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Showing contexts for: Round tripping in M/S Beta Exim Logistics (P) Ltd vs M/S Central Railside Warehouse Co Ltd on 8 November, 2019Matching Fragments
% 08.11.2019 C.M. No.48438/2019 (exemption) Allowed, subject to all just exceptions.
FAO(OS) (COMM) 317/2019 & C.M. No.48437/2019
1. A challenge has been laid by the appellant/petitioner to the judgment dated 11.9.2019, passed by the learned Single Judge, dismissing a petition filed by it under Section 34 of the Arbitration & Conciliation Act,1996 ( in short 'the A & C Act'), assailing the Award dated 11.3.2019, passed by the learned Sole Arbitrator.
2. A brief reference to the relevant facts as recorded in the impugned judgment is necessary. The appellant/petitioner is a Company based in Cochin, State of Kerala. The respondent, Central Railside Warehouse Company Limited (in short, 'CRWC'), is a subsidiary of the Central Warehousing Corporation (CWC) that provides transit warehousing facilities to the Rail borne traffic at RWCs located near the Railway goods- shed across India. On 16.5.2014, the respondent/CRWC bagged an Award in respect of lease rights from the Southern Railways for operating Parcel Cargo Express Train (in short, 'PCE Train') from Chalakudi to Moga, on round trip basis. On 27.2.2015, a formal agreement was executed between the respondent/CRWC and the Southern Railways, upon the former furnishing a Bank Guarantee in favour of the latter, in accordance with the Letter of Award (LoA). The leasing rights granted under the agreement were valid from 15.10.2014 to 15.1.2018.
3. The value of the contract on a round trip basis from Chalakudi to Moga, was Rs.41,12,832/-, besides freight charges, development charges and service tax, which were also payable by the respondent/CRWC to the Southern Railways. It was agreed between the parties that the respondent/CRWC would make available guaranteed supply of parcel van/SLR under normal circumstances. However, in the event of certain unavoidable circumstances or operational exigencies, Southern Railways shall not be bound to fulfil its commitment qua the respondent/CRWC. The parties had also agreed that 50% of the lump-sum lease amount shall be paid by the respondent/CRWC to the Southern Railways at the time of loading at the respective ends i.e., Chalakudi and Moga.
16. Coming next to Claim No.2, for a sum of Rs.55,07,815/- raised by the respondent/CRWC towards loss of profit, the learned Arbitrator noted that in terms of Clause 22 of the agreement, prior to exiting, the appellant/petitioner was required to give an advance notice of two and a half months to the respondent/CRWC, which would have translated into 10.5 round trips as per the schedule laid down in the terms of the agreement. However, all of a sudden, without giving any notice, the appellant/petitioner terminated the said contract. Further, noting that under Clause 12 of the agreement governing the parties, the respondent/CRWC was entitled to receive 9% as facilitation charges fee on each trip and adding 10.5 round trips to 3.5 trips that were not operated by the appellant/petitioner on different dates, the Sole Arbitrator awarded a sum of Rs.55,07,815/- in favour of the respondent/CRWC.
19. We do not find any merit in the aforesaid submission made by learned counsel for the petitioner in view of the fact that the amount awarded by the learned Sole Arbitrator in favour of the respondent/CRWC is based on a simple formula under the contract. The appellant/petitioner having unilaterally exited from the contract, the learned Sole Arbitrator simply calculated the number of trips that it was required to operate every week, in terms of the agreement, which tallied to 10.5 round trips and adding to that 3.5 round trips that the appellant/petitioner had failed to operate prior to terminating the contract, arrived at the total loss of profit that the respondent/CRWC had suffered on the basis of each round trip.