Summary
The Court upheld partial setting aside of a sulphur-supply arbitral award: damages for January–June 1992 survived, but the later-period claim lacked adequate proof of the relevant market price and loss. It declined to disturb the 12% interest award where the claim had not been contested before the tribunal and the objection did not establish patent illegality.
Issues
- Whether the damages awards for the two periods were sustainable.
- Whether reliance on foreign-currency interest principles required setting aside the 12% interest award.
Provisions considered
- Section 73, Indian Contract Act, 1872Ordinary damages required proof of the market-price and contract-price differential at breach. The later-period award lacked adequate evidentiary support and reasoning for its chosen price standard. (¶¶ 16, 17, 18, 19, 20)
Held
- The award for the first half of 1992 stood concurrently upheld, and the mitigation objection had not been raised before the tribunal. The Court found no basis to disturb it. MMTC had also delayed communicating the policy change and had not produced the underlying order in arbitration. (¶¶ 14, 15)
- For the later period, Baker failed to produce the best evidence it possessed concerning other contracts, prices, payments and shipments. Limited invoices and published price reports did not justify the tribunal’s selected market price or its unexplained rejection of the contract’s Canadian-price benchmark. (¶¶ 16, 17, 18, 19)
- Damages under Section 73 in an ordinary goods contract depend on the relevant market price at breach compared with the contract price, supported by proof. On this record the Division Bench correctly rejected the later-period damages. (¶¶ 16, 19, 20)
- The foreign-currency interest guidance discussed in Vedanta did not, by itself, establish patent illegality in this award. Baker’s interest claim had not been refuted or argued against before the tribunal, and the concurrent decisions sustaining 12% interest did not call for interference. (¶ 21)
Result
Both sides’ appeals dismissed. Partial setting aside of the award for the later period, and the surviving damages and interest award, left undisturbed. No costs.