Indian Kanoon - Search engine for Indian Law

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  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  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.

45. Mr.   Parikh,   referring   to   the   aspect   of   slots,  also   contended   that   the   opponent   was   always  confident   to   get   slots   considering   their  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  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  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  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  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. 

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  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  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.