Case: Oil & Natural Gas Corporation Limited Vs. Soconord Octg & Another

S.J. Vazifdar, J.1. These are cross-appeals filed against two orders passed by the learned Single Judge dated 8th February 2002 and 14th January 2011, in Arbitration Petition No.300 of 2000.M/s.Soconord OCTG, SA (the appellant in Appeal No.331 of 2011 and the first respondent in Appeal No.516 of 2002) is hereafter referred to as Soconord). The Oil & Natural Gas Corporation (the appellant in Appeal No.516 of 2002 and the first respondent in Appeal No.331 of 2011) is hereafter referred to as ONGC.2. The parties had referred their disputes to the arbitration. As the arbitrators could not agree, they referred the disputes and differences to a retired Judge of the Supreme Court (V.D. Tulzapurkar, J.) as an Umpire. The learned Umpire by his award dated 20th December 1999, dismissed Soconords claim and allowed ONGCs counter claim. The above petition was filed by Soconord against ONGC under section 30 of the Arbitration Act, 1940 to set aside the award.3. Appeal No.516 of 2002 is filed by ONGC against the orders whereby the learned Judge set aside the award and remanded the matter to the learned Umpire on the ground that the Umpire had failed to consider certain aspects of the matter. Appeal No.331 of 2011 is filed by Soconord against the orders insofar as the learned Judge rendered certain findings against Soconord.4. The impugned orders dated 8th February 2002 and 14th January 2011 were passed in the following circumstances:-(A) The learned Judge, by an order and judgment dated 8th February, 2002, set aside the award and remanded the matter back to the learned Umpire for de-novo consideration and decision on the ground that the Umpire had failed to consider whether ONGC had complied with the provisions of Section 55 of the Indian Contract Act.(B) ONGC filed the above Appeal No.516 of 2002 against the said judgment. By an order dated 2nd September, 2008, a Division Bench of this Court directed the learned single Judge to record his findings on all the issues that had been raised by Soconord so that all the findings could be considered in appeal at one time and not piece-meal. The Division Bench granted ONGC liberty to amend the appeal memo, if necessary, after the learned Judge decided all the other issues as well.(C) The learned single Judge thereupon, by the said order and judgment dated 14th January, 2011, decided the remaining issues. The learned Judge upheld the findings of the Umpire that time was of the essence of the contract and that two letters relied upon by Soconord did not support its case that ONGC was entitled to recover damages, if any, only from ONGCs agent and not from Soconord. The learned Judge, however, held that the learned Umpire had not considered the submission on behalf of Soconord that in view of the liquidated damages clause in the contract between the parties, it was not open to ONGC to claim any amount in excess of the amount stated therein. The learned Judge, therefore, remitted the matter to the learned Umpire also for reconsideration of the entire issue in this regard viz. whether in view of the liquidated damages clause in the contract, unliquidated damages can be awarded and the question that while calculating the amount of liquidated damages whether fluctuation in the rate of foreign exchange can be taken into consideration while arriving at the amount of damages.(D) The ONGC amended its memorandum of Appeal to challenge the findings in the order dated 14th January, 2011. Soconord filed the above appeal, challenging the findings rendered against it.5. The parties had entered into a contract dated 25th May, 1992. The effective date of the contract was 21st March, 1992. The contract was for supply by Soconord to ONGC of line pipes, risers and bends of different specifications. The value of the contract was Belgian Francs 408,537,745 of which 0.5% was to be paid to Soconords agent in New Delhi in non-convertible Indian rupees at the official BC selling rate on 21st March, 1992, and the balance was to be paid to Soconord.6. It would be convenient to collate the relevant clauses of the contract here :(A) Clauses 4, 5.1 and 5.2 of the main Contract read as under :-"4.1 The total Supply Contract price agreed to be paid by the Company to the Supplier for the entire Scope of supply is (B. Fr. 408,537,745 - B. Fr. 2,042,689.0) i.e B. Fr. 406,495.056 (Belgiue Francs Four Hundred Six Million, Four Hundred Ninety Five Thousand & Fifty Six only). The above Supply Contract price is based on the quantities of each item as indicated in para 3.0 above. In the event of any change in quantities the Supply Contract price shall be adjusted accordingly. The Supplier will be paid for the amounts due under this Supply Contract as per the terms of payment detailed in Clause No.12.0 of General Conditions of Supply Contract (Annexure - "A"). B. Fr. 2,042,689 (at the rate of o.5% of total Supply Contract Price) shall be paid in non - convertible Indian Rupees at Official B.C. selling rate of exchange prevailing on the date of placement of telex order i.e 21.3.92 by the Company to their agent in India M/s Multiple Commercial Co. Ltd., 108, Ansal Bhavan, 16, Kasturba Gandhi Marg, New Delhi 110 001 after 30 days of satisfactory receipt and clearance of all the consignments under this Supply Contract at Indian Port.5.1. The time shall be the essence of the Supply Contract. The Scheduled date for completion of delivery of the entire line pipes, risers & bends in two lots (one lot from FOB at the Port of Antwerp and the other lot from FOB at the Port of Marine Di Carrira, Italy) in the same vessel during the same voyage shall be within 4 months from the date of telex order i.e upto 20.7.92. The Supplier shall be fully responsible for completion of the entire Scope of Supplies to the satisfaction of the Company as per the above schedule.5.2. If the Supplier fails to complete the entire scope of Supplies or any part thereof till the above mentioned scheduled date of completion, then the Company shall be entitled to recover from the Supplier as ascertained and agreed Liquidated Damages, not by way of penalty, a sum of equivalent to half percent of the value of delayed portion for each week of delay or part thereof beyond the schedule date of delivery, subject to maximum of 10% of the value of delayed portion of Supplies, without prejudice to any other rights or remedies available to the Company under the Supply Contract; as per Clause No.14 of General Conditions of Supply Contract (Annexure-"A").(B). The General Conditions of Sales Contract (GCSC) formed a part of the contract. The relevant clauses thereof are as follows:-"11 WAREHOUSINGIn the event the Company/ Coating Contractor fails to take delivery of Line pipes from the Supplier as per the delivery date given in the Supply Contract or such other date(s) as may be mutually agreed, then the Supplier shall store the line pipes in his stock yard/ warehouse at delivery site. The Supplier shall be responsible for warehousing upto actual delivery. The Supplier shall not claim any cost of warehousing of line pipes for the period(s) nor Company shall pay any cost of warehousing of the line pipes, rises & bends under this Contract."In case the Coating Contractor/ Company fails to take delivery of the linepipes from the Supplier within 30 days after the scheduled delivery date in spite of its readiness as per provisions of supply order, then the Companys Representative shall issue certificate of readiness for delivery and payment shall be made by the Company after Supplier furnishes insurance coverage (for which Company shall reimburse) and the bank guarantee by Supplier towards the payment as per proforma (to be supplied by Company). However, Supplier shall be responsible for safe custody, maintaining the linepipes till the actual delivery. It will be the responsibility of the Supplier to make prompt delivery of the linepipes on demand to the Company and/or its authorized representatives."12.1 All payment shall be made to the Supplier through irrevocable letter of credit against the submission of following original documents to Company through State Bank of India, Bombay the bankers of the Company.a) Complete set of clean original Bill of Landing (Negotiable and three Non negotiable copies made to order and blank endorsed wherever applicable. The bill of lading will indicate "Freight to pay" It shall be ensured that the Supply Contract No.and date is indicated on bill of Landingb) Signed invoice in quadruplicate original being manually signed by Supplier, showing value of item wise as per the Supply Contract for customs purposes alongwith shipment details drawn in the name of Oil & Natural Gas Commission.Each invoice shall bear the following Certificate "THE MATERIAL COVERED BY INOVICE HAS PASSED TEST AND INSPECTION AND CONFORMS IN EVERY WAY TO THE SUPPLY ORDER SPECIFICATIONS AND IS SHIPPED IN ACCORDANCE WITH SUPPLY CONTRACT REQUIREMENTS. .,.....l) Certificate to the effect that details as mentioned below have been intimated through telex direct to the Port consignee, and above mentioned authorities (Refer para 1)i) Name of VesselWeightiii) Bill of Lading No.and Datev) Invoice No.and Date with valuevi) Date of Leaving Port of dispatchvii) Expected date of arrival at port of discharge13.3.1 Company shall have the right to defer the manufacturing/ delivery schedule of linepipes upto 8 weeks beyond the scheduled date of delivery as per Supply Contract without any extra cost or time impact to the Company. For this purpose, Company shall have to give a notice a minimum 6 weeks to the Supplier for effecting such deferment in the manufacturing / delivery schedule.13.7 The schedule of manufacturing of the pipes shall be mutually agreed and shall be subject to adjustments as the execution of the Project proceeds. Company may advise the Supplier to make changes in the schedule of manufacturing the pipes in line with the requirements of the Company. In case the Supplier is given due notice, the Supplier shall re-adjust his manufacturing schedule to suit to such revised delivery schedule, at no extra cost to the Company.13.8 The Supplier shall manufacture the line pipes as per specifications laid down in this Supply Contract (no stock material may be acceptable) and delivery the line pipes as per delivery schedule as aforesaid. Slippage, if any, in the delivery schedule or any anticipated slippages fore-seen by the Supplier shall be intimated to the Company at least 45 days in advance.13.9 If the Supplier fails to delivery/ Load the entire Line Pipes on to the designated Carrier(s)/ Vessel (s) within the free time allowed for the loading of the vessel(s) the Supplier shall in addition to Liquidated Damages leviable in terms of Clause14.0. Pay/ Reimburse to the Company any and all Demurrage and standby charges and other extra cost to the extent of maximum 5% of Supply Contract value which may become payable by the Company/ Coating Contractor to the Carrier including stand-by charges of equipment of Coating Contractor payable to Coating Contractor by Company.14. FAILURE AND TERMINATIONTime and date of delivery shall be the essence of the Supply Contract. If the Supplier fails to deliver the line pipes within the period fixed for such delivery as per schedule given by the Company or at any time repudiates the Supply Contract before the expiry of such period, the Company may without prejudice to any other right or remedy available to it to recover damages for breach of the Supply Contract.i) Recover from the Supplier as ascertained and agreed liquidated damages and not by way of penalty a sum of equivalent to +% (half per cent) of the value of delayed portion for each week of delay or part thereof beyond the scheduled delivery date or agreed deferred delivery date(s) of the consignment (as the case may be) subject to maximum of 10% (ten per cent) of the value of delayed portions.and/orii) Recover from the Supplier any and all standby charges and or extra costs which may become payable by the Company to the Carrier/ Coating Contractor on account of such delayed delivery of line-pipes or any consignment thereof covered under the Supply Contract including the Standby charges of Carriers and equipments of the Coating Contractor on account of delay in supply of line pipes, risen and bends not attributable to the Company/ Carrier/ Provided further that Suppliers / manufacturers liability under (i) and (ii) above shall be subject to a maximum of 5% each of the total Supply Contract value for each of (i) and (ii) above.b) Purchase or authorize the purchase elsewhere on the account and at the risk of the Supplier of the line pipes not so delivered or others of a similar, description (where line pipes exactly complying with the particulars are not, in the opinion of the Company which shall be final) readily procurable without cancelling the Supply Contract in respect of the installment not yet due for delivery.c) Cancel the Supply Contract or a portion thereof and if desired, purchase or authorize the purchase of the line pipes not so delivered or others of similar description / (where line pipes exactly complying with particulars are not, in the opinion of the Company which shall be final readily procurable at the risk and cost of the Supplier. If the Supplier had defaulted in the performance of the original Supply Contract the Company shall have the right to ignore his tender for risk purchase even though the lowest. Where the Supply Contract is terminated at the risk and cost of the Supplier under the provisions of this clause it shall be in the description of the Company to exercise its discretion to encash or not, the Performance Bond of the Supplier, on whom the Supply Contract is placed, at the risk and expense of the Supplier.d) Where action is taken under sub-clause (b) or sub clause (c) above, the Supplier shall be liable for any loss which the Company may sustain on that account, provided the Purchase or if there is an Agreement to purchase, such Agreement is made in case of failure to deliver the line pipes within 4 months from the date of such failure and in case of repudiation of the Supply Contract within 4 months from the date of repudiation of the Supply Contract by the Supplier. The Supplier shall not be entitled to any gain on such purchase and the manner and method of such purchase shall be at the entire discretion of the Company. It shall not be necessary for the Company to serve a notice of such purchase on the Supplier.e) Supplier further agrees that the Company shall have the fullest liberty and rights to recover the liquidated damages leviable and standby charges/ extra costs payable by the Company to the Carrier and the Coating Contractor as mentioned in (a) above by invoking the Bond for LD Guarantee and/or performance Guarantee furnished by the Supplier upto a maximum 10% of the Supply Contract Price of total quantity of the line pipes covered under the Supply Contract.""5.1 The time shall be the essence of the Supply Contract. The Scheduled date for completion of delivery of the entire line pipes, risers & bends in two lots (one lot from FOB at the Port of Antwerp and the other lot from FOB at the Port of Marine Di Carrira, Italy) in the same vessel during the same voyage shall be within 4 months from the date of telex order i.e upto 20.7.92. The Supplier shall be fully responsible for completion of the entire Scope of Supplies to the satisfaction of the Company as per the above schedule.5.2. If the Supplier fails to complete the entire scope of Supplies or any part thereof till the above mentioned scheduled date of completion, then the Company shall be entitled to recover from the Supplier as ascertained and agreed Liquidated Damages, not by way of penalty, a sum of equivalent to half percent of the value of delayed portion for each week of delay or part thereof beyond the schedule date of delivery, subject to maximum of 10% of the value of delayed portion of Supplies, without prejudice to any other rights or remedies available to the Company under the Supply Contract; as per Clause No.14 of General Conditions of Supply Contract (Annexure-"A").7. Soconord contended before the Umpire that its obligation to ship the consignment by 20th July, 1992 depended upon the performance of the reciprocal promise by ONGCs agent - the coating contractor, to make the ship available on time. ONGCs agent delayed in making the ship available. Soconord was, therefore, discharged from its obligation to ship the cargo by 20th July 1992. Immediately on the ship being available i.e. 6th August, 1992, Soconord commenced loading and completed loading on 11th August 1992 at Antwerp port and the vessel sailed from the port at Antwerp and reached the Italian port on 19th August 1992. The vessel, however, took delivery of only one item from the Italian port due to water draft problems of the vessel. Soconord further contended that on account of the delay on the part of its sub-contractor, the remaining cargo was shipped only in September, 1992. ONGCs Coating Contractor, after coating and wrapping etc. made the finished product available to the ONGCs laying contractor on time for the purpose of laying and fixing the pipes and other material on ONGCs platform. ONGC, therefore, suffered no loss whatsoever. Neither the laying contractor nor the Coating Contractor had made any claim on ONGC. The invocation of the guarantee by ONGC was, therefore, illegal. The guarantee was for liquidated damages. Soconord also disputed ONGCs computation of the delay in delivery and ONGCs right to claim damages on account of foreign exchange fluctuation due to the alleged delay on its part in supplying the material. Soconord further contended that it was unnecessarily required to keep the guarantee renewed for which it incurred charges.8. ONGC, on the other hand, contended as follows. Time was of the essence of the contract. The delivery on FOB basis was to be effective in two lots from both the ports by 20th July, 1992. Initially, the entire material was to be supplied from one port of dispatch viz. Antwerp in Belgian by 20th July, 1992, but on Soconords request permission was granted to sub-contract a part of the delivery to M/s. Delmines Mills, Italy and dispatch of that part of the consignment was to be from the port of Marina Di Carrara, Italy. Soconord, however, was to be responsible for the said supply as well. Thus, the entire quantity was to be supplied in two lots on FOB basis from the ports at Antwerp and Marina Di Carrara on the same vessel during the same voyage by 20th July, 1992. Soconord admittedly failed to deliver the material within time entitling ONGC to levy liquidated damages. There was no factual basis for Soconords contention that ONGC had failed to perform its reciprocal promise by keeping the vessel available. ONGC also submitted that its obligation to keep the vessel available was independent of Soconords obligation to keep the material ready for shipment on the scheduled date. Further, Soconord was responsible even for the delay in making the ship available before 20th July, 1992. The material was delivered ultimately only by 23rd September, 1992 i.e. after a delay of two months and three days, resulting in ONGC suffering a huge loss on account of payment having been effected at a higher foreign exchange rate than what it would have been, had the delivery been completed and payment made in the month of July. The difference in the foreign exchange rates is the loss suffered by ONGC which it is entitled to recover from Soconord. The loss suffered by ONGC is, in fact, much higher than what is stipulated in the liquidated damages clause. ONGC claimed an amount of Rs.1,61,26,538/- on account of the loss caused as a result of the foreign exchange fluctuation. By invoking the bank guarantee, ONGC recovered only Rs.60,80,435/-. ONGC, accordingly, claimed the difference of Rs.1,00,46,103/- with interest at 18% per annum from 22nd November, 1993, till payment.9. The Umpire raised the following points for determination :(A) Whether time for completion of delivery of the entire material by 20-7-1992 was of the essence of the Contract(B) Whether the two obligations (one on the part of the Claimant to keep the entire material ready for shipment at the two ports of dispatch by 20-7-1992 and the Respondents / Coating Contractors obligation to make the ship available before 30-7-1992) were independent of each other or these constituted reciprocal promises within the meaning of sec. 54 of the Indian Contract Act and which party committed breach of its obligation(C) Has the delay in completing the delivery on the part of the Claimants been correctly computed by the Respondents(D) Whether the loss arising out of Foreign Exchange fluctuation could be claimed by the Respondents and if so, whether the calculations thereof on the basis of Foreign Exchange Rates claimed by the Respondents is properRe : Point for determination - (A).(A) Whether time for completion of delivery of the entire material by 20-7-1992 was of the essence of the Contract10. Clauses 5.1 and 5.2 of the contract and clause 14 of the GCSC expressly provide that time is of the essence of the contract and the failure to complete delivery by the scheduled date would entail the levy of liquidated damages.11. The learned Umpire, after construing the terms and conditions of the contract, the conduct of the parties and the law, including the judgment of the Supreme Court in Hind Construction Contractors v. State of Maharashtra, AIR 1979 SC 720 , came to the conclusion that the other clauses in the contract did not in any manner detract from or exclude the express provision of the contract of time being of the essence. The Umpire rejected the contention on behalf of Soconord that in view of the other provisions of the contract viz. Clause 13.3.1 and clause 11 of the GCSC, time was not actually of the essence of the contract. The learned Umpire, after considering the judgment of the Supreme Court, held that the question is really one of the intention of the parties which must be gathered from all the relevant provisions of the contract, the conduct of the parties and the surrounding circumstances.12. The Umpire after considering the documentary evidence and the conduct of the parties came to the conclusion that the express provisions of time being of the essence of the contract could not be displaced even in view of the facts of the case. Some of the aspects considered by the Umpire are as follows:-After placing the telex of intent (akin to a work order) on 21st March, 1992, discussions were held in the kick-off meeting on 30th March, 1992 whereat Soconord assured ONGC that the material would be produced in approximately two months i.e. in April and May, 1992. This was reiterated in the formal contract dated 25th May, 1992, in the clauses we set out earlier. Further, the request to subcontract a part of the supply was granted by a telex dated 15th May, 1992, on the specific condition that delivery should be completed by 20th July, 1992. Soconord had agreed to the same. Moreover, the correspondence indicated that the parties were conscious that the entire material being supplied by 20th July, 1992, was important and fundamental to the contract. The correspondence in this regard was referred to by the Umpire. The request for extension of time by fourteen days to avoid liquidated damages was refused.13. The Umpire did not hold time to be of the essence of the contract only on the basis of the provisions to that effect in clause 5 of the main contract and clause 14 of the GCSC. Applying the ratio of the judgment in Hind Construction Contractors vs. State of Maharashtra, he arrived at this conclusion after considering all the relevant factors.The learned Umpire construed the entire contract, the correspondence between the parties and the conduct of the parties before coming to the conclusion that time was of the essence of the contract and the express conditions to that effect in the contract were not displaced as contended by Soconord.14. It is impossible to hold that the view taken by the Umpire is not a possible one. Indeed, it appears to be the correct view. The least that must be said is that the view taken by the Umpire was a possible one. It would, in any event, therefore, not be open to this Court to substitute its view, assuming it had another view, for the Umpires view. The learned single Judge has also come to the same conclusion in this regard.The learned Judge therefore, rightly held that the finding recorded by the Umpire that time was of the essence of the contract is a finding of fact arrived at after taking into consideration all relevant evidence and provisions of law, including the judgment of the Supreme Court in Hind Construction Contractors Vs. State of Maharashtra A.I.R. 1979 S.C. 729. The learned Judge rightly found that the finding recorded by the learned Umpire is a possible finding and, therefore, cannot be interfered with.15. The contention that the award ought to be set aside on the ground that the Umpire wrongly came to the conclusion that time was of the essence of the contract is, therefore, rejected.Re : Point for determination - (B).(B) Whether the two obligations (one on the part of the Claimant to keep the entire material ready for shipment at the two ports of dispatch by 20-7-1992 and the Respondents / Coating Contractors obligation to make the ship available before 30-7-1992) were independent of each other or these constituted reciprocal promises within the meaning of sec. 54 of the Indian Contract Act and which party committed breach of its obligation16. Soconord contended that even assuming that there was a delay on its part in arranging for the delivery of the material FOB at the ports, ONGC/ ONGCs coating contractor failed to perform their reciprocal promise of making the ship available before 20th July 1992 for effecting such delivery. Thus, without the ship being there, the FOB delivery at the two ports would be physically impossible. Soconord, therefore, claimed to have been discharged from performing its obligation in view of section 54 of the Indian Contract Act.17. The learned Umpire came to the conclusion that the delay in arrival of the ship at Antwerp on 6th August 1992 was due to the failure on the part of Soconord to give due intimation of slippage and, therefore, ONGC/ its Coating Contractor cannot be faulted for the delayed arrival of the ship at Antwerp. The learned Umpire came to this conclusion upon a detailed consideration of the rival contentions. The finding of fact which warrants no interference justifies the conclusion.18. The learned Umpire rightly accepted ONGCs contention that even assuming that there was an implied obligation on its part to make the ship available before 20th July 1992, the same did not constitute a reciprocal promise in view of clause 11 of the GCSC agreement. Clause 11 entitled ONGC to store the material at the suppliers stock yard/ warehouse at the delivery site. Thus, Soconords obligation to keep the goods ready for shipment on 20th July 1992 was not dependent upon the performance by ONGC of its obligation to make the ship available before 20th July 1992. Soconord was not concerned whether ONGC stored the material or shipped it. The question of a reciprocal obligation really did not arise.19. Mr.Malik, the learned Counsel appearing on behalf of the petitioner contended that under an FOB contract, the ship must also be kept ready. We will assume that to be so. However, in view of the finding of the learned Umpire, based on clause 11 of the GCSC, it would make no difference. Clause 11 contemplated a situation where the ship may not be available and provided that in such a situation, the ONGC would be entitled to have the goods stored at the stock yard/ warehouse. The criticism against the learned Umpire on the ground that he had failed to take into consideration the legal incidence of an FOB contract is, therefore, uncalled for.20. The learned Umpire did not stop there. He answered the question under consideration in favour of ONGC, also in view of the clause 13.8 of the GCSC, the Minutes of the kick off meeting held on 30th March 1992 and the evidence. Based on the same, the Umpire justifiably came to the conclusion that Soconord had failed to give ONGC intimation of slippage as required by clause 13.8. The notice of slippage was important for it takes time for a party to arrange a ship. The minutes of the kick off meeting required Soconord to give ONGC the production schedule within three weeks. Soconord however, informed ONGC that the material would be ready at Antwerp only by 14th July 1992 and in Italy by 20th July 1992. After analysing the correspondence and the evidence, the learned Umpire found this information to be incorrect. Based on the evidence the learned Umpire came to the conclusion that the manufacturing activities were lagging far behind and ultimately Soconord by its letter dated 20th July 1992 admitted that it was not in a position to deliver the material by 20th July 1992 and that the material would be ready for loading at both the ports only on 30th July 1992.21. It is evident on a plain reading of the award that the learned Umpires conclusion was arrived at after taking every relevant aspect into consideration. The provisions of the contract were construed and analysed, the evidence and correspondence was also considered. It is not open for this court to re-appreciate the evidence. The view taken by the Umpire is not only a possible one but in fact appears to be the correct one.The conclusion regarding Point "B" was, therefore, rightly in favour of the ONGC.Re : Point for determination - (C).(C) Has the delay in completing the delivery on the part of the Claimants been correctly computed by the Respondents22. The ONGC computed the delay to be 19 days i.e. three weeks from 5th July 1992 to 24th July 1992. 5th July 1992 was the date on which ONGC contended that the goods ought to have been kept ready at Antwerp to meet the contractual completion date viz., 20th July 1992. According to ONGC 24th July 1992 was the date of readiness of goods as certified in the Release Note issued by EIL - ONGC Inspectors. Accordingly, the liquidated damages were levied by ONGC in accordance with clause 14(a)(1) of the GCSC. Soconord on the other hand contended that the scheduled date for completion of delivery was 20th July 1992. ONGC, therefore, was not entitled to consider 5th July 1992 to be the date of commencement, as that would constitute re-writing the contract. The contract stipulates 20th July 1992 to be the date for delivery.23. The learned Umpire rejected Soconords contention holding that ONGC had not artificially carried the date of keeping the goods ready backward to 5th July 1992 and that the same did not amount to rewriting the contract. It is difficult to interfere with the findings of the learned Umpire.24. It is however, not necessary to consider this aspect any further. As noted in the award, the issue is academic as the ONGC had raised the claim for compensation due to delay on the part of Soconord on the basis of the loss suffered by it on account of foreign exchange fluctuation only. The issue, therefore, really is whether the claim for loss on account of fluctuation in the foreign exchange rate is maintainable or not25. This, therefore, brings us to last point for consideration determined by the learned Umpire.Re : Point for determination - (D).(D) Whether the loss arising out of Foreign Exchange fluctuation could be claimed by the Respondents and if so, whether the calculations thereof on the basis of Foreign Exchange Rates claimed by the Respondents is proper26. Two aspects arose for the consideration of the learned Umpire. The first was, whether the loss arising out of foreign exchange fluctuation can be claimed under section 73 of the Indian Contract Act and the second was whether the computation of the loss by ONGC was correct There are two further general aspects viz., the points on which the learned Judge remitted the award which we will deal with subsequently.27. As regards the first aspect viz., whether the loss on account of foreign exchange rate fluctuation can be claimed under section 73 of the Indian Contract Act, Soconord contended that the same cannot be considered to be a direct loss that had naturally arisen in the usual course of things from the breach on its part or a loss which the parties knew, when they made the contract, to be likely to result from its breach. The claim, therefore, Soconord contended is for remote damages, which cannot be granted under section 73 of the Indian Contract Act.28. The learned Umpire firstly held that there is no absolute rule that loss resulting from re-valuation of currencies are always too remote in law to be recovered. The learned Umpire rightly held that Section 73 does not bar a claim for compensation for loss or damages caused on account of the foreign exchange fluctuation. In other words, the loss on account of the foreign exchange fluctuation is not excluded from the ambit of section 73 of the Indian Contract Act. The plain language of Section 73 does not support a view to the contrary. There is no reason or justification to read such a limitation into the section either. A party who suffers a loss on account of the fluctuation in the rate of exchange due to the breach of a contract is entitled to claim the same under section 73 if he establishes that the same naturally arose in the usual course of things from such breach and/or which the parties knew, when they made the contract that loss to be likely to result from the breach of it. Whether these ingredients are fulfilled or not would depend upon the facts of each case. In Aruna Mills Limited vs. Dhanrajmal, (1968) 2 WLR 101, the Court rejected the contention that there is a special rule that losses resulting from revaluation of currencies are always too remote in law to be recoverable. The learned Judge held that there was no such rule. We are entirely in agreement with this view. Our attention has not been invited to any authority to the contrary. We see no reason on principle to read such a limitation into Section 73. We hasten to add that even if there is authority to the contrary, absent a binding authority, it would make no difference. The Umpire was entitled to prefer one view to another. An award cannot be set aside even if the Court prefers the other view. The judgment was referred to in the award. The learned Umpire rightly held such a claim to fall within the ambit of section 73.29. The learned Umpire rejected Soconords contention based on clause 4.1 of the main contract and clauses 12.1 and 12.3 of the GCSC under which the price was payable by ONGC to Soconord in foreign exchange (Belgian Francs). It is not possible to interfere with the decision that these clauses by themselves do not mean that the fluctuation in foreign exchange rate is irrelevant and that whether the loss arising on account thereof would be covered or not would depend upon several factors. The question to be determined upon an analysis of these factors is, whether such loss is a direct loss that had naturally arisen in usual course of things from the breach on the part of Soconord or whether it was a loss which the parties knew when they entered into the contract, to be likely to result on its breach. The learned Umpire, therefore, posed the correct question and proceeded to answer it.30. The learned Umpire answered this question in favour of ONGC also upon a consideration of the terms of the agreement and the facts of the case including the correspondence between the parties. The factors that persuaded the learned Umpire to hold that the claim falls within the ambit of section 73 are as follows :-(A) That there was a delay in delivery of goods was admitted. The finding of the learned Umpire is that Soconord was responsible for the same. Had the goods been delivered by the scheduled date, the payment could have been made at that time. The time for payment, however, also got delayed due to the delay in the delivery of the goods. The rate of foreign exchange fluctuated in the meantime. The loss caused thereby was on account of the delay for which Soconord was responsible.(B) In this case, the Umpire came to the conclusion that the loss on account of foreign exchange fluctuation was maintainable. In arriving at this conclusion, he held that in international commercial transactions between an Indian purchaser and a foreign supplier, it would be common knowledge that loss due to foreign exchange fluctuation can arise. That is a reasonable inference. The learned Umpire was entitled to draw that inference. It would be absurd to suggest that evidence is required to prove that parties are aware that the rate between different currencies fluctuates on a regular, indeed daily basis. Judicial notice of this fact is justified. If judicial notice of such a fact is impermissible, it is difficult to imagine a case where it would be permissible.(C) The contract between the parties is an international commercial transaction. The presumption would therefore, apply in this case. The learned Umpire also construed the terms of the contract in arriving at this conclusion. The portion of the price payable to Soconords Indian agent pegged the payment to the exchange rate prevailing on 21st March 1992. Whether it was at the instance of the agent or not, the payment to the agent was protected against any foreign exchange fluctuation. The provision for payment to Soconord itself was however, not pegged at the exchange rate fixed on 21st March 1992 or on any other date. The Umpire considered the effect of these terms and came to the conclusion that the aspect of foreign exchange fluctuation was present to the minds of parties when the contract was made and that the foreign exchange rate fluctuation was treated as relevant. The Umpire further concluded on the basis of these terms that the parties had agreed that the foreign exchange rate fluctuation would be taken into account while making payment of the price to Soconord. This is certainly a reasonable inference. It is a possible view with which no interference is warranted in a proceeding to challenge an award. It is evident, therefore, that not merely on the basis of common knowledge in the trade but also from the terms and conditions of the contract, the parties were not only aware of the possibility of there being a foreign exchange fluctuation but were conscious of the same and considered the same to be a relevant factor.31. The second aspect in point for consideration (D) was whether the ONGC had correctly quantified the loss on account of foreign exchange rate fluctuation. The ONGC computed the loss on the basis of the difference between the quantum of Indian rupees that it would have required for purchasing the balance price in Belgian francs prevailing on 20th July 1992 i.e. the scheduled date of completion of delivery and the quantum of Indian rupees that was actually spent for purchasing the Belgian Francs on the three dates of actual payment viz., 28th August, 29th September and 23rd December 1992.32. The learned Umpire rightly rejected Soconords contention based on the fact that ONGC could have made payment for the Antwerp goods upon their shipment. ONGC could have but was not bound to. This is clear from clause 12 of the GCSC. The learned Umpire held that normally payment would be released on completion of delivery of the entire material on 20th July 1992 under the terms of contract. Further, Soconord had delayed the delivery of the goods. ONGC had in fact by a letter dated 7/10th August 1992 addressed to State Bank of India extended the validity of the letter of credit but on the condition that partial payment would be permissible only after full supply of material from the port at Antwerp and the part supply of the material from Italian port was shipped and invoiced and duly certified by ONGCs representative. The same indicated ONGCs intention not to release any payment till the entire quantity of the material was shipped, invoiced and certified by the representative of ONGC. In this view of the matter the award cannot be challenged on this ground.33. This brings us to the general points raised by Soconord, some of which the learned Judge has accepted and on the basis thereof remitted the matter.34. Mr.Malik contended that the claim for damages was barred as ONGC had while extending the time for delivery not reserved its right to claim damages. The learned Judge in his judgment dated 8th February 2002 had held that the Umpire had not taken into consideration the provisions of section 55 of the Contract Act ; the failure to do so amounted to excluding from consideration the relevant law, which in turn amounted to a breach of the rules of natural justice ; before recording a finding that ONGC was entitled to claim damages, the Umpire was bound to consider the provisions of section 55 of the Indian Contract Act and that section 55 of the Indian Contract Act stipulates conditions to be satisfied before a person can claim damages under section 73 of the Contract Act for breach of the contract. The learned Judge held that the Umpire had failed to take into consideration the provisions of section 55 although the non-compliance thereof was alleged by Soconord. The learned Judge observed that while Soconord claims that no notice under section 55 was given, ONGC submitted that the requisite notice was given. The learned Judge held that this dispute ought to be considered by the Umpire. In view of this finding, the learned Judge did not consider the other contentions and set aside the award and remitted the same for a de-novo consideration by the Umpire.35. The learned Judge wrongly came to the conclusion that the Umpire had not considered the evidence relating to the issuance of notice by ONGC reserving the right to claim damages. It is difficult to understand how the learned Judge could have made this observation in view of the specific findings and observations of the learned Umpire in the award. The learned Umpire observed as follows:-"It is undisputed that the respondents (i.e. ONGC) has accepted the goods after expiry of the scheduled date without prejudice to their rights including the right to levy Liquidated Damages and that the same were levied after giving notice (vide respondents fax dated 6.8.92 - Para BB and Fax dated 11.8.92 - Para EE)"(A) Paragraph BB of the fax dated 6th August 1992 reads as under:-"(BB) PLEASE NOTE THAT (I) TO (V) AT AA ABOVE IS WITHOUT PREJUDICE TO COMPANYS RIGHTS TO RECOVER LIQUIDATED DAMAGES AND OTHER DAMAGES FROM YOU. IN TERMS OF CLAUSES 13.9 AND 14 OF ANNEXURE A AND OTHER RELATED PROVISIONS OF SUBJECT SUPPLY CONTRACT ON ACCOUNT OF DELAYS IN DELIVERIES BY YOU ON THE VESSEL OF COAT/WRAP CONTRACTOR, BEYOND 20.7.92."(B) It is important to note the fax dated 11th August 1992 referred to in the award in some detail. ONGC referred to clauses 5.1 of the agreement which required the delivery by 20th July 1992 and stated that Soconord had failed to adhere to the delivery schedule. The fax then refers to Soconords message dated 31st July 1992 stating that the delivery will be completed only by 31st August 1992 and the shipment would reach Kandla, India by 30th September 1992. The fax however, stated that the performance bond was valid upto 90 days beyond 20th July 1992 and the bank guarantee towards liquidated damages bond was valid upto 180 days beyond 20th July 1992. The fax expressly required Soconord to extend the validity of both the guarantees by 14th August 1992 such that the performance bond remains valid upto 90 days beyond 30th September 1992 and liquidated damages bond remains valid upto 180 days beyond 30th September 1992 in terms of clause 15 of the GCSC. The ONGC had agreed to the extensions expressly without prejudice to its rights to recover damages/ liquidated damages and any other damages. The importance of paragraph EE of the fax dated 11th August 1992 now becomes evident. It reads as under :-"EE. PLEASE NOTE THAT THIS ISSUES WITHOUT PREJUDICE TO COMPANYS RIGHTS TO RECOVER LIQUIDATED DAMAGES AND ANY OTHER DAMAGES FROM YOU UNDER CLAUSE 13.9 AND 14.0 OF ANNEXURE A AND OTHER RELATED PROVISIONS OF SUBJECT SUPPLY CONTRACT (.)"As we have mentioned earlier the award specifically refers to the telex. The telex is crystal clear. We are unable to understand how the learned Judge could possibly have come to the conclusion that the Umpire had failed to take into consideration the provisions of section 55 of the Contract Act and whether or not the requisite notice had been given. Merely because section 55 was not specifically referred to in the award, it would make no difference. It would be absurd on our part to even think that the learned Umpire was unaware of the provisions of section 55 of the Contract Act merely because he failed to mention expressly in words and figures the provisions of section 55 of the Indian Contract Act. Neither Mr.Malik nor Mr.Singhania had any answer to this. They were unable to support the observations of the learned Judge in this regard. The judgment dated 8th February 2002 is in this regard, therefore, overruled.36. Faced with this, Mr.Malik submitted that the notice issued by ONGC did not specify either the nature or quantum of damages. The requirements of section 55, according to him, are therefore not met in any event.37. Mr.Malik fairly admitted that this point was not taken in the petition under section 30. The petitioner was therefore, not entitled to raise this point even before the learned single Judge. Much less is it entitled to raise the same in appeal. Mr.Ghogres reliance upon the judgment of the Division Bench of this Court in O.N.G.C. vs. Comex Services SA, 2003(5) Bom.C.R. 146 is well founded."5. At the outset we must mention that this contention was not raised nor argued before the learned Single Judge nor this contention was taken before the Umpire. The contention is not even raised in the memo of appeal. Since the appellant has not made necessary averments in the petition filed by them for setting aside the Award in our opinion the appellant should not be allowed to raise this point in this appeal for the first time especially as the question depends upon the facts which are conspicuous by their absence in the pleadings. It is well-settled that specific averments and grounds for setting aside the Award have to be set out in the pleadings to enable the Court to set aside the Award even though the Award may be a nullity as alleged in the instant case. An application for setting aside the Award under section 14 has to be made within thirty days of service of notice. Otherwise the Award cannot be set aside on any ground contemplated by section 30 of the Arbitration Act. The expression "otherwise invalid" appearing in Clause (c) of section 30 of the Act includes Awards that are nullities. In the instant case no fact has been stated in the petition to show that the Umpire has exceeded his jurisdiction in making the Award or in other words he travelled beyond the terms of the contract in awarding the compensation claimed by the respondent.""6. Mr. Zaiwalla, however, contended that the point regarding jurisdiction goes to the root of the matter and, therefore it is open for the appellant to raise this issue even in oral submission though he maintained that the point should be presumed to have been taken or raised in the petition in view of the averment that the Award is contrary to the terms of the contract. He sought to place reliance on the decisions of the Supreme Court in Kiran Singh and others vs. Chaman Paswan and others 1954 Indlaw SC 181) and Sushil Kumar Mehta vs. Gobind Ram Bohra (dead) through Heirs 1989 Indlaw SC 260). These decisions are not rendered under the Arbitration Act and we have serious doubt whether these decisions have any application to the petitions u/s. 14 of the Arbitration Act. In any event the issue of jurisdiction raised by the learned counsel is not a pure question of law and it is a mixed question of law and facts and it will totally unfair to allow the teamed counsel to raise this contention for the first time in oral submission when no such contention was raised either before the learned Single Judge or even in the memo of appeal. Mr. Advani, learned counsel for the respondent submitted and not without sufficient force that Cl. 27.0 of the contract prohibits consequential damages and not damages resulting directly and naturally from the breach of the contract. He submitted that the concept of consequential damages is different from general or ordinary damages."Mr.Maliksubmitted that this judgment must be read to mean that a party ought not to be taken by surprise and that if the petitioner puts the respondent to notice that he intends raising a particular point, the Court must allow it to do so. We are unable to agree. We are bound by the judgment. There is nothing in the judgment that supports this contention.38. Mr.Malik then submitted that the point had been taken in the pleadings before the Arbitral Tribunal and that it had even been dealt with by the learned single Judge. We will for the purpose of this judgment presume that to be so. Even assuming that the appellant is entitled to raise this issue, it would make no difference as we find the submission to be totally unfounded.39. Section 55 of the Indian Contract Act reads as under :-"55 Effect of failure to perform at fixed time, in contract in which time is essential - When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.Effect of such failure when time is not essential.- If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure.Effect of acceptance of performance at time other than that agreed upon.- If, in case of a contract voidable on account of the promisors failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of such acceptance he gives notice to the promisor of his intention to do so."40. Mr.Maliks submission proceeds on the erroneous basis that the notice under the last paragraph of section 55 requires either the nature or the quantum to be specified. It does not. The plain language of section 55 does not stipulate such a requirement. There is nothing that persuades us to read such a requirement in section 55. We are in fact of a view to the contrary. It is sufficient if, while extending time at the request of the party in breach, the other party merely reserves its right generally to claim damages on account of the delay.When time is extended the party extending the time at the request of the party in breach may well not be aware of the damages it is likely to suffer. At that point of time the party may be unaware of the consequences of the breach and the material aspects of such damages, including the extent and the nature of damages.41. Mr.Maliks submission, if accepted, would lead to several practical difficulties. The extension of time to perform results in the contract continuing. Mr. Maliks submission, if accepted would require the party extending the contract to spend considerable time, first assessing all aspects of damages that it is likely to incur, including the nature and quantum thereof, specifying the same in a notice and then extending the contract. The entire purpose of extension would be defeated. Further, implementation of the contract would be considerably delayed. Indeed, such a view may well result in the party refusing to extend the contract for fear of having omitted to mention and specify its rights. The Legislature obviously, therefore, did not consider it necessary to require the party extending the contract to specify the details regarding the damage that it reserved to itself to claim.42. Our view would not prejudice the party in breach in any manner. A notice extending time reserving the right to claim damages, would not entitle the party extending the time to claim damages, which it is otherwise not entitled to in law. The party in breach, therefore, cannot be prejudiced by the notice extending the time subject to the claim for damages not specifying the nature or the extent of damages.43. This brings us to another point. In the impugned judgment dated 14th January 2011, the learned Judge observed that the Umpire had held in para 17 of the award that the amount of unliquidated damages claimed was higher than the amount of liquidated damages stipulated in the contract. The learned Judge held that the Umpire had not considered the aspect of liquidated damages and had proceeded to calculate the amount of unliquidated damages and had awarded the same. Paragraph 17 of the award which was also set out by the learned Judge in the order dated 14th January 2011 reads as under:-"17. However, in my view, the aspect of correct computation of delay and consequent correct levying of liquidated damages becomes really academic in this case, inasmuch as, the respondents have proceeded to claim their loss due to delay and consequent breach of the contract on the part of the claimants to the tune of Rs.1,61,26,538/- being the loss suffered by them on account of foreign exchange fluctuation only and after adjusting the amount recovered by encashment of the bank guarantee against the said loss arising from foreign exchange fluctuation have counter-claimed the balance from the claimants in their pleadings."While referring to the judgment of the Supreme Court in the case of Sir Chunilal V. Mehta and Sons Ltd., Vs. Century Spinning and Manufacturing Co. Ltd., reported in A.I.R. 1962 S.C. 1314, the learned Judge held that once the amount of liquidated damages is mentioned nothing in excess can be awarded. It was further held that this aspect of the matter had not been considered by the Umpire. The learned Judge, therefore, remitted the matter back to the Umpire directing the learned Umpire to reconsider whether in view of the stipulations of the contract providing for liquidated damages, unliquidated damages can be awarded.44. Firstly, the amount claimed and the amount awarded are not in excess of the ceiling stipulated in the liquidated damages clauses. The finding of the learned Judge is therefore, factually incorrect.45. Further, considering the provisions of the contract, the question raised does not even arise. The Supreme Court has not held that once there is liquidated damages clause in respect of a particular claim, damages cannot be awarded although they arise on account of another claim albeit under the same contract. The parties can always agree to the liquidated damages clause only in respect of certain types of claims arising under a contract. Such clauses for liquidated damages, may or may not include all claims for damages arising under a contract. The ceiling stipulated in the liquidated damages clause will not apply to a claim for damages on account of a breach or conduct that falls outside ambit of the liquidated damages clause. For instance, a liquidated damages clause may stipulate a ceiling on account of delay in delivery. Such a clause would not prevent a party from claiming damages on account of the goods supplied under the contract being defective.46. Mr.Ghogres reliance upon the judgment of the Supreme Court reported in 2009 (10) S.C.C. 63 (Steel Authority of India Ltd. Vs. Gupta Brother Steel Tubes Ltd.) is well founded. In paragraphs 20 and 24, the Supreme Court held:-"20. The question that needs to be determined by us is whether the breaches alleged by the respondent are covered by the stipulations contained in clause 7.2. If the answer is in the affirmative, obviously compensation cannot be awarded beyond what is provided therein. On the other hand, if breaches are not covered by clause 7.2, cap provided therein with regard to liquidated damages will not be applicable at all."24. There is no impediment or we know of any obstacle for the parties to a contract to make provision of liquidated damages for specific breaches only leaving other types of breaches to be dealt with as unliquidated damages. We are not aware of any principle that once the provision of liquidated damages has been made in the contract, in the event of breach by one of the parties, such clause has to be read covering all types of breaches although parties may not have intended and provided for compensation in express terms for all types of breaches."The judgment is a complete answer on this point.47. Mr.Malik then contended that damages on account of the foreign exchange fluctuation are not included in clause 13.9.48. There are two answers to this contention. Firstly, it would follow then that the ceiling imposed by the liquidated damages clause applies only in respect of the damages referred to therein. This is in view of the fact that clause 13.9 does not exclude a claim for damages on any other ground. In fact clause 13.9 expressly provides that the damages are only in addition to damages leviable in terms of clause 14. Clause 14 in turn is wide enough to include a claim for damages on account of foreign exchange fluctuation. Clause 14 confers certain rights upon the ONGC in the event of Soconord failing to deliver the material within the period fixed for such delivery. Clause 14 however, expressly provides that those rights are "without prejudice to any other right or remedy available to it (i.e. ONGC) to recover damages for breach of the supply contract." Clause 14 entitled ONGC to levy liquidated damages without prejudice to any other right or remedy available to ONGC to recover damages for breach of the supply contract.49. Thus, once it is held that damages on account of foreign exchange fluctuation can be claimed, neither clause 13.9 nor clause 14 prevented ONGC from claiming the same in addition to the liquidated damages stipulated in clause 14.50. The impugned judgment in so far as it remits the award on this ground is, therefore, set aside.51. Mr.Malik submitted that in any event, ONGC was entitled to claim damages only from its agent M/s.PSL Pipe Coaters Pvt. Ltd. (hereinafter referred to as M/s.PSL) - Coating Contractor and not from Soconord. He relied upon the letters dated 22nd June 1992 and 10th July 1992 addressed by ONGC to M/s.PSL. The submission is not well founded.52. The learned Judge rightly held that the directions contained in the letters by ONGC were based on the promise made by Soconord that the goods would be available for loading on the due date and, therefore, in the event of M/s.PSL delaying the deployment of the vessel on the due date, they would be liable for damages. These letters therefore, put M/s.PSL to notice that it would be liable for delay in deploying the vessels if the goods were made available by Soconord on the due dates. In other words ONGC had by these letters informed M/s.PSL to deploy the vessels on the dates on which Soconord had stated that the material would be ready in Antwerp and in Italy viz., on 14th July 1992 and 19th July 1992. On the basis that Soconord would deliver the materials on the said dates, ONGC informed PSL that it would be liable for damages if it did not make available the vessel on those dates. The learned Judge, therefore, rightly came to the conclusion that M/s.PSLs liability obviously would be only in the event of goods being made available by the Soconord on the said dates. As the goods were not made available by Soconord on these dates, Soconord was held liable for damages. There was no question, in such circumstances, of M/s.PSL being held liable. It would amount to ONGC holding its own agent liable for damages on account of a breach committed by Soconord. The learned Judge, accordingly, rightly refused to set aside the award on the ground that these letters had not been considered by the Umpire. The judgment in this regard is upheld.53. Mr.Malik lastly submitted that the ONGCs claim is barred by limitation.54. This objection was not raised either in the arbitration proceedings or in the arbitration petition. In view of the judgment of the Division Bench of this Court in ONGC vs. Comex Services SA (supra), it is not open therefore, to Soconord to raise the same before us.55. Mr.Malik however, relied upon a judgment of a learned single Judge of this Court in Sealand Shipping and Export Pvt. Ltd. vs. Kinship Services (India) Pvt. Ltd. 2011 (5) Bom.C.R. 572 to contend that the point of limitation even if not taken in the arbitration petition, can be taken at the hearing of the petition to challenge the award. We express no views about the correctness of the judgment. In that case however, as noted by the learned Judge, a plea had at least been raised before the Arbitral Tribunal.56. It would be unfair to permit Soconord to raise this contention in the appeal for the first time. The question of limitation in this case is a mixed question of law and of fact. To permit Soconord to raise the contention in appeal would be unfair to ONGC, as it would be deprived the opportunity of meeting the case on facts. The plea of limitation is raised on the basis that ONGC calculated the foreign exchange rate as on 20th July, 1992 but filed the counter claim on 13th September, 1995.57. Even on merits this contention is not well founded. The date of conversion of the foreign exchange is not necessarily the starting point of limitation. The date of conversion does not itself give rise to a cause of action in favour of a party suffering by the breach. In the present case, the goods were admittedly delivered to ONGC only by 23rd September, 1992. The ONGC was not bound to file the proceedings on 20th July, 1992. It could have waited till the entire consignment was delivered before filing the claim. This is at least one interpretation of the contract especially of clause 12.1 thereof. The plea of limitation in any case is not an open and shut case in Soconords favour.

Decision reasoning: 1[ds]14. It is impossible to hold that the view taken by the Umpire is not a possible one. Indeed, it appears to be the correct view. The least that must be said is that the view taken by the Umpire was a possible one. It would, in any event, therefore, not be open to this Court to substitute its view, assuming it had another view, for the Umpires view. The learned single Judge has also come to the same conclusion in this regard.The learned Judge therefore, rightly held that the finding recorded by the Umpire that time was of the essence of the contract is a finding of fact arrived at after taking into consideration all relevant evidence and provisions of law, including the judgment of the Supreme Court in Hind Construction Contractors Vs. State of Maharashtra A.I.R. 1979 S.C. 729. The learned Judge rightly found that the finding recorded by the learned Umpire is a possible finding and, therefore, cannot be interfered with.15. The contention that the award ought to be set aside on the ground that the Umpire wrongly came to the conclusion that time was of the essence of the contract is, therefore, rejected.Soconord contended that even assuming that there was a delay on its part in arranging for the delivery of the material FOB at the ports, ONGC/ ONGCs coating contractor failed to perform their reciprocal promise of making the ship available before 20th July 1992 for effecting such delivery. Thus, without the ship being there, the FOB delivery at the two ports would be physically impossible. Soconord, therefore, claimed to have been discharged from performing its obligation in view of section 54 of the Indian Contract Act.The learned Umpire came to the conclusion that the delay in arrival of the ship at Antwerp on 6th August 1992 was due to the failure on the part of Soconord to give due intimation of slippage and, therefore, ONGC/ its Coating Contractor cannot be faulted for the delayed arrival of the ship at Antwerp. The learned Umpire came to this conclusion upon a detailed consideration of the rival contentions. The finding of fact which warrants no interference justifies the conclusion.18. The learned Umpire rightly accepted ONGCs contention that even assuming that there was an implied obligation on its part to make the ship available before 20th July 1992, the same did not constitute a reciprocal promise in view of clause 11 of the GCSC agreement. Clause 11 entitled ONGC to store the material at the suppliers stock yard/ warehouse at the delivery site. Thus, Soconords obligation to keep the goods ready for shipment on 20th July 1992 was not dependent upon the performance by ONGC of its obligation to make the ship available before 20th July 1992. Soconord was not concerned whether ONGC stored the material or shipped it. The question of a reciprocal obligation really did not arise.19.Mr.Malik, the learned Counsel appearing on behalf of the petitioner contended that under an FOB contract, the ship must also be kept ready.We will assume that to be so. However, in view of the finding of the learned Umpire, based on clause 11 of the GCSC, it would make no difference. Clause 11 contemplated a situation where the ship may not be available and provided that in such a situation, the ONGC would be entitled to have the goods stored at the stock yard/ warehouse. The criticism against the learned Umpire on the ground that he had failed to take into consideration the legal incidence of an FOB contract is, therefore, uncalled for.20. The learned Umpire did not stop there. He answered the question under consideration in favour of ONGC, also in view of the clause 13.8 of the GCSC, the Minutes of the kick off meeting held on 30th March 1992 and the evidence. Based on the same, the Umpire justifiably came to the conclusion that Soconord had failed to give ONGC intimation of slippage as required by clause 13.8. The notice of slippage was important for it takes time for a party to arrange a ship. The minutes of the kick off meeting required Soconord to give ONGC the production schedule within three weeks. Soconord however, informed ONGC that the material would be ready at Antwerp only by 14th July 1992 and in Italy by 20th July 1992. After analysing the correspondence and the evidence, the learned Umpire found this information to be incorrect. Based on the evidence the learned Umpire came to the conclusion that the manufacturing activities were lagging far behind and ultimately Soconord by its letter dated 20th July 1992 admitted that it was not in a position to deliver the material by 20th July 1992 and that the material would be ready for loading at both the ports only on 30th July 1992.21. It is evident on a plain reading of the award that the learned Umpires conclusion was arrived at after taking every relevant aspect into consideration. The provisions of the contract were construed and analysed, the evidence and correspondence was also considered. It is not open for this court tothe evidence. The view taken by the Umpire is not only a possible one but in fact appears to be the correct one.The conclusion regarding Point "B" was, therefore, rightly in favour of the ONGC.The ONGC computed the delay to be 19 days i.e. three weeks from 5th July 1992 to 24th July 1992. 5th July 1992 was the date on which ONGC contended that the goods ought to have been kept ready at Antwerp to meet the contractual completion date viz., 20th July 1992. According to ONGC 24th July 1992 was the date of readiness of goods as certified in the Release Note issued by EILONGC Inspectors. Accordingly, the liquidated damages were levied by ONGC in accordance with clause 14(a)(1) of the GCSC. Soconord on the other hand contended that the scheduled date for completion of delivery was 20th July 1992. ONGC, therefore, was not entitled to consider 5th July 1992 to be the date of commencement, as that would constituterewriting the contract.The contract stipulates 20th July 1992 to be the date for delivery.23. The learned Umpire rejected Soconords contention holding that ONGC had not artificially carried the date of keeping the goods ready backward to 5th July 1992 and that the same did not amount torewriting the contract.It is difficult to interfere with the findings of the learned Umpire.24. It is however, not necessary to consider this aspect any further. As noted in the award, the issue is academic as the ONGC had raised the claim for compensation due to delay on the part of Soconord on the basis of the loss suffered by it on account of foreign exchange fluctuation only. The issue, therefore, really is whether the claim for loss on account of fluctuation in the foreign exchange rate is maintainable or not25. This, therefore, brings us to last point for consideration determined by the learned Umpire.Two aspects arose for the consideration of the learned Umpire. The first was, whether the loss arising out of foreign exchange fluctuation can be claimed under section 73 of the Indian Contract Act and the second was whether the computation of the loss by ONGC was correct There are two further general aspects viz., the points on which the learned Judge remitted the award which we will deal with subsequently.27. As regards the first aspect viz., whether the loss on account of foreign exchange rate fluctuation can be claimed under section 73 of the Indian Contract Act, Soconord contended that the same cannot be considered to be a direct loss that had naturally arisen in the usual course of things from the breach on its part or a loss which the parties knew, when they made the contract, to be likely to result from its breach. The claim, therefore, Soconord contended is for remote damages, which cannot be granted under section 73 of the Indian Contract Act.28. The learned Umpire firstly held that there is no absolute rule that loss resulting fromrevaluation of currencies are always too remote in law to berecovered. The learned Umpire rightly held that Section 73 does not bar a claim for compensation for loss or damages caused on account of the foreign exchange fluctuation. In other words, the loss on account of the foreign exchange fluctuation is not excluded from the ambit of section 73 of the Indian Contract Act. The plain language of Section 73 does not support a view to the contrary. There is no reason or justification to read such a limitation into the section either. A party who suffers a loss on account of the fluctuation in the rate of exchange due to the breach of a contract is entitled to claim the same under section 73 if he establishes that the same naturally arose in the usual course of things from such breach and/or which the parties knew, when they made the contract that loss to be likely to result from the breach of it. Whether these ingredients are fulfilled or not would depend upon the facts of each case. In Aruna Mills Limited vs. Dhanrajmal, (1968) 2 WLR 101, the Court rejected the contention that there is a special rule that losses resulting fromrevaluation of currencies are always too remote in law to berecoverable. The learned Judge held that there was no such rule. We are entirely in agreement with this view. Our attention has not been invited to any authority to the contrary. We see no reason on principle to read such a limitation into Section 73. We hasten to add that even if there is authority to the contrary, absent a binding authority, it would make no difference. The Umpire was entitled to prefer one view to another. An award cannot be set aside even if the Court prefers the other view. The judgment was referred to in the award. The learned Umpire rightly held such a claim to fall within the ambit of section 73.29. The learned Umpire rejected Soconords contention based on clause 4.1 of the main contract and clauses 12.1 and 12.3 of the GCSC under which the price was payable by ONGC to Soconord in foreign exchange (Belgian Francs). It is not possible to interfere with the decision that these clauses by themselves do not mean that the fluctuation in foreign exchange rate is irrelevant and that whether the loss arising on account thereof would be covered or not would depend upon several factors. The question to be determined upon an analysis of these factors is, whether such loss is a direct loss that had naturally arisen in usual course of things from the breach on the part of Soconord or whether it was a loss which the parties knew when they entered into the contract, to be likely to result on its breach. The learned Umpire, therefore, posed the correct question and proceeded to answer it.30. The learned Umpire answered this question in favour of ONGC also upon a consideration of the terms of the agreement and the facts of the case including the correspondence between the parties. The factors that persuaded the learned Umpire to hold that the claim falls within the ambit of section 73 are as followsThat there was a delay in delivery of goods was admitted. The finding of the learned Umpire is that Soconord was responsible for the same. Had the goods been delivered by the scheduled date, the payment could have been made at that time. The time for payment, however, also got delayed due to the delay in the delivery of the goods. The rate of foreign exchange fluctuated in the meantime. The loss caused thereby was on account of the delay for which Soconord was responsible.(B) In this case, the Umpire came to the conclusion that the loss on account of foreign exchange fluctuation was maintainable. In arriving at this conclusion, he held that in international commercial transactions between an Indian purchaser and a foreign supplier, it would be common knowledge that loss due to foreign exchange fluctuation can arise. That is a reasonable inference. The learned Umpire was entitled to draw that inference. It would be absurd to suggest that evidence is required to prove that parties are aware that the rate between different currencies fluctuates on a regular, indeed daily basis. Judicial notice of this fact is justified. If judicial notice of such a fact is impermissible, it is difficult to imagine a case where it would be permissible.(C) The contract between the parties is an international commercial transaction. The presumption would therefore, apply in this case. The learned Umpire also construed the terms of the contract in arriving at this conclusion. The portion of the price payable to Soconords Indian agent pegged the payment to the exchange rate prevailing on 21st March 1992. Whether it was at the instance of the agent or not, the payment to the agent was protected against any foreign exchange fluctuation. The provision for payment to Soconord itself was however, not pegged at the exchange rate fixed on 21st March 1992 or on any other date. The Umpire considered the effect of these terms and came to the conclusion that the aspect of foreign exchange fluctuation was present to the minds of parties when the contract was made and that the foreign exchange rate fluctuation was treated as relevant. The Umpire further concluded on the basis of these terms that the parties had agreed that the foreign exchange rate fluctuation would be taken into account while making payment of the price to Soconord. This is certainly a reasonable inference. It is a possible view with which no interference is warranted in a proceeding to challenge an award. It is evident, therefore, that not merely on the basis of common knowledge in the trade but also from the terms and conditions of the contract, the parties were not only aware of the possibility of there being a foreign exchange fluctuation but were conscious of the same and considered the same to be a relevant factor.The learned Umpire rightly rejected Soconords contention based on the fact that ONGC could have made payment for the Antwerp goods upon their shipment. ONGC could have but was not bound to. This is clear from clause 12 of the GCSC. The learned Umpire held that normally payment would be released on completion of delivery of the entire material on 20th July 1992 under the terms of contract. Further, Soconord had delayed the delivery of the goods. ONGC had in fact by a letter dated 7/10th August 1992 addressed to State Bank of India extended the validity of the letter of credit but on the condition that partial payment would be permissible only after full supply of material from the port at Antwerp and the part supply of the material from Italian port was shipped and invoiced and duly certified by ONGCs representative. The same indicated ONGCs intention not to release any payment till the entire quantity of the material was shipped, invoiced and certified by the representative of ONGC. In this view of the matter the award cannot be challenged on this ground.k contended that the claim for damages was barred as ONGC had while extending the time for delivery not reserved its right to claimdamages. The learned Judge in his judgment dated 8th February 2002 had held that the Umpire had not taken into consideration the provisions of section 55 of the Contract Act ; the failure to do so amounted to excluding from consideration the relevant law, which in turn amounted to a breach of the rules of natural justice ; before recording a finding that ONGC was entitled to claim damages, the Umpire was bound to consider the provisions of section 55 of the Indian Contract Act and that section 55 of the Indian Contract Act stipulates conditions to be satisfied before a person can claim damages under section 73 of the Contract Act for breach of the contract. The learned Judge held that the Umpire had failed to take into consideration the provisions of section 55 although thethereof was alleged by Soconord. The learned Judge observed that while Soconord claims that no notice under section 55 was given, ONGC submitted that the requisite notice was given. The learned Judge held that this dispute ought to be considered by the Umpire. In view of this finding, the learned Judge did not consider the other contentions and set aside the award and remitted the same for aconsideration by the Umpire.35. The learned Judge wrongly came to the conclusion that the Umpire had not considered the evidence relating to the issuance of notice by ONGC reserving the right to claim damages. It is difficult to understand how the learned Judge could have made this observation in view of the specific findings and observations of the learned Umpire in thewe have mentioned earlier the award specifically refers to the telex. The telex is crystal clear. We are unable to understand how the learned Judge could possibly have come to the conclusion that the Umpire had failed to take into consideration the provisions of section 55 of the Contract Act and whether or not the requisite notice had been given. Merely because section 55 was not specifically referred to in the award, it would make no difference. It would be absurd on our part to even think that the learned Umpire was unaware of the provisions of section 55 of the Contract Act merely because he failed to mention expressly in words and figures the provisions of section 55 of the Indian Contract Act. Neither Mr.Malik nor Mr.Singhania had any answer to this. They were unable to support the observations of the learned Judge in this regard. The judgment dated 8th February 2002 is in this regard, therefore, overruled.Mr.Malik fairly admitted that this point was not taken in the petition under section 30. The petitioner was therefore, not entitled to raise this point even before the learned single Judge. Much less is it entitled to raise the same in appeal. Mr.Ghogres reliance upon the judgment of the Division Bench of this Court in O.N.G.C. vs. Comex Services SA, 2003(5) Bom.C.R. 146 is wellthat this judgment must be read to mean that a party ought not to be taken by surprise and that if the petitioner puts the respondent to notice that he intends raising a particular point, the Court must allow it to do so.We are unable to agree. We are bound by the judgment. There is nothing in the judgment that supports this contention.38.Mr.Malik then submitted that the point had been taken in the pleadings before the Arbitral Tribunal and that it had even been dealt with by the learned single Judge.We will for the purpose of this judgment presume that to be so. Even assuming that the appellant is entitled to raise this issue, it would make no difference as we find the submission to be totally unfounded.Mr.Maliks submission proceeds on the erroneous basis that the notice under the last paragraph of section 55 requires either the nature or the quantum to be specified.It does not. The plain language of section 55 does not stipulate such a requirement. There is nothing that persuades us to read such a requirement in section 55. We are in fact of a view to the contrary. It is sufficient if, while extending time at the request of the party in breach, the other party merely reserves its right generally to claim damages on account of the delay.Mr.Maliks submission, if accepted, would lead to several practical difficulties. The extension of time to perform results in the contract continuing. Mr. Maliks submission, if accepted would require the party extending the contract to spend considerable time, first assessing all aspects of damages that it is likely to incur, including the nature and quantum thereof, specifying the same in a notice and then extending the contract. The entire purpose of extension would be defeated. Further, implementation of the contract would be considerably delayed. Indeed, such a view may well result in the party refusing to extend the contract for fear of having omitted to mention and specify its rights. The Legislature obviously, therefore, did not consider it necessary to require the party extending the contract to specify the details regarding the damage that it reserved to itself to claim.42. Our view would not prejudice the party in breach in any manner. A notice extending time reserving the right to claim damages, would not entitle the party extending the time to claim damages, which it is otherwise not entitled to in law. The party in breach, therefore, cannot be prejudiced by the notice extending the time subject to the claim for damages not specifying the nature or the extent of damages.43. This brings us to another point. In the impugned judgment dated 14th January 2011, the learned Judge observed that the Umpire had held in para 17 of the award that the amount of unliquidated damages claimed was higher than the amount of liquidated damages stipulated in the contract. The learned Judge held that the Umpire had not considered the aspect of liquidated damages and had proceeded to calculate the amount of unliquidated damages and had awarded thereferring to the judgment of the Supreme Court in the case of Sir Chunilal V. Mehta and Sons Ltd., Vs. Century Spinning and Manufacturing Co. Ltd., reported in A.I.R. 1962 S.C. 1314, the learned Judge held that once the amount of liquidated damages is mentioned nothing in excess can be awarded. It was further held that this aspect of the matter had not been considered by the Umpire. The learned Judge, therefore, remitted the matter back to the Umpire directing the learned Umpire to reconsider whether in view of the stipulations of the contract providing for liquidated damages, unliquidated damages can be awarded.44. Firstly, the amount claimed and the amount awarded are not in excess of the ceiling stipulated in the liquidated damages clauses. The finding of the learned Judge is therefore, factually incorrect.45. Further, considering the provisions of the contract, the question raised does not even arise. The Supreme Court has not held that once there is liquidated damages clause in respect of a particular claim, damages cannot be awarded although they arise on account of another claim albeit under the same contract. The parties can always agree to the liquidated damages clause only in respect of certain types of claims arising under a contract. Such clauses for liquidated damages, may or may not include all claims for damages arising under a contract. The ceiling stipulated in the liquidated damages clause will not apply to a claim for damages on account of a breach or conduct that falls outside ambit of the liquidated damages clause. For instance, a liquidated damages clause may stipulate a ceiling on account of delay in delivery. Such a clause would not prevent a party from claiming damages on account of the goods supplied under the contract being defective.46. Mr.Ghogres reliance upon the judgment of the Supreme Court reported in 2009 (10) S.C.C. 63 (Steel Authority of India Ltd. Vs. Gupta Brother Steel Tubes Ltd.) is well founded.There are two answers to this contention. Firstly, it would follow then that the ceiling imposed by the liquidated damages clause applies only in respect of the damages referred to therein. This is in view of the fact that clause 13.9 does not exclude a claim for damages on any other ground. In fact clause 13.9 expressly provides that the damages are only in addition to damages leviable in terms of clause 14. Clause 14 in turn is wide enough to include a claim for damages on account of foreign exchange fluctuation. Clause 14 confers certain rights upon the ONGC in the event of Soconord failing to deliver the material within the period fixed for such delivery. Clause 14 however, expressly provides that those rights are "without prejudice to any other right or remedy available to it (i.e. ONGC) to recover damages for breach of the supply contract." Clause 14 entitled ONGC to levy liquidated damages without prejudice to any other right or remedy available to ONGC to recover damages for breach of the supply contract.49. Thus, once it is held that damages on account of foreign exchange fluctuation can be claimed, neither clause 13.9 nor clause 14 prevented ONGC from claiming the same in addition to the liquidated damages stipulated in clause 14.50. The impugned judgment in so far as it remits the award on this ground is, therefore, set aside.51. Mr.Malik submitted that in any event, ONGC was entitled to claim damages only from its agent M/s.PSL Pipe Coaters Pvt. Ltd. (hereinafter referred to as M/s.PSL)Coating Contractor and not from Soconord. He relied upon the letters dated 22nd June 1992 and 10th July 1992 addressed by ONGC to M/s.PSL. The submission is not well founded.52. The learned Judge rightly held that the directions contained in the letters by ONGC were based on the promise made by Soconord that the goods would be available for loading on the due date and, therefore, in the event of M/s.PSL delaying the deployment of the vessel on the due date, they would be liable for damages. These letters therefore, put M/s.PSL to notice that it would be liable for delay in deploying the vessels if the goods were made available by Soconord on the due dates. In other words ONGC had by these letters informed M/s.PSL to deploy the vessels on the dates on which Soconord had stated that the material would be ready in Antwerp and in Italy viz., on 14th July 1992 and 19th July 1992. On the basis that Soconord would deliver the materials on the said dates, ONGC informed PSL that it would be liable for damages if it did not make available the vessel on those dates. The learned Judge, therefore, rightly came to the conclusion that M/s.PSLs liability obviously would be only in the event of goods being made available by the Soconord on the said dates. As the goods were not made available by Soconord on these dates, Soconord was held liable for damages. There was no question, in such circumstances, of M/s.PSL being held liable. It would amount to ONGC holding its own agent liable for damages on account of a breach committed by Soconord. The learned Judge, accordingly, rightly refused to set aside the award on the ground that these letters had not been considered by the Umpire. The judgment in this regard is upheld.53. Mr.Malik lastly submitted that the ONGCs claim is barred by limitation.54. This objection was not raised either in the arbitration proceedings or in the arbitration petition. In view of the judgment of the Division Bench of this Court in ONGC vs. Comex Services SA (supra), it is not open therefore, to Soconord to raise the same before us.55. Mr.Malik however, relied upon a judgment of a learned single Judge of this Court in Sealand Shipping and Export Pvt. Ltd. vs. Kinship Services (India) Pvt. Ltd. 2011 (5) Bom.C.R. 572 to contend that the point of limitation even if not taken in the arbitration petition, can be taken at the hearing of the petition to challenge the award. We express no views about the correctness of the judgment. In that case however, as noted by the learned Judge, a plea had at least been raised before the Arbitral Tribunal.56. It would be unfair to permit Soconord to raise this contention in the appeal for the first time. The question of limitation in this case is a mixed question of law and of fact. To permit Soconord to raise the contention in appeal would be unfair to ONGC, as it would be deprived the opportunity of meeting the case on facts. The plea of limitation is raised on the basis that ONGC calculated the foreign exchange rate as on 20th July, 1992 but filed the counter claim on 13th September, 1995.57. Even on merits this contention is not well founded. The date of conversion of the foreign exchange is not necessarily the starting point of limitation. The date of conversion does not itself give rise to a cause of action in favour of a party suffering by the breach. In the present case, the goods were admittedly delivered to ONGC only by 23rd September, 1992. The ONGC was not bound to file the proceedings on 20th July, 1992. It could have waited till the entire consignment was delivered before filing the claim. This is at least one interpretation of the contract especially of clause 12.1 thereof. The plea of limitation in any case is not an open and shut case in Soconords favour.