA etc., such acts constitute public wrong. It is only in case if enforcement of award violates such principles then it cannot be enforced. It was contended by the learned counsel for the petitioner that this is a simple case where it is found that there is a concluded contract and damages of Take or Pay was there. It was contended that enforcement of this award Page 81 of 101 C/IAAP/55/2017 ORDER has no connection with the public policy of India by miles.

63. Relying upon the judgment of Renusagar Power C. Ltd. (supra), it was also contended that the argument made by the opponent is as if the public policy is violated in passing the impugned award as the learned arbitral tribunal has failed to appreciate principles of unjust enrichment. However, such cannot be looked into at this stage as it would entail inquiry on merits. It was reiterated that enforcement which is violative of unjust enrichment, while making the present award in reference to the contract there can not be question of going into whether the process of making award violated public policy. It is the enforcement there of in India, which must lead to violation of public policy of India. In this case, it cannot be so as the petitioner is seeking enforcement of law based on contract of liquidated damages and/or damages and therefore, it was contended that same does not violate public policy of India.

64. The learned counsel for the petitioner also relied upon the judgment of Shri Lal Mahal (supra) and reiterated the same arguments. It was contended that the parameters of section 34 are wider whereas in the instant case, section 48 has a very narrow meaning.

65. Referring to the judgment of Apex Court in the Page 82 of 101 C/IAAP/55/2017 ORDER case of National Highways Authority (supra) and more particularly paras 10 to 13 and judgment in the case of Sutlej Construction Ltd. (supra), it was contended that the petitioner wants this Court to reappreciate the evidence and to take contrary view and it is not permissible under three legs of public policy concept and much less under section 48 of the Act. It was contended that the argument that there is breach of Indian law is erroneous. It was also contended that there is no perversity in the finding much less the finding that it shocks the conscience of this Court. Relying upon the judgment of the Apex Court in the case of Food Corporation of India (supra) as well as Swan Gold Mining (supra), it was contended that in the instant case, having entered into a contract with open eyes with this mechanism of master agreement, confirmation notice and delivery notice and having done that, the opponents cannot be permitted to say that it is against the fundamental policy of Indian law.

66. As against this, the learned counsel appearing for the opponent has relied upon the judgments of the Apex Court in the case of Shri Lal Mahal Ltd. (supra), Associate Builders (supra) as well as judgment of this Court in IAAP No.2 of 2017 dated 08.08.2017 and contended that such findings of the arbitral tribunal are perverse, irrational and the same would shock the Page 83 of 101 C/IAAP/55/2017 ORDER conscience of this Court and such nature of objections can be considered at the stage of execution of foreign award. Further relying upon the judgments of the Apex Court in the case of Dresser Rand S.A. vs. Bindal Agro Chem Ltd. reported in (2006) 1 SCC 751, U.P. Rajkiya Nirman Nigam Ltd. vs. Indure Pvt. Ltd. reported in 1996 (2) SCC 667, Trimurthy Constructions vs. Vijaya Lakshmi Gadgil reported AIR 1993 AP 95 and British Steel Corp. Vs. Cleveland Bridge and Engineering Co. Ltd. reported in (1984) 1 AER 504, it was contended by the learned counsel for the opponent that the impugned award itself is completely unreasonable/irrational and defies logic and that in facts of this case, there was no concluded agreement/contract.

67. Similarly, relying upon the judgment of the Apex Court in the case of Delta International Ltd. (supra) (paras 9, 16, 17) and Bank of India (supra) (paras 27 to 31), it was contended that since the confirmation notice clearly does not record agreement of all the necessary and essential terms, oral evidence is irrelevant in any case and it was further contended that the oral evidence to the same effect can hardly be stated to be untruthful.

68. Relying upon the judgment of the Apex Court in Rickmers Verwaltung (supra) (paras 10 to 14), Hofflinghouse & C. Ltd.(supra) and Zarati S.S. Page 84 of 101 C/IAAP/55/2017 ORDER Company Ltd., it was contended that the price was never agreed and Henry Hub price was never agreed to be default price. Similarly, relying upon the judgment of the Apex Court reported in Bhupendra Singh Bhatia (supra), it was contended by the learned counsel for the opponent that in a contract of sale and purchase, price is essential term and it cannot be considered to be merely of operational in nature. Relying upon the judgment of the Apex Court in the case of Vedanta Ltd. (supra) and more particularly paras 11 and 12, it was contended that the findings of the Tribunal are irrational, perverse and defies logic and is contrary to the law of the land and entire basis of Take or Pay liability is displaced as held by the Apex Court, such liability would arise only if there is a concluded contract.

69. Before reverting to the submissions made by the learned counsels appearing for both the parties, it would be appropriate to refer to the relevant provisions of the Act "47. Evidence.--

(1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the court--

(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made;

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(b) the original agreement for arbitration or a duly certified copy thereof; and

(2) If the award or agreement to be produced under subsection (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.

Explanation.-- In this section and in the sections following in this Chapter, "Court" means the High Court having original jurisdiction to decide the questions forming the subjectmatter of the arbitral award if the same had been the subject matter of a suit on its original civil jurisdiction and in other cases, in the High Court having jurisdiction to hear appeals from decrees of courts subordinate to such High Court.

48. Conditions for enforcement of foreign awards.--

(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that--

(a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or Page 86 of 101 C/IAAP/55/2017 ORDER

(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or

(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place;

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the Court finds that--

(a) the subjectmatter of the difference is not capable of settlement by arbitration under the law of India; or

(b) the enforcement of the award would be contrary to the public policy of India.

Explanation 1 --For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, Page 87 of 101 C/IAAP/55/2017 ORDER only if,

(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81, or

(ii) it is in contravention with the fundamental policy of Indian law; or

(iii) it is in conflict with the most basic notions of morality or justice.

Explanation 2 - For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

(3) If an application for the setting aside or suspension of the award has been made to a competent authority referred to in clause

(e) of subsection (1) the Court may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.

49. Enforcement of foreign awards.-- Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that Court."

As observed hereinabove, the petitioners have complied with the provisions of section 47 of the Act and therefore, no further elucidation is necessary on the said aspects.

70. In facts of this case, it would be appropriate to first deal with the jurisdiction of this Court under section 48 of the Act. It is Page 88 of 101 C/IAAP/55/2017 ORDER therefore appropriate to note that the award in question being a foreign award can be examined in light of the provisions of section 48 of the Act only more particularly as provided in Explanation 2 of section 48 (2) of the Act and the same shall not entail review on merits.

71. The case of the petitioner can be summed up as under

(i) That this Court cannot go into the merits and take a different view.

(ii) That even if view of the learned arbitrator is erroneous, the award cannot be set aside under Section 48 of the Act.

(iii) That in facts of this case, it cannot be said that the award cannot be enforced under Section 48 of the Act.

(iv) What is argued is the principle of the fundamental policy of India law, morality or justice or patently illegal or it shocks the conscience of the Court are all part of public policy argument.

(v) As per the Hon'ble Supreme Court judgment, there is a clear distinction between the scope of public policy under Sections 34 and 48 of the Act.

(vi) That breach of Indian law, breach of Page 89 of 101 C/IAAP/55/2017 ORDER Indian Arbitration Act, etc. cannot be argued under Section 48 of the Act.

(vii) Perversity, irrationality, etc. must be such that it shocks conscience of the Court goes to the root of the matter and is not of a trivial nature. It was contended that under Section 48 of the Act, failure to consider the evidence or wrong view on evidence or even a wrong on law are not the reasons not to enforce the award.

(viii) That it is within the jurisdiction of the learned arbitrators to interpret the contract and even if the interpretation is wrong, enforcement cannot be denied.

(ix) Interpretation of contract is based on fact and a finding of fact cannot be entered into under Section 48 of the Act.

(x) That for interpreting a contract even the Hon'ble Supreme Court permits reference to conduct correspondence between the parties, etc.

(xi) 2015 Amendment is based on position of law existing at that time and therefore, the aspect of patently illegal is kept out of the purview of Section 48 of the Act. It was contended that both the explanations to Section 48 of the Act are in relation to Page 90 of 101 C/IAAP/55/2017 ORDER public policy and it is the public policy doctrine which comprises of this element and the same is narrowed down for the purpose of Section 48 of the Act.

72. Per contra, the objections which are raised by the opponent can be summed up as under

1) That the impugned award defies logic and is irrational and perverse.

2) That the award is in contravention to the public policy of Indian law.

3) That it is such that it would shock the conscience of this Court.

4) That by the impugned award, Take or Pay liability for the April, May and June cargo and damages for the month of August has been awarded without there being any fixation of price, determination of place of delivery, without assurance of payment, i.e., without opponent having been provided any SBLC even though the opponent had conveyed to the petitioner to accept delivery much before the loading.

5) It was also further contended that the award is irrational, perverse and defies logic as TOP obligation have been awarded for the cargo of month of May, though it was sold to the third party before loading and Page 91 of 101 C/IAAP/55/2017 ORDER similarly for the June cargo, TOP is awarded even though no cargo was loaded at all and damages for August cargo is awarded in absence of concluded contract even though the contract was cancelled or rescind.

6) It is also contended that astronomical amount of USD 34,508,608.63 plus interest and costs is awarded against opponent on such basis that the same would shock the conscience of this Court.

73. It can be seen from the contentions raised by the learned counsel for the petitioner that in fact the petitioner has taken this Court through the plethora of evidence which was produced before the learned Tribunal. However, this Court is conscious of the fact that this court is not sitting in an appeal over the findings given by the learned arbitral tribunal on merits and therefore, the contention raised by the learned counsel for the petitioner cannot be examined denovo by this Court in its jurisdiction under section 48 of the Act. Similarly, the reference made to the evidence and on the merits of the award passed by the arbitral tribunal made on behalf of the opponent also cannot be examined on merits.

74. It also deserves to be noted that the learned counsel for the parties have relied upon the judgment on various aspects which touches the Page 92 of 101 C/IAAP/55/2017 ORDER merits. In addition to that, the learned counsel for the respondent has also relied upon the judgment of the Apex Court in the case of Associate Builders (supra) and has also relied upon various authorities on each point raised on merits. The judgment of Associate Builders (supra) deals with a case of domestic award and the public policy of India and other aspects as provided under section 34 r/w section 28 are examined by the Apex Court in context with the domestic award.

75. Upon considering the submissions made by both the sides and examining the findings and on perusal of the findings arrived at by the learned Arbitral Tribunal and keeping in mind the aforesaid narrow jurisdiction of this Court under section 48 of the Act, and only to examine whether the objections raised by the opponent falls within the scope and ambit of explanation 1 to section 48 of the Act in particular, the following facts narrated hereinbelow are necessary to be noted and appreciated.

76. That admittedly, the Master Agreement was executed between Malasia LNG SDN and Adani Energy Ltd. on 02.08.2006. It is inter alia provided that such agreement shall be served as Master LNG Sale and Purchase Agreement and shall cover transactions between parties, which shall be described more specifically by each Page 93 of 101 C/IAAP/55/2017 ORDER confirmation notice, in general form attached as Schedule C.

77. The confirmation notice which is part and parcel of the said master agreement as AnnexureC contained details such as LNG ship, receiving terminal, scheduled unloading date range, quantity, plant, loading port, contract sale price, payment, payment security, quality, demurrage and notices. As the record unfolds, the parties agreed to keep the master agreement as it is, however, voluntarily, agreed and divided original confirmation notice into confirmation notice and delivery notice. Such confirmation notice was subject matter of meeting held on 21.03.2007.

78. Whereas ,the proposed format of delivery note includes details such as LNG Ship, Receiving Terminal, Scheduled Unloading date range, quantity, quality and payment security.

79. The aspects which are highlighted by both the sides are on the aspect of price and receiving terminal in particular.

80. The confirmation notice prescribes for LNG ship, receiving terminal, scheduled unloading date range, quantity, plant, loading port, contract sale price, payment, payment security, quality, demurrage, force majuere, buyers first right of refusal, diversion right, notices. Such Page 94 of 101 C/IAAP/55/2017 ORDER confirmation notice was thus composite notice for four cargoes as can be seen from clause 4 of the said confirmation notice which provides for scheduled unloading date range. The said confirmation notice also provides as under "For the purposes of this Confirmation Notice, the term "Delivery Notice"

means a notice by Seller to Buyer which shall not be later than two (2) weeks prior to loading date of the LNG at the Loading Port, confirming the necessary details pertaining, including but not limited to, LNG Ship, Schedule Unloading Date Range, Plant, Loading Port, Quantity and Contract Sales Price, for the successful delivery of each of the four (4) LNG cargoes under this Confirmation Notice. The form of Delivery Notice is attached herewith as an exhibit."

The delivery notice prescribes for parties, LNG ship, receiving terminal, Scheduled unloading date range, quantity, quality and payment security.

81. Thus, the confirmation notice duly signed by both the parties on 12.03.2007 envisaged a separate delivery notice. It appears from the record that details such as receiving terminal was not fixed and price was alternatively provided, i.e.,Henry Hub Price + USD 1.85 or the price to be offered by the seller. Broadly speaking, the April cargo was loaded from the port of Trinidad. However, the same was sold on Page 95 of 101 C/IAAP/55/2017 ORDER 06.04.2007 before the cargo reached the Hazira terminal. Similarly, the record indicates that May cargo was sold before the loading date and June and August cargo were never loaded. The record also indicates that receiving terminal was not agreed between the parties and the opponent as buyer inspite of intimating the exact receiving terminal, on the contrary informed the petitioner that slots are not available. In spite of such factual position, the learned arbitral tribunal came to the conclusion that there is a concluded contract and that the opponents are liable for TOP obligation for April, May and June cargo and damages for August cargo.

Master agreement provided for TOP clause as under "12.1 Sellers and Buyer's Obligations Seller agrees to sell and deliver to Buyer at the Receiving Terminal, and Buyer agrees to purchase, take and pay for, or pay for if not taken, LNG in quantities, the quality and at the prices determined in accordance with this Agreement and the relevant Confirmation Notice.

12.2 Buyer's obligation to Take or Pay If Buyer fails to accept delivery of any LNG cargo under the Agreement, unless excused by Force Majeure or Seller's material failure to perform, Buyer shall be liable to pay Seller, in Page 96 of 101 C/IAAP/55/2017 ORDER accordance with this clause 12.2, an amount equal to such LNG quantity as specified in the Confirmation Notice multiplied by the LNG Price as specified in the Confirmation Notice in respect thereof ("Take or Pay Amount"

Notwithstanding the above, if Seller is able to find and complete sale transaction of such LNG cargo to a third party purchaser and Buyer has paid Seller, Buyer shall be entitled to receive the net proceeds of such sale realized by Seller from such third party, being the following (the "Net Proceeds")

(a) the total proceeds received from the sale to such third party plus any shipping costs saved, less

(b) all fees, commissions, duties, expenses and costs of sale, additional bunkering and other LNG Ship expenses over and above those costs which would have been incurred in transporting the cargo to Buyer's Facilities on the Scheduled Unloading Date Range (Including but not limited to demurrage for any delays resulting from such alternative sale);

provided, however, that if the Net Proceeds exceed the amount paid or payable by Buyer in respect of such LNG cargo, the difference between such Net Proceeds and the amount paid or payable by Buyer shall be retained by Seller for its own account.

82. Even at the cost of repetition, it is provided that the aforesaid facts are noted and taken into consideration in order to test whether the findings arrived at by the Tribunal falls within Page 97 of 101 C/IAAP/55/2017 ORDER the scope and ambit of explanation 2 of section

48. In the aforesaid factual background and following the judgment of the Apex Court in the case of Renusagar Power Co. Ltd. (supra) & Lalmahal (supra), even while exercising very limited and narrow jurisdiction under section 48, this Court finds that the learned arbitral tribunal has come to a finding that there is a concluded contract and that the details which were to be mentioned in delivery notice were operational in nature and post contract obligations and on such main plank, liability of the opponent is decided. On one hand, the master agreement provides that it would be a basic agreement for sale and purchase of LNG and accompanied by confirmation notice of each transaction. As per the conduct of the parties mutually, the original confirmation notice is given a go by as far as each transaction is concerned and a composite notice of all the four cargoes came to be executed as observed hereinabove on the finding that Henry Hub price was the alternative price, the claim is decided in favour of the petitioner by the learned arbitral tribunal. Even without touching the merits involved in the matter, with respect, the findings arrived at by the learned arbitral tribunal are perverse and irrational. The price aspect remained undecided till the last moment and admittedly, the receiving terminal was not fixed at all. Only because there are two Page 98 of 101 C/IAAP/55/2017 ORDER terminals available in India, i.e., Dahej and Hazira, the same can neither be presumed one way or the other and it cannot be termed as operational aspect. In a commercial transaction, if the goods are sent by the seller to the purchaser and that too at a distance like in the case on hand, to believe that the destination was operational in nature itself is perverse and irrational. The facts clerly establish that the delivery notices sent by the petitioner was a unilateral act on the part of the petitioner and the same are never signed by the opponent and that too without any SBLC being provided by the opponent, without determination of price and even without fixing the place of receiving the goods. In opinion of this Court, in any commercial transaction, the price segment and place of delivery are important segments for execution of a binding contract. Such notice is not signed by the opponent is an admitted fact and in such circumstances, with respect, the findings arrived at by the learned arbitral tribunal defies logic as rightly contended by the opponent. Even at the cost of repetition, it is provided that this Court has not endeavored to examine the award on merits as this Court lacks jurisdiction. However, on the aforesaid facts, it is clear that the findings are based on assumption that there is a concluded contract. The original confirmation notice was changed and the delivery notices not Page 99 of 101 C/IAAP/55/2017 ORDER having been signed and also considering the fact that there was no agreement on price and no fixation of the receiving terminal, in such circumstances finding that there was a concluded contract is a perverse finding and the same defies logic. The confirmation notice dated 12.03.2007 also provided for details like receiving terminal, price, contract price and right of the buyer to refuse delivery etc. as well as clause of SBLC. The facts clearly establish that no security was provided by the opponent and that the opponent had informed the petitioner that no slots are available. In addition to that, the facts reveal that in fact, the cargoes for May, June and August were not loaded at all for its shipment and even April cargo though loaded was sold before it reached to its destination which was fixed by the petitioner to be delivered at Dahej. Even as per the findings arrived at by the learned Tribunal, there is no finding to the effect that the delivery was physically brought at the doorstep of the terminal and it was refused by the opponent and therefore, the finding that the liability of take or pay is triggered defies logic in facts of this case.

83. In light of the aforesaid therefore, this Court is of the opinion that the findings arrived at by the learned arbitral tribunal are perverse, irrational and are such that it shocks the Page 100 of 101 C/IAAP/55/2017 ORDER conscience of this Court. Even the basic ingredients of take or pay are also not coming out from the bare reading of the record as well as conclusion arrived by the learned Tribunal as mentioned herein above, still however, a huge claim of take or pay is allowed by the arbitral tribunal and the same in opinion of this Court, with respect, is based on irrelevant consideration and perverse, irrational, defies logic and it shocks conscience of the Court and therefore, even within the limited jurisdiction of section 48 of the Act, the same is against fundamental public policy which falls within explanation 2 of section 48(2).

84. Even considering the binding decisions of the Apex Court and this Court, as well as the judgment rendered in petition no.2/17, there is no blanket bar that a foreign award cannot be examined even within the limited scope of explanation 2 of section 48(2). Having examined the same within that limited scope, the impugned arbitral award is perverse, irrational and is against fundamental public policy and is such that it shocks conscience of this Court and therefore, the execution of the award in question is refused. The application stands dismissed. However, there shall be no order as to costs.

(R.M.CHHAYA, J) bjoy Page 101 of 101

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Gujarat High Court