Trimex International Fze Ltd.Dubai vs Vedanta Aluminium Limited,India

16.11.2007 reserving the right to claim for damages. On 18.11.2007, the petitioner formally informed the ship owners about the cancellation of the carriage. On 19.11.2007, the ship owners made a claim of 1 million US$ towards commercial settlement and on 30.11.2007, the petitioner informed the respondent to pay a sum of 1 million US$ towards compensation for loss on account of the estimated loss for five shipments and 0.8 million towards compensation for loss of profit and other costs and expenses for cancellation of the order. The respondent rejected the claim of the petitioner on damages. On compensation not being paid, the ship owners served a notice on the petitioner. After negotiations, a settlement was arrived at between the ship owners and the petitioner to pay a lump-sum of 600,000 US$ to be paid in two installments. The petitioner paid the amount in two 4 installments on 27.02.2008 and 31.03.2008. On 01.09.2008, the petitioner served a notice of claim-cum- arbitration on the respondent to make the payment immediately otherwise treat the notice for referring the dispute to arbitration as per Clause 29 of the Purchase Order and informed about nominating Mr. Shiv Shankar Bhatt, a retired Judge of the Karnataka High Court as the arbitrator from their side and requested the respondent to nominate their own arbitrator within 30 days. On 14.11.2008, the respondent rejected the arbitration notice stating that there was no concluded contract between the parties. Hence, the petitioner filed the present petition for appointment of an Arbitrator.

4) According to the respondent, as seen from the counter affidavit, there was no concluded contract between the parties and the parties are still not ad idem in respect of various essential features of the transaction. Further the draft contract received from the petitioner was yet to be accepted/confirmed by the respondent. The 5 commercial offer provided two options of shipment lot, namely, 2 shipments and 5 shipments. The only understanding that had been arrived at between the parties as a result of the correspondence subsequent to the receipt of the commercial offer from the petitioner was that the transaction would be in respect of 5 shipments. All other terms and conditions pivotal and essential to the transaction were under negotiation as is evident from the correspondence between the parties. The product specifications, price, inclusions in the contract price, delivery point, insurance, commencement and conclusion dates of the contract, transfer of title, quality check and demurrage are all factors that are at large and remain undecided. In such a scenario, where the parties were not in one mind with respect to any aspect of the transaction, the contention of the petitioner that there existed a binding contract between the parties as also a binding arbitration agreement is wholly erroneous and misleading. Apart from the commercial offer dated 15.10.2007, subject 6 matter of the instant proceedings, the petitioner had sent another commercial offer on 05.09.2007 bearing No. TID/F/194/2007 also for 45000 MTs of Bauxite (of Australian origin) which offer had been followed up with a purchase order executed by and between the parties. While the commercial offer, subject-matter of the instant petition, was being negotiated and the terms discussed, a shipment of Bauxite covered under the previous commercial offer dated 05.09.2007 was received by the respondent at its plant on or around 12.11.2007. The product was being analysed to determine its utility value for the respondent at its plant. On account of such analysis being conducted, the respondent on 12.11.2007 wrote to the petitioner bringing the factum of the ongoing analysis to its notice and instructed the petitioner to defer the new shipments till the analysis was completed and the results obtained with respect to the utility value of the said product. Despite being put on notice by the respondent for deferment of shipment, the petitioner 7 permitted the nomination of the Vessel to take place on 13.11.2007. Apart from there being no valid and binding contract/arbitration agreement between the parties, it is the stand of the respondent that in this petition, the petitioner seeks to commence proceedings to fasten a liability on to the respondent for which the respondent was not responsible in any manner whatsoever having informed the petitioner prior to the occurrence of the event giving rise to the alleged liability.

Hence we request you to revert urgently before closing today as this area is all closed from Thursday Best regards Swaminathan Low Monohydrate Grade Bauxite Typical Analysis Parameter Range Base spec Bonus/Penalty Rejection Trihydrate 42-46% 45% Min. Bonus US $0.50 per Below alumina tonne per percentage 41% (THA) point fraction pro-rate above 45% Penalty US$ 0.50 per tonne per percentage point fraction pro-rate below 45% Penalty US $1.00 per tonne per percentage point fraction pro-rate below 42%.

2. VAL will confirm on the feasibility of discharging the cargo at Kakinada port and accordingly TRIMEX will discuss with the Vessel Owners.

Sent: Tuesday, October 30, 2007 12:23 PM To: `Swayam Mishra'; [email protected] Cc: SR Subramanyam; Shanika; [email protected] Subject: FW:BULKHANDING TBN/TRIMEX-WEIPA/VIJZAG Dear Swayam, With reference to our discussions, please find the fixture terms for the new contract. We are getting the draft CP for this COA and hence we shall send that shortly instead of the base CP as it will contain all amendments for this business. We are expecting this any time today from Owner.

Meanwhile, as already mentioned let us proceed with contract and L/c as we are left with bare minimum time before Owner will nominate a vessel for the first laycan starting 15-30 Nov anytime from tomorrow. We have to establish our L/c on RTA and this is already overdue. We should have too much pressure at last minute and could result in demurrage at loadport as holidays are on from tomorrow in Middle East and India.

Dear Sir, With reference to the above offer and subsequent discussions we had with you, we are pleased to place this Purchase Order on you for supply of 225000 +/- 10% MT Low Monohydrate Grade Bauxite as per the following terms and conditions........... .....Definition of Term

29. Arbitration The Parties hereto shall endeavour to settle all disputes and differences relating to and/or arising out of the Contract amicably. In the event of the Parties failing to resolve any dispute amicably the same shall be referred to Arbitration in accordance with the Arbitration and Conciliation Act 1996, as is prevalent in India. Each Party shall be entitled to nominate an Arbitrator and the two Arbitrators so nominated shall jointly nominate a third presiding Arbitrator. The Arbitrators shall give a reasoned award.

The place of arbitration shall be Mumbai, Maharashtra in accordance with Indian Law and the language of the arbitration shall be English. The Parties further agree that any arbitration award shall be final and binding upon both the Parties.

The Parties hereto agree that the Seller shall be obliged to carry out its obligations under the Contract even in the event a dispute is referred to Arbitration.

30. Governing Law This Contract shall be construed in accordance with and governed by the laws of Indian and in the event of any litigation the Courts in Mumbai shall have exclusive jurisdiction. 33 This order is being issued in duplicate. You are requested to send the duplicate copy duly signed as a token of acceptance of the terms and conditions.

AC) Annexure P-12 From: Rajesh Mohata [mail to: [email protected]] Sent: Monday, November 12, 2007 2:18 PM To: Swaminathan G; Shanika; SR Subramanyam Cc: Venkateshwar Rao; Swayam Mishra; Umesh Mehta Subject: Trimex International Dear Mr. Swaminathan, We have recently received bauxite from first import congisnment at Plant. Our operation team is in process to find out recovery and value addition for using this bauxite in actual plant condition. This may take some time. In view of this we may have to hold procurement for the next consignment.

We request you to put on hold the next consignment till further advise.

First, we have to go them urgently and ask them to defer the first vessel by 15 days until 1st December as proposed by you on phone. In that case there will be two vessels in December subject to RTA agreement. There might be claims from them. But before we talk to them we need VAL's confirmation that any claims from Owners for the delay or cancellation of any or all shipment(s) under this contract will be fully guaranteed to us and that VAL will pay the amount without demur.

Matter urgent as we have to act fast before Owners nominate any vessel. As far as RTA is concerned we shall take-up and hope they will agree to a revised schedule as they are fully booked for December and thereafter this will have also to be agreed with Owners.

Please respond by return mail for us to talk to RTA/Owners. We shall try and do our best but before that we need VAL's clear confirmation on above.

21) Accordingly, Hon'ble Mr. Justice B.N. Srikrishna, former Judge of this Court is appointed as an Arbitrator to 51 resolve the dispute between the parties. It is made clear that this Court has not expressed anything on the merits of the claim made by both parties and whatever conclusion arrived at is confined to appointment of an Arbitrator. It is further made clear that it is for the Arbitrator to decide the issue on merits after affording adequate opportunity to both parties. In terms of the Arbitration clause, the place of Arbitration is fixed at Mumbai. The Arbitrator is at liberty to fix his remuneration and other expenses which shall be borne equally by both the parties.

22) Arbitration petition is allowed on the above terms. No costs.

..........................................J. (P. SATHASIVAM) NEW DELHI;

JANUARY 22, 2010.