Calcutta HC Declines To Interfere With Arbitral Awards In Iron Ore Supply Dispute; Says No Grounds Made Out U/S 34/37 A&C Act

Reaffirming the limited scope of judicial review under the Arbitration and Conciliation Act, the Calcutta High Court has dismissed two connected appeals under Section 37 filed by Orissa Minerals Development Company Ltd. (OMDC), upholding arbitral awards directing payment for excess procurement costs and loss of profits arising from stoppage of iron ore supplies to Jai Balaji Industries.

A Division Bench of Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya held that OMDC failed to show perversity, patent illegality, jurisdictional error, or breach of public policy to justify interference, observing that the appellants' grievance was essentially against contractual interpretation and factual findings by the Tribunal.

The Court rejected OMDC's core contention that supplies were conditional on advance payments, prior demand, availability, and tender participation, finding that the agreements used mandatory “shall provide” clauses and that waiver of 100% advance could be inferred from consistent supply without insistence on advance for months:

“There was conscious relinquishment of the known right to claim 100% advance payment… Such conclusion is a plausible view and cannot be interfered with under Section 34.”

The Bench further held that stoppage of supply constituted breach as the contracts did not permit suspension for non-payment, especially when quality disputes were pending and OMDC continued supplying without advance earlier.

On loss of profits and excess expenditure awards, the Court noted that the Tribunal relied on material including purchase orders and market price differentials, observing:

“Claims for loss of profit cannot be calculated with exactitude; reasonable guesstimate based on evidence is permissible.”

The Court dismissed OMDC's arguments on replication of awards, lack of evidence, and improper grant of interest and costs, clarifying that Section 31(7) empowered the Tribunal to award interest.

Finding none of the Section 34 grounds satisfied, the Court affirmed the dismissal of the Section 34 petitions and upheld the arbitral awards, directing no interference under Section 37.

Case: The Orissa Minerals Development Company Limited Vs. Jai Balaji Industries Limited

Case No: F.M.A. No. 939 of 2012

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