Supreme Court of India
TRIMEX INTERNATIONAL FZE LTD. DUBAIversusVEDANTA ALUMINIUM LIMITED, INDIA
- Citation
- 2010 INSC 57
- Decided
- 22 January 2010
- Disposal
- Case Allowed
- Bench
- P SATHASIVAM
Holding
A contract was concluded and the arbitration clause is valid; the arbitration petition is allowed and an arbitrator is appointed.
Summary
Trimex International FZE Ltd. sent a commercial offer by email on 15 October 2007 for the supply of bauxite, containing an arbitration clause. Vedanta Aluminium Ltd. accepted the offer on 16 October 2007, confirming five shipments. A dispute later arose and Vedanta denied the existence of a concluded contract and the enforceability of the arbitration clause, arguing that no formal signed agreement existed. The Supreme Court held that the email exchange satisfied the requirements of Sections 4 and 7 of the Indian Contract Act, establishing a valid contract and an enforceable arbitration agreement that could be inferred from the correspondence. Consequently, the Court allowed the arbitration petition and appointed former Judge B.N. Srikrishna as arbitrator, without deciding the merits of the underlying claim.
Issues considered
- The existence of a concluded contract despite the absence of a formally signed document.
- Whether an arbitration clause can be inferred and enforced from email exchanges and other electronic communications.
- Whether the acceptance communicated by Vedanta satisfied Sections 4 and 7 of the Indian Contract Act.
- Whether the arbitration petition under Section 11(6) of the Arbitration & Conciliation Act, 1996, is maintainable.
Legislation cited
- Arbitration & Conciliation Act, 1996s. 11(6)
- Indian Contract Act, 1872s. 4, s. 7
Subjects
contract formationemail contractarbitration clauseArbitration & Conciliation ActIndian Contract Actoffer and acceptancearbitration petitionSupreme Court of India
Judgment
[2010] 1 S.C.R. 820
A TRIMEX INTERNATIONAL FZE LTD. DUBAI
v.
VEDANTA ALUMINIUM LIMITED, INDIA
Arbitration Petition No. 10 of 2009
JANUARY 22, 2010
B
[P. SATHASIVAM, J.)
Contract Act, 1872: ss. 4, 7 - Concluded contract
containing arbitration clause - If respondent accepts the offer
C of petitioner following a very strict time schedule, he cannot
escape from the obligations that flowed from such an action
- Arbitration clause can be .inferred from various documents
duly approved and signed by the parties in the form of
exchange of e-mails, letter, telex, telegrams and other means
D of tele-communication even in the absence of signed
agreement - If no inference can be drawn from the facts that
the parties intended to be bound only when a formal
agreement had been executed, the validity of the agreement
would not be affected by its lack of formality - On facts, the
E Commercial Offer carried no clause making the conclusion
of the contra.ct incumbent upon the Purchase Order -
Therefore, the moment commercial offer was accepted by the
respondent, the contract came into existence - Since the
contract contained arbitration clause, petitioner made out case
F for appointment of arbitrator - Arbitration.
Petitioner's case was that on 15.10.2007, it submitted
a commercial offer through e.-mail for supply of Bauxite
to the respondent. After exchange of several e-mails,
respondent conveyed acceptance of offer through e-mail
G on 16.10.2007 confirming the supply of 5 shipments of
Bauxite. Dispute arose and petitioner served arbitration
notice on the respondent. Respondent rejected the
arDitration notice stating that there was no concluded
contract between them. Petitioner filed arbitration petition
H 820
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 821
ALUMINIUM LTD, INDIA
for appointment of arbitrator. A
Allowing the arbitration petition, the Court
HELD: 1.1. On 15.10.2007 at 4.26 p.m. the petitioner
submitted commercial offer wherein clause 6 contained
arbitration clause i.e. "this contract is governed by Indian B
law and arbitration in Mumbai courts". At 5.34 p.m. though
respondents offered their comments, no comments were
made in respect oL'arbitration clause'. At 6.04 p.m. the
petitioner sent a reply to the comments made by the
respondent. Again on 16.10.2007, at 11.28 a.m. though C
respondents suggested certain additional information on
the offer note, again no suggestion was made with regard
to arbitration clause. At 11.48 a.m. the petitioner sent an
e-mail extending validity of the offer by another one hour.
At 01.38 p.m., the respond.en( made certain suggestions D
on the demurrage asking the petitioner to either reduce
the freight rate or the demurrage rate. On the same day
at 02.01 p.m., the petitioner sent a reply on the demurrage
stating that the rates cannot be reduced any further. At
02.41 p.m., the respondent informed the petitioner that E
they would like to have a termination clause after two
shipments. At 03.06 p.m., the petitioner sent a mail stating
that "no owner will accept this condition. Respondent
may accept two or five quickly". At 03.06 p.m. the
respondent accepted the offer for five shipments. In
F
response to the same at 03.49 p.m., the petitioner thanked
the respondent for acceptance and conveyed that it was
"just in time" to go to the ship owners. At 03.57 p.m. the
petitioner finalized the contract with the bauxite supplier
in Australia. Apart from the minute to minute G
correspondences exchanged between the parties
regarding offer and acceptance, the offer of 15.10.2007
contained all essential ingredients for a valid acceptance
by the respondents. The correspondence exchanged
between the parties clearly go to show that after
understanding all the details and the confirmation by the H
822 SUPREME COURT REPORTS [201 O] 1 S.C.R.
A respondent, the petitioner sent a reply stating that
"thanks for the confirmation, just in time to go to the ship
owners". All these details clearly establish that both the
parties were aware of various conditions and understood
the terms and finally the charter was entered into a
B contract by the parties on 17.10.2007. (Para 7) (859-H; 860-
A-H; 861-A-D]
1.2. Once the contract is concluded orally or in
writing, the mere fact that a formal contract has to be
C prepared and initialed by the parties would not affect
either the acceptance of the contract so entered into or
implementation thereof, even if the formal contract has
never been initialed. When petitioner opened the email of
the respondent at 3:06 PM on 16.10.2007, it came to his
knowledge that an irrevocable contract was concluded.
D Apart from this, the mandate of Section 7 of the Indian
Contract Act stipulated that an acceptance must be
absolute and unconditional has also been fulfilled. It is
true that in the first acceptance conveyed by the
respondent contained a rider, namely, cancellation after
E 2 shipments which made acceptance conditional.
However, taking note of the said condition, the petitioner
requested the respondent to convey an unconditional
acceptance which was readily done through his email
sent at 3:06 PM with the words "we confirm the deal for
F 5 shipments", which is unconditional and unqualified.
The respondent was wholly aware of the fact that its
agreement with the petitioner was interconnected with the
ship owner. In other words, once the offer of the
petitioner was accepted following a very strict time
G schedule, the respondent could not escape from the
obligations that flowed from such an action. [Paras 9 and
10) (861-G-H; 862-A-G]
Shankarlal Narayandas Mundade v. The New Mofussi/
H Co. Ltd. & Ors. AIR 1946 PC 97, relied on.
TRI MEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 823
ALUMINIUM LTD, INDIA
Pagnan SPA v. Feed Products Ltd. 1987 Vol. 2, Lloyd's A
Law Reports 619; Mamidoil-Jetoil Greek Petroleum Co. S.A.
v. Okta Crude Oil Refinery AD (2001) Vol. 2 Lloyd's Law
Reports 76 at p. 89; Wilson Smithett & Cape (Sugar) Ltd. v.
Bangladesh Sugar and Food Industries Corporation (1986)
Vol. 1 Lloyd's Law Reports 378, referred to. B
1.3. Unless an inference can be drawn from the facts
that the parties intended to be bound only when a formal
agreement had been executed, the validity of the
agreement would not be affected by its lack of formality. C
In the present case, where the Commercial Offer carries
no clause making the conclusion of the contract
incumbent upon the Purchase Order, it is clear that the
basic and essential terms have been accepted by the
respondent, without any option but to treat the same as
a concluded contract. A specific order for 5 shipments D
was placed and only some minor details were to be
finalized through further agreement. After the suggested
modifications had crystallized over several emails. The
moment the commercial offer was accepted by the .
respondent, the contract came into existence. [Para 1~ E
[864-B-E]
Dresser Rand S.A. v. Bindal Agro Chem Ltd. (2006) 1
sec 751, distinguished.
2. It is essential that the intention of the parties be F
considered in order to conclude whether parties were ad
idem as far as adopting arbitration as a method of dispute
resolution was concerned. In the absence of signed
agreement between the parties, it would be possible to
infer arbitration clause from various documents duly G
approved and signed by the parties in the form of
exchange of e-mails, letter, telex, telegrams and other
means of tele-communication. [Paras 14 and 17] [865-E-
F; 866-C]
H
824 SUPREME COURT REPORTS [2010] 1 S C.R
A Smita Conductors Ltd. vs. Ewa Alloys Ltd. (2001) 7 SCC
728; Shakti Bhog Foods Limited vs. Kola Shipping Limited
(2009) 2 sec 134, relied on.
3. The petitioner has made out a case for
appointment of an Arbitrator in accordance with Clause
8
6 of the Purchase Order dated 15.10.2007 and
subsequent materials exchanged between the parties.
Inasmuch as in respect of the earlier contract between
the same parties, Justice B.N. Srikrishna, former Judge
C of this Court was adjudicating the same as an Arbitrator
at Mumbai, it is but proper and convenient for both
parties to have the assistance of the same Hon'ble
Judge. Accordingly, Hon'ble Mr. Justice B.N. Srikrishna,
former Judge of this Court is appointed as an Arbitrator
to resolve the dispute between the parties. [Paras 20 and
D 21] [868-8-F]
Great Offshore Ltd. v. Iranian Offshore Engg. &
Construction Co., (2008) 14 SCC 240, relied on.
Case Law Reference:
E
1987 Vol. 2, Lloyd's referred to Para 11
Law Reports 619 (2001) Vol. 2
Lloyd's Law Reports 76 referred to Para 11
F
(1986) Vol. 1 Lloyd's
Law Reports 378 referred to Para 11
(2006) 1 sec 151 distinguished Para 12
AIR 1946 PC 97 relied on Para 11
G
(2001) 1 sec 12a relied on Para 15
(2009) 2 sec 134 relied on Para 16
(2008) 14 sec 240 relied on Para 19
H
TRI MEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 825
ALUMINIUML TD, !NOIA
CIVIL ORIGINAL JURISDICTION : Arbitration Petition No. A
10 of 2009.
K.K. Venugopal, Gopal Sankara Narayanan, R.
Subramanian, Vikas Mehta, Rohit Bhat for the Appellant.
C.A. Sundaram, Rohini Muea, Abhishek Gupta, Zafar 8
lnayat, Anandh Kannan, Binu Tamta for the Respondent.
The Judgment of the Court was delivered by
P. SATHASIVAM, J. 1. In this petition the Petitioner- C
Company seeks to invoke arbitration clause under Section
11 (6) of the Arbitration & Conciliation Act, 1996 for appointment
of an arbitrator as per the Arbitration Agreement contained in
clause 6 of the Commercial Offer (purchase order) dated
15.10.2007 and clause 29 of the Agreement exchanged
0
between the parties on 08.11.2007.
2. The case of the petitioner is as follows:
The Petitioner-Company is registered in Dubai and
engaged in the business of trading in Minerals across the world. E
Based on the orders from their purchasers, they procure
mineral Ores from the suppliers, negotiate and finalize
shipments with the ship owners and arrange for the shipment
of Minerals across the world. The Respondent is a Company
registered in India using Aluminium Ore as one of the major F
inputs for their operations.
3. On 15.10.2007, the petitioner submitted a commercial
offer through e-mail for the supply of Bauxite to the respondent.
After several exchanges of e-mails and after agreeing on the
material terms of the contract, the respondent conveyed their G
acceptance of the offer through e-mail on 16.10.2007
confirming the supply of 5 shipments of Bauxite to be supplied
from Australia to Vizag/Kakinada. On the basis of the
acceptance by the respondent, the petitioner concluded the deal
with the Bauxite supplier in Australia on the same day and H
826 SUPREME COURT REPORTS [2010] 1 S.C.R.
A entered into a binding Charter Party Agreement with the ship
owner in Oslo on 17.10.2007. A meeting was held between the
representatives of the respondent and the petitioner at
Lanjigarh, Orissa on 26.10.2007 and the minutes of this
meeting were signed by them. The acceptance of the offer is
B acknowledged by the respondent in these minutes. A formal
contract containing a detailed arbitration clause was also sent
by the respondent to the petitioner on 08.11.2007 which was
accepted by the petitioner with some changes and returned the
same to the respondent the same evening. On 09.11.2007, the
c petitioner entered into a formal Bauxite sales Agreement with
Rio Tinto of Australia for the supply of 225000 tonnes of
Bauxite. On 12.11.2007, the respondent requested the
petitioner to hold the next consignment until further notice. On
13.11.2007, the petitioner informed the respondent that it was
not possible to postpone the cargo and requested them to sign
0
the Purchase Agreement. On 13.11.2007 itself, the ship owners
nominated the ship for loading the material on 28.11.2007. The
petitioner terminated the contract on 16.11.2007 reserving the
right to claim for damages. On 18.11.2007, the petitioner
E 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
F 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
G petitioner to pay a lump-sum of 600,000 US$ to be paid in two
installments. The petitioner paid the amount in two 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
H referring the dispute to arbitration as per ClausP 23 of the
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 827
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
Purchase Order and informed about nominating Mr. Shiv A
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 B
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 C
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 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 D
1a 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
inegotiation as is evident from the correspondence between the E
:iarties. The product specifications, price, inclusions in the
:ontract price, delivery point, insurance, commencement and
:onclusion dates of the contract, transfer of title, quality check
end demurrage are all factors that are at large and remain
Jndecided. In such a scenario, where the parties were not in F
Jne mind with respect to any aspect of the transaction, the
;ontention of the petitioner that there existed a binding contract
)etween the parties as also a binding arbitration agreement
·S wholly erroneous and misleading. Apart from the commercial I
Jffer dated 15.10.2007, subject matter of the instant G
xoceedings, the petitioner had sent another commercial offer
Jn 05.09.2007 bearing No. TID/F/194/2007 also for 45000 MTs
Jf Bauxite (of Australian origin) which offer had been followed
JP with a purchase order executed by and between the parties.
l\/hile the commercial offer, subject-matter of the instant H
828 SUPREME COURT REPORTS [2010] 1 S.C.R.
A 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
B account of such analysis being conducted, the respondent on
12.11.2007 wrote to the petitioner bringing the factum of the
ongoing ana)ysis 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
c product. Despite being put on notice by the respondent for
deferment of shipment, the petitioner 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
0
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.
E 5. In the light of the above pleadings of both the parties,
heard Mr. K.K. Venugopal, learned senior counsel for the
petitioner and Mr. C.A. Sundaram, learned senior counsel for
the respondent.
F 6. Mr. K.K. Venugopal, learned senior counsel for the
petitioner, after taking me through the sequence of events which
took place on 15.10.2007 and 16.10.2007, submitted that the
contract between the petitioner and the respondent stood
concluded by acceptance of the offer for five shipments by the
G respondent at 3.05 p.m. on 16.10.2007. He further contended
that the commercial offer of 16.10.2007 was pursuant to the
request of the respondent on 10.10.2007 and on the basis of
a similar transaction which had been concluded in the previous
month between the parties. By taking me through v::>rious e-
mails exchanged between the parties, he contended th::it t: 1e
H
TRIMEX INTERNATIONAL1FZE LTD. DUBAI v. VEDANTA 8Q9
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
charter was entered into a contract by the parties on A
17.10.2007 i.e. the next day. He finally submitted that from the
materials it was established beyond doubt that the intention of
parties in case of any dispute between them arising out of the
contract which was concluded on 16.10.2007 at 3.06 p.m. shall
be settled through arbitration. On the other hand, Mr. C.A. B
Sundaram, learned senior counsel for the respondent
contended that there was no concluded contract between the
parties and that the agreement between the petitioner and the
respondent was only in respect of the number of shipments
(two or five) and nothing more. According to him, there is no c
arbitration agreement and that clause 6 is vague and
ambiguous. He further contended that even in the legal notice
dated 01.09.2008 issued by the petitioner's counsel, there is
. no specific reference to clause 6 of the commercial offer but
mentioned only clause 29 of the purchase order exchanged 0
between the ,parties on 08.11.2007 but the present petition
before this Court mentions both of them. He also pointed out
that the Charter Party Agreement (CPA) entered into between
the petitioner and the ship owner is only a draft. Further, there
were differences in the purchase orders exchanged between E
the parties on 08.11.2007 and that it is only a draft form and
prayed for dismissal of the present petition.
7. It is the categorical claim of the petitioner that a
commercial offer containing an arbitration clause conveyed
through e-mail dated 15.10.2007 for the supply of bauxite to . F
the respondent is a valid offer. This offer was to expire by noon
the following day i.e. on 16.10.2007. It is the definite case of
the petitioner that after several exchanges of e-mails and
agreeing on the material terms of the contract, the respondent
conveyed their acceptance of the offer through e-mail on G
16.10.2007 confirming the supply of five shipments of bauxite
to be supplied from Australia-Vizag/Kakinada. Based on the
acceptance by the respondent, it is the claim of the petitioner
that they conclud~p the deal with the Bauxite supplier in
Australia on 16.10':2007 and entera1 into a binding Charter H
'JI/ ,"ii f .
830 SUPREME COURT REPORTS [2010) 1 S.C.R.
A Party Agreement with the ship owner in Oslo on 17.10.2007. It
was also pointed out that a formal contract containing further
detailed arbitration clause was also sent by the respondent to
the petitioner on 08.11.2007 which was accepted with some
minor changes by the petitioner in the same evening. Though
B exchange of e-mails were admitted by the respondent, it is their
specific stand that there was no concluded contract and in the
absence of the same, the petitioner cannot enforce certain
obligations reflected in those e-mails. and avail arbitration
clause as if the respondent h~s executed a formal agreement.
c In the light of the controversy and in view of the fact that copies
of e-mails exchanged between the officers of the petitioner and
respondent on various dates which are placed in the form of
annexures, it is useful to refer the relevant correspondence in
order to understand their claim:
D A)
Annexure P 1
Shanika
From: Swaminathan G [swami@trimexgroup.com]
E Sent: Tuesday, October 09, 2007 2:37 PM
To: Rajesh Mohata; Swayam Mishra
Cc: SR Subramanyam; Shanika
Subject: LM Grade Bauxite specs '1 (2). Doc
F Importance: High
Attachments: LM Grade Bauxite specs'1 (2). Doc
Dear Rajesh,
G
This has a reference to our earlier mails regarding
the specs for the fresh cargoes. After discussions with RTA
their comments are reproduced.
"Quote"
H
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 831
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.)
We maintain our position that we are not able to A
accurately measure reactive silica at our Weipa lab for us
to place a bonus/penalty on and that any rejection criteria
on silica is unreasonable. It is for this reason that we are
only prepared to revise our offer on total silica with a Base
Grade of 4.5%. We are prepared to increase this bonus/ B
penalty to US$1.50 per % total silica either side the Base
Grade. This we believe is a fair compensation to Vedanta
and is our final offer.
Unfortunately we cannot make this an open ended
offer as we need to fill our shipping slots set aside for these C
cargoes in November and December. We have already
lost the October opportunity. Freight and spot prices for
bauxite have all moved up since we started this
negotiation and we are making offers for 2008 cargoes
at $4 higher than your offer. Therefore, we have to put a D •
validity on this until close of business Friday, 12 October
after which this offer will be subject to re-confir111atia{l.
"Unquote"
E
We have prepared a revised schedule of specs
which is attached. This is not yet confirmed with RTA but
once you agree to go by this then we can take up with them.
Rejection points are also to be agreed by them. Further
the freights have gone up substantially since we last made
the shipment. Hence we have to freeze the quality specs F
first and then take up with RTA for confirmation and then
get the vessel freight. ·
Hence we request you to revert urgently before
closing today as this area is all closed from Thursday G
Best regards
Swaminathan
H
832 SUPREME COURT REPORTS (2010) 1 S.C.R.
A Low Monohydrate Grade Bauxite
Typical Analysis
Parameter Range Base spec Bonus/Penalty Rejection
Trihydrate 42-46% 45% Min. Bonus US Below
alumina $0.50 per tonne 41%
B (THA) per percentage
point fraction
pro-rate above 45%
Penalty US$
0.50 per tonne' per·
percentage point
c fraction pro-rate
below45%
Penalty US
$1.00 per tonne
per percentage
D point fraction
pro-rate below 42%
Monohyd- 3-5% 4.5% Max. Bonus US $0.50 Above
rate per tonne per 5.0%
alumina percentage point
E MHA) fraction pro-rate
below4.5%.
Penalty US$ 0.50
per tonne per
percentage point
fraction pro-rate
F above 4.5%.
Total Silica 4-6% 4.5% Max. Bonus US $1.50 N/A
per tonne per
percentage point
fraction pro-rata
G below4.5%.
Penalty US$ 1.50
per tonne per
percentage point
fraction pro-rata
H above 4.5%
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 833
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
B} A
Shanika
From: Swayam Mishra [swayam.mishra@vedanta.co.in]
Sent: Wednesday, October 10, 2007 11:16 AM
To: Swaminathan G B
Cc: Rajesh Mohata; Shanika; SR Subramanyam;
Chinmayee Panda; N. Chellappa; Hukum Chand Dahiya
Subject: Re: LM Grade Bauxite specs '1 (2). Doc
c
Attachments: LM Grade Bauxite specs'1 (2). Doc
Dear Mr. Swaminathan,
Please find our observation in the attached sheet. Kindly
give your confirmation for the same. D
Thanks
Swayam Mishra
Commercial Department
Vedanta Aluminium Ltd., Lanjigarh E
Dist: Kalahandi
Pin: 766027
Orissa
9937251390
F
C)
Shanika
From: Swaminathan G [swami@trimexgroup.com]
Sent: Wednesday, October 10, 2007 1:30 PM
To: Swayam Mishra G
Cc: Rajesh Mohata; Shanika; SR Subramanyam;
Chinmayee Panda; N. Chellappa; Hukum Chand Dahiya
Subject: Re: LM Grade Bauxite specs '1 (2). Doc
Importance: High H
834 SUPREME COURT REPORTS [2010) 1 S.C.R.
A Dear Swayam,
We reviewed the reply below and this not acceptable
to RTA or by ourselves.
We are unable to improve on the proposal given
B from our side which itself needs to be ratified by RTA.
Please also keep in mind the time limit and we need
to have time for obtaining freights which is the most difficult
aspect in the present market.
c
Your final reply may be given to us before close of
office hours today.
Regards
Swami
D
D)
Shanika
From: Swayam Mishra (swayam.mishra@vedanta.co.in]
Sent: Wednesday, October 10, 2007 7:17 PM
E To: Swaminathan G
Cc: Chinmayee Panda; Hukum Chand Dahiya N.
Chellappa; Rajesh Mohata; Shanika; SR Subramanyam;
Subject: Re: LM Grade Bauxite specs '1 (2). Doc
F Dear Mr. Swaminathan,
Please send your rates at your proposed quality
parameters on FOB basis and on CIF basis, separately.
We would also be interested to have separate rates
G for 2 shipments and for the complete offer of 2 Lac MT.
Thanks
Swayam Mishra
Commercial Department
H
TRI MEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 835
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
Vedanta Aluminium Ltd. Lanjigarh A
Distt: Kalahandi
Pin: 766 027
Orissa
E)
B
Annexure P-2
Shanika
From: Swaminathan G [swami@trimexgroup.com]
Sent: Monday, October 15, 2007 4:46 PM
To: Rajesh Mohata; Swayam Mishra C
Cc: S R Subramanyam; Shanika
Importance: High
Attachments: Offer for Mono Bxt.Pdf
Dear Rajeshji, D
Please find attached our offer for the two options as
desired by you. Please note the validity of the offer until
1200 IST tomorrow. Freights are going up continuously and
have jumped since we last gave you the offer. A quick E
decision will be helpful otherwise we may lose this freight
offer too.
Awaiting an early response.
Best regards
F
G. Swaminathan
General Manager
Trimex International
P.O. Box 17056
Dubai~U.A.E.
Tel:971-4-8835544 Ext. 209 G
Fax:-971-4-8836410
Mob:-971-50-6455819
TRIM EX
The Mineral People H
836 SUPREME COURT REPORTS [201 OJ 1 S.C.R.
A COMMERCIAL OFFER
Company: Mis Vedanta Alumina Offer No: TID/F/223/2007
Ltd. Lanjigarh Date: October 15, 2007
Kind Attn: Mr. Rajesh Mohata Valid Until: October 16, 2007
General Manager (Commercial) 1200 noon IST
B
Product Quantity Price per Delivery Payment
Description* tonne Terms Terms
Low OPTION US$93.50 CIF Free Out Irrevocable
Monohydrate 1 (2) pmt (US Visakhapat- Lie
c Grade Shipments Dollars nam, lndia(C) for 100%
Bauxite of 45,000 Ninety clause Invoice value
(Australian mt+/- Three and Cargo cover to be
Origin) 10% at Cents Fifty established
Shipper's only) 30 days
Option before each
D shipment
OPTION II
(5)
Shipments -92.5%
of 45, 000 payable at
E mt+/- 10% sight-7.5%
at payable
Shipper's within 30
option days after
completion of
discharge
F
*Please see attached Annexure I for detailed product specifications
ShipmentDischarge Discharge Demurrage/ Shipment
Lot port rate Desp.
G OPTION I (Non Oil 8000mt PD US$ 75,000 OPTION I
(2) Mooring at SHINC. per day pro In Nov. &
Shipments Visakhapa NOR rata Half Dec. 2007
OPTION II tnam, ATON Despatch
5) India) SHINC
Shipments WISON, OPTION II
H
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 837
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
WIPON, From Nov.
A
WCCON 07 to March
WIFPON 08.
12 hrs
turntime USC
Anytime B
used to count
Additional Information/Comments:
Vessel details (all about): age-Not over 25 years, 4 x 20
mt gears, 8-10 cbm grabs C
Draft: buyers to guarantee draft of 12 mtrs, at discharge
port
Quantity: Draft survey at discharge port by mutually agree
independent surveyor will be final. D
Quality: Invoice for initial payment as per Producer's Quality
Certificate Balance 7.5% payment will be based on
analysis done by Independent surveyor
E
Bonus/Penalty: As per Annexure I
Wherever applicable any charges payable at discharge
port (custom duty, taxes etc.) other than our stated sales
conditions will be to buyers account.
F
Conditions of sale- all sales are concluded on the following
terms, unless varied by written agreements between us.
Neither our agents nor our associated companies are
authorized to vary these terms.
1. We shall not be liable by reason of any defect (including G
non-conformity with specification or sample) unless we
receive written notice of the defect within 15 days of
delivery. Our liability in that event will be limited to product
related compensation after discussions and suitable joint
H
838 SUPREME COURT REPORTS [2010] 1 S.C.R.
A analysis wherever applicable. In case of joint analysis
·' being agreed upon for confirming the product quality/
penalty determination, the above should be arranged by
the buyer within 30 days of product delivery to the
customer.
B
2. We shall have no liability under this contract or by
reason of any representation, warranty or duty for any
direct, indirect, special or consequential loss or damage,
costs or expenses arising out of the composition, supply,
packaging, handling or use of products.
c
3. Unless stated otherwise, products are sold strictly to the
offered sale condition and payments are due on the dates
as applicable.
D 4. Prices are valid upto 1200 hrs IST 16.10.2007 unless
withdrawn by notice from us during that period.
5. Interest may be charged on overdue amount wherever
applicable as per our terms mentioned in commercial/
payment invoice.
E
6. This contract is governed by Indian Law & Arbitration
in Mumbai courts.
For Trimex International FZE
Name: G. Swaminathan
F (computerized offer-Signature not required)
TRIMEX INTERNATIONAL FZE
P.O. BOX 17056,
Jabel Ali,
G Dubai, UAI
Tel:971-4-8835544
Fax:-971-4-8836410
Telex: (893) 47804
Email Trimexc@emiratesnet.ac.
H www.trimexgrou12.com
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 839
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
F) A
Annexure P-3
Shanika
From: Swayam Mishra [swayam.mishra@vedanta.co.in]
Sent: Monday, October 15, 2007 5:34 PM B
To: Swaminathan G
Cc: Rajesh Mohata; Shanika; SR Subramanyam;
Chinmayee Panda
Subject: Qffer for imported Bauxite
c
Dear Mr. Swaminathan,
We have the following observations related to your offer:
1. Bonus/Penalty Clause for THA: Penalty US $ 1.00
per tonne per percentage point fraction pro-rata D
below 42%.
2. Rejection Criteria for Total Silica:-Since the range
is between (4-6%), so rejection will be for Total
Silica > 6%. E
I 3. Please let us have the FOB rates as well.
4. As you are stating that the freight market is
expected to go up in the coming months, so the rate
for the supply of 2 shipments should be less than F·
the present rate quoted by you for 5 rates.
Looking forward for your positive response.
· Swayam Mishra
Commercial Department G
Vedanta Aluminium Ltd. Lanjigarh
Distt: Kalahandi
Pin: 766 027
Orissa Shanika
H
840 SUPREME COURT REPORTS [201 O] 1 S.C.R.
A G)
From: Swaminathan G [swami@trimexgroup.com]
Sent: Monday, October 15, 2007 6:04 PM
To: swayam.mishra@vedanta.co.in
Cc: Rajesh.mohata@vedanta.co.in; Shanika; SR
B Subramanyam; ChinmayeePanda@vedanta.co.in
Subject: Re: Offer for imported bauxite
Dear Swayam,
c THA penalty rate is as agreed/ratified by RTA.
Silica rejection els not agreed by RTA. Given at our
risk but we cannot make it coincide with maxm of range
as it is too risky for us. In fact, we also refused rejn els but
D Mr. SRS argued on this and persuaded us to put it in for
your comfort.\
We only sell C N F basis.
Freight rates presently are even more firm than next
E year. But overall we have this package from ship owners.
Trust this clarifies.
Best regards
F Swami
H)
From: Swayam Mishra (swayam.mishra@vedanta.co.in]
Sent: Tuesday, October 16, 2007 11 :28 AM
G To: Swaminathan G
Cc:ChinmayeePanda@vedanta.co.in;
Rajesh.mohata@vedanta.co.in; Shanika; SR
Subramanyam
H Subject: Re: Offer for imported bauxite
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 841
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
Dear Mr. Swaminathan, A
As assured by Mr. SRS that the material is
homogeneous in nature, and looking at the result of the
present shipment, we do not think that keeping a rejection
limit at 6% is a risk for you. B
Please let us have the cost break-up
(Material+Coastal Freight). We would also like to have a
rate for CIF Kakinada port.
Thanks
Swayam Mishra
c
Commercial Department
Vedanta Aluminium Ltd. Lanjigarh
Distt: Kalahandi
Pin: 766 027
Orissa
D
I)
Shanika
From: Swaminathan G [swami@trimexgroup.com]
Sent: Tuesday, October 16, 2007 11 :48 AM E
To: Rajesh.-Mohata@vedanta.co.in; Swayam Mishra
Cc: SR Subramanyam; Shanika
Subject: Offer for bauxite
Importance: High
Urgent F
Dear Swayam,
The time has just expired. We still have a little more than
1 hour before our offer from Owners expires. Hence we G
can extend this by another 1 hour which is 1300 hrs IST
today.
Please let us know your decision either way as we
would like to keep all parties informed in time about the
H
842 SUPREME COURT REPORTS [2010) 1 S.C.R.
A developments.
Regards
Swami
J)
B
Shanika
From: Swaminathan G [swami@trimexgroup.com]
Sent: Tuesday, October 16, 2007 11 :54 AM
To: Swayam Mishra
c Cc: ChinmayeePanda@vedanta.co.in;
Rajesh.mohata@vedanta.co.in
S R Subramanyam; Shanika
Subject: Offer for imported bauxite
o Swayam,
Where will you discharge and store in Kakinada
port? Is it permissible to take it to Berth and if so what is
the draft you can guarantee?
E If it is anchorage, it is heavily congested and also you
cannot achieve the discharge rate of even 4000t per day.
Freight will shoot up and it will be unworkable.
Regards
F Swami
K)
Shanika
From: Swayam Mishr.. [swayam.mishra@vedanta.co.in]
G Sent: Tuesday, October 16, 2007 1:38 PM
To: Swaminathan G
Cc: ChinmayeePanda@vedanta.co.in;
Rajesh.mohata@vedanta.co.in;
Shanika; S R Subramanyam; Sarika Singh
H Subject: Offer for imported bauxite
TRI MEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 843
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
Dear Mr. Swaminathan, A
The Demurrage rate should be decreased and made
as per last shipment. Please negotiate the same with the
Vessel Owners. Either reduce the freight rate or the
demurrage rate.
B
Kindly confirm at the earliest.
Swayam Mishra
Commercial Department
Vedanta Aluminium Ltd. Lanjigarh
Distt: Kalahandi
c
Pin: 766 027
Orissa
L)_
D
Shanika
From: Shanika[shani@trimexgroup.com]
Sent: Tuesday, October 16, 2007 2:01 PM
To: 'Swayam Mishra' Swaminathan G'
Cc: C h i n m a ye e P a n d a @ v e d a n t a . c o . i n ;
Rajesh.mohata@vedanta.co.in; S R Subramanyam; E
Sarika Singh
Subject: RE: Offer for imported Bauxite
Dear Mr. Swayam,
As confirmed by Mr. Swaminathan the Demurrage F
rate is US$ 69,000 per day. This is the offer given by
owners and cannot be reduced any turther.
Regards
Shanika Peiris
Assistant Manager-Commercial
G
TRIMEX INITERNATIONAL FZE
P.O. BOX 17056,
Dubai, UAI
Tel:971-4-8835544, Ext. 208
H
844 SUPREME COURT REPORTS {2010] 1 S.C.R.
A Fax:-971-4-8836410
971-6522083
M)
Shanika
From: Swayam Mishra [swayam.mishra@vedanta.co.in]
8
Sent: Tuesday, October 16, 2007 2:41 PM
To: shani@trimexgroup.com S R Subramanyam';
'Swaminathan G'
Cc: C h i n m a ye e P a n d a @ v e d a n ta . co . i n ;
Rajesh.mohata@vedanta.co.in; Sarika Singh
c
Subject: Re: Offer for imported bauxite
Dear Swaminathan,
We confirm the order for 5 shipments as per our last
D discussions. At the same time we would like to have a
termination clause after 2 shipments.
Thanks
Swayam Mishra
E Commercial Department
Vedanta Aluminium Ltd. Lanjigarh
Distt: Kalahandi
Pin: 766 027
Orissa
F
N)
From: Swayam Mishra (swayam.mishra@vedanta.co.in)
Sent: Tuesday, October 16, 2007 3:06 PM
To: Swaminathan G'
G Cc: C h i n m a y e e P a n d a @ v e d a n t a . c o . i n ;
Rajesh.mohata@vedanta.co.in;
sarika.singh@vedanta.co.in; Shanika; S.R.
Subramanyam; T. Prasanna Kumar Patro; N.
Chellappa
H Subject: Re: Offer for imported bauxite
TRI MEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 845
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
Dear Swaminathan, A
We confirm the deal for 5 shipments.
Thanks
Swayam Mishra
Commercial Department
Vedanta Aluminium Ltd. Lanjigarh B
Distt: Kalahandi
Pin: 766 027
Orissa
0) c
Shanika
From: Swaminathan G [swami@trimexgroup.com]
Sent: Tuesday, October 16, 2007 3:49 PM
To: swayam.mishra@vedanta.co.in
D
Cc: ChinmayeePanda@vedanta.co.in;
Rajesh.mohata@vedanta.co.in;
sarika.singh@vedanta.co.in Shanika; SR
Subramanyam; tpk. Patro@vedanta.co.in; n.
chellappa@vedanta.co.in
E
Subject: Re: Offer for imported bauxite
Dear Swayam,
Thanks for the confirmation just in time to go to Owners
F
Regards
Swami
P)
Shanika G
From: Swaminathan G [swami@trimexgroup.com]
Sent: Tuesday, October 16, 2007 3:57 PM
To: Shaun.Barrv@comalco.riotinto.com.au;
Chandra.Chandrashekhar@riotinto.com.au
Cc: Shanika H
846 SUJ:>REME COURT REPORTS [2010] 1 S.C.R.
A Subject: 200K Bauxite for Vedanta
Dear Shaun
Deal is through for 5 Shipments.
B Shall give you shipping schedule agreed with owners and
details by tomorrow.
Special word of appreciation to the RTA team led by Mark
for the support and patience in putting this thru. It's like
carrying coal to Newcastle!!!
c
Thanks & Regards
Swami
Q)
D
Shanika
From: Swaminathan G [swami@trimexgroup.com]
Sent: Wednesday, October 17, 2007 11:12 AM
To: swayam.mishra@vedanta.co.in
E Cc: ChinmayeePanda@vedanta.co.in
Rajesh.mohata@vedanta.co.in; Shanika; SR
Subramanyam; Suvendu.sahoo@vedanta.co. in
Subject: Re: Inactive Role of Agent.
F Dear Swayam
Small check n revert and advise them suitably.
Meantime please send draft agreement.
G Regards
Swami
---Original Message,--
From: Swayam Mishraswayam.mishra@vedanta.co.in
H
TRI MEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 84 7
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.)
To: Swaminathan G A
Cc:ChinmayeePanda@vedanta.co.in;
<ChinmayeePanda@vedanta.co. in>
Rajesh.mohata@vedanta.co.in;<RajeSh.mohata@vedanta.co.in;>
Shanika; SR Subramanyam; Suvendu.Sekhar Sahoo B
Suvendu.Sahoo@vedanta.co.in
Sent: Wed Oct 17 10:56:43 2007
Subject: Inactive role of Agent
c
Dear Mr. Swaminathan,
On one hand where we are going to do 5 future shipments
of imported bauxite, it is sad to notice that your agent at
Vizag port is not taking enough initiative to handle the first 0
shipment even!!!
While our stevedores and representatives are constantly
following up with the port authorities to grant us a berth,
your agent is being too noncommittal. Please advice your
agent to play a more active role in the whole process. E
Thanks
Swayam Mishra
Commercial Department
Vedanta Aluminium Ltd. Lanjigarh
F
Distt: Kalahandi
Pin: 766 027
Orissa
R)
Shanika G
From: Swaminathan G [swami@trimexgroup.com]
Sent: Saturday, October 20, 2007 09:08 AM
To: swayam.mishra@vedanta.co.in
Cc: Shanika; SR Subramanyam; H
848 'SUPREME COURT REPORTS [2010] 1 S.C.R.
A Subject: Contract for bauxite shipments Importance: High
Dear Swayam,
As per the agreements with Owners the following is the
schedule of shipments:
B (1) Laycan agreed with owners:
November 2007-15th/30th
December 2007-Suggested 5th/20th (to be agreed)
January 2008-15th/30th
February 2088-14th/28th
c March 2008-15th/30th
In view of this, we need to quickly complete the
execution of agreement and establishing of Lie as
discussed on Thursday. I am awaiting the draft agreement
D so that we can move forward. Also please confirm if you
have surrendered the Original B/L for the present
consignment to Master as vessel is likely to finish soon.
Matter most urgent.
Regards,
E Swami
Annexure P-4
VAL SITE, Lanjigarh
F· Minutes of the Meeting
M/s Vedanta Aluminium Limited M/s Timex Group
Mr. Rajesh Mohata Mr. G. Swaminathan
Mr. Venkat Rao Mr. S.R. Subramaniam
Mr. Swayam Mishra
G Mr. N. Chellappa
Ms. Sarika Singh
*The Agenda of the meeting was:
1. Supply of Bauxite from Katni
2. Supply of Bauxite from Gujarat
H
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 849
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
3. Imported Bauxite from Australia A
Bauxite from Katni
1. Trimex will give its commercial offer within 20th Nov.
2007 to VAL.
B
Bauxite from Gujarat
1. VAL has asked Trimex to re-work the offer to
provide a supply schedule till March 30th, 2008
against Trimex's deadline of June 2008. c
2. The rate offered by Trimex is Rs. 1250 PMT (FOB)
Okha/Porbander). VAL has asked for a decrease
in rates. Trimex will provide its final offer by
29.10.2007.
D
3. For the existing contract of supply of 10000 MT of
bauxite through rakes, further movements will ensue
after the due discussions. For the punitive charges
levied by railways against the 1st Rake moved from
Okha, Trimex has been advised to take up the E
issue with the Railways officials at Okha.
Imported Bauxite from Australia
1. For the shipments under the proposed new contract
of 2 Lacs MT. Trimex requested to clearly mention F
the following clauses:
(i) As per Trimex offer No. TID/F/223/2007 dated 15th
October 2007 and accepted by VAL, the price is on CIF-
FO basis. As per Trimex under such a situation the G
berthing responsibility should be with VAL.
(ii) A copy of base Charter Party Agreement and fixture
terms shall be provided by Trimex, which should be
deemed incorporated in the Purchase agreement.
H
850 SUPREME COURT REPORTS [2010] 1 S.C.R.
A (iii) The Discharge rate agreed should be clearly
mentioned in the Purchase agreement.
2. VAL will confirm on the feasibility of discharging
the cargo at Kakinada port and accordingly
TRIMEX will discuss with the Vessel Owners.
B
3. For the demurrage incurred in the shipment of
MV Nena C vide Order No. VAUOPRN/526 dated
10.09.07, Trimex claims that the same is on VAL's
account as the agreement was on CIF-
c Visakhapatnam basis. VAL will give its opinion on
the same.
4. Trimex has asked to finalise on the new contract
and the demurrage by end of office hours on
D 30.10.2007.
Sd/- Sd/-
(Rajesh Mohata) (G. Swaminathan)
Sd/- Sd/-
(N. Chellapa) (SR Subramaniam)
E Sd/-
(Venkat Rao)
Sd/-
(Sarika Singh)
Sd/-
F (Swayam Mishra)
S)
Annexure P-5
Swaminathan G
G From: Swaminathan G
Sent: Tuesday, October 30, 2007 12:23 PM
To: 'Swayam Mishra'; Rajesh.Mohata@vedanta.co.in
Cc: SR Subramanyam; Shanika;
H ChinmayeePanda@vedanta.co.in
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 851
ALUMINIUM LTD, INDIA[P. SATHASIVAM, J.]
Subject: FW:BULKHANDING TBN/TRIMEX-WEIPA/ A
VIJZAG
Dear Swayam,
With reference to our discussions, please find the fixture
terms for the new contract. We are getting the draft CP for B
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.
c
Regards
Swami
T)
D
Annexure P-6
!!!
From: Shanika (shani@trimexgroup.com)
Sent: Friday, November 02, 2007 6:40 PM
To: 'Swayam Mishra' E
CC: 'SR Subramanyam'; Rajesh.Mohata@vedanta.co.in
Subject: Draft CP for 5 x 45000 mt LM Bauxite
Attachments: LM Bxt COA PC.pdf; LM Bxt COA RC.doc
Attn: Mr. Swayam Mishra F
Copy of draft C/P just received from owners is attached.
It is very likely that Owners will nominate the performing
vessel for the first shipment in November 2007. Hence, we
request you to expedite finalization of contract and Uc so G
as to avoid any delays.
Rgards
Shanika Peris
Assistant Manager-Commercial H
852 SUPREME COURT REPORTS [2010] 1 S.C.R.
A TRIMEX INTERNATIONAL
P.O. BOX 17056,
Dubai, UAE
Tel:971-4-8835544 Ext. 208
Fax:-971-4-883641 O, 971-5-6522083
B U)
Shanika
From: Swaminathan G [swami@trimexgroup.com]
Sent: Wednesday, November 07, 2007, 08:45 AM
To: Swayam Mishra
c Cc: ChinmaveePanda@vedanta.co.in
Rajesh.mohata@vedanta.co.in; Shanika, S R
Subramanyam; Venkateshwar Rao; KS Bala
Subject: Re: Import Consginment (2 lacs)
D Importance: High
Top Priority/Most Urgent
Dear Swayam,
At the outset wish you all a very Happy Diwali.
E We got a feed back from owners late last night that
they will look at your request on arrival draft at 11.5 mts
and Kakinada port on a case basis at the time of each
nomination without Guarantee. This is due to the reason
they are not sure what kind of vessel will be in position in
F that area.
Meanwhile, as already mentioned let us proceed with
contract and Uc as we are left with bare minimum time
before Owner will nominate a vessel for the first laycan
G starting 15-30 Nov anytime from tomorrow. We have to
establish our Uc 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.
H
TRI MEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 853
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.)
Please rush the agreement for signature. A
Best Regards
Swami
V) B
Shanika
From: Shanika [shani@trimexgroup.com]
Sent: Wednesday, November 07, 2007, 11 :20 AM
To: Swayam Mishra
Cc: ChinmayeePanda@vedanta.co.in c
Rajesh.mohata@vedanta.co.in; S R Subramanyam;
'Swaminathan G'
Subject: Agreement for 5 x 45, 000 mt LM Bauxite
Importance: High
D
Urgent
Attn: Mr. Swayam Mishra
We have just received feed back from Owners. On 11.5
meters Draft they have indicated an increase of US$3.5 E
pmt which will make the price US$97.00 pmt CIF Free Out
kakinada if you were to have an option additionally for
Kakinada. The following terms would be applicable:
-Discharge port to be declared before vessels arrival at
load port. F
- Discharge basis Kakinada "One Safe Berth"
All other discharge port terms etc., will be the same. You
may introduce this into the Contract as an additional clause G
and prepare draft urgently and sent it to us.
Regards
Shanika Peiris
Assistant Manager-Commercial
Shanika H
854 SUPREME COURT REPORTS [2010} 1 S.C.R.
A W)
From: Swayam Mishra [swayam.mishra@vedanta.co.in]
Sent:Thursday, November 08, 2007 12:28 PM
To: shani@trimexgroup.com
Cc: ChinmayeePanda@vedanta.co.in;
B Rajesh.mohata@vedanta co.in; Sarika Singh; S.R.
Subramanyam; 'Swaminathan G'; Venkateshwar Rao; N.
Chellappa
Subject: Option on Draft and Port
C Dear Shanika,
Please confirm if the increase in rate is due to the
decrease in draft or change in port.
Thanks
D
Swayam Mishra
Commercial Department
Vedanta Aluminium Ltd. Lanjigarh
Distt: Kalahandi
E Pin: 766 027
Orissa
X)
Annexure P-8
F
From: Swayam Mishra [swayam.mishra@vedanta.co.in]
Sent: Thursday, November 08, 2007 2:28 PM
To: Swaminathan G
Cc: Rajesh.mohata@vedanta.co.in; Shanika; S.R.
Subramanyam; N. Chellappa; Sarika Singh; Chinmayee
Panda; Venkateshwar Rao;
Subject: Draft Contract for Import Bauxite-5 shipments
Attachments: Trimex-imported-5 shipments 1.doc
TRI MEX INTERNATIONAL FZE1 LTD. DUBAI v. VEDANTA 855
ALUMINIUM LTD, INDIA fP. SATHASIVAM, J.]
Dear Mr. Swaminathan, A
Please find attached the draft contract.
Thanks
Swayam Mishra B
Commercial Department
PURCHASE ORDER
Mis Trimex International FZE c
Dubai
Sub: Purchase Order for supply of Low Monohydrate
Grade Bauxite
Ref: Offer No. TID/F/223/2007, Dated 15.10.2007 and our D
subsequent discussions held there on.
Dear Sir,
With reference to the above offer and subsequent E
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 F
29. Arbitration
The Parties hereto shall endeavour to settle all disputes
and differences relating to and/or arising out of the G
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 H
856 SUPREME COURT REPORTS [2010) 1 S.C.R.
A 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
B
arbitration shall be English.
The Parties further agree that any arbitration award shall
· be final and binding upon both the Parties.
c 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
D 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.
This order is being issued in duplicate. You are requested
E
to send the duplicate copy duly signed as a token of
acceptance of the terms and conditions.
Thanking you
Yours faithfully
F
For Vedanta Alumina Limited
Rajesh Mohata
GM-Commercial
G AA)
Re: Draft Contract
SHANIKA
From: Swaminathan G [swami@trimexgroup.com]
H
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 857
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
Sent: Thursday, November 08, 2007 6:29 PM A
To: swayam.mishra@vedantaco.in
Cc: SR Subramanyam; Shanika;
Rajesh.Mohata@vedanta.co.in;
Chinmayee.Panda@vedanta.co.in
Subject: Re: Draft Contract B
In final stage
Shall send very soon
Regards
c
AB)
Annexure P-10
SHANIKA
D
From: Swaminathan G [swami@trimexgroup.com]
Sent: Thursday, November 08, 2007 7:30 PM
To: Swayam Mishra
Cc: Rajesh.Mohata@vedanta.co.in;
Chinmayee.Panda@vedanta.co.in; SR Subramanyam; E
Shanika;in.chellappa@vedanta.co.in;
sarika.singh@vedanta.co.in; Venkateshwar Rao
Subject: Trimex-lmported_5 shipments 1.doc
Importance : High
Attachments: Trimex-lmported_5 shipments 1.doc F
Dear Swayam,
Please find the draft contract with clarification on various
points as discussed in meetings and on phone today. G
Please confirm the same in order.
Best regards
Swami. H
858 SUPREME COURT REPORTS (2010] 1 S.C.R.
A AC)
Annexure P-12
From: Rajesh Moh ata [mail to:
Rajesh.Mohata@vedanta.co.in]
B Sent: Monday, November 12, 2007 2:18 PM
To: Swaminathan G; Shanika; SR Subramanyam
Cc: Venkateshwar Rao; Swayam Mishra; Umesh Mehta
Subject: Trimex International
c 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
D 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.
E
Regards
Rajesh Mohata
Vedanta Aluminium Ltd.
F Mobile +91 99372 51229
(Please note with immediate effect our company name
changed to "Vedanta Aluminium Ltd.")
AD)
G
SHANIKA
From: Swaminathan G [swami@trimexgroup.com]
Sent: Monday, November 12, 2007 3:20 PM
To: Rajesh Mohata
H Cc: Venkateshwar Rao; Swayam Mishra; Umesh Mehta;
TRI MEX INTERNATIONAL FZE LTD, DUBAI v. VEDANTA 859
ALUMINIUM LTD, INOIA [P. SATHASIVAM, J.]
Shanika; SR Subramanyam A
Subject: Re: Trimex International
Importance : High
Dear Mr. Rajesh,
B
This is a bit shocking at this juncture as vessel
nomination is due from the Owners any time now against
the GOA
First, we have to go them urgently and ask them to
defer the first vessel by 15 days until 1st December as C
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 D
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.
E
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/ F
Owners.
We shall try and do our best but before that we need
VAL's clear confirmation on above.
Regards G
Swami
From the materials placed, it has to be ascertained whether
there exists a valid contract with the arbitration clause. It is
relevant to note that on 15.10.2007 at 4.26 p.m. the petitioner H
860 SUPREME COURT REPORTS [201 O] 1 S.C.R.
A submitted commercial offer wherein clause 6 contains
arbitration clause i.e. "this contract is governed by Indian law
and arbitration in Mumbai courts". At 5.34 p.m. though
respondents offered their comments, as rightly pointed out by
Mr. K.K.Venugopal, no comments were made in respect of
B 'arbitration clause'. It is further seen that at 6.04 p.m. the
petitioner sent a reply to the comments made by the
respondent. Again on 16.10.2007, at 11.28 a.m. though
respondents suggested certain additional information on the
offer note, here again no suggestion was made with regard to
C arbitration clause. At 11.48 a.m. the petitioner sent an e-mail
extending validity of the offer by another one hour. At 01.38
p.m., the respondent made certain suggestions on the
demurrage asking the petitioner to either reduce the freight rate
or the demurrage rate. On the same day at 02.01 p.m., the
D petitioner sent a reply on the demurrage stating that the rates
cannot be reduced any further. At 02.41 p.m., the respondent
informed the petitioner that they would like to have a termination
clause after two shipments. At 03.06 p.m., the petitioner sent
a mail stating that "no owner will accept this condition.
Respondent may accept two or five quickly". At 03.06 p.m. the
E respondent accepted the offer for five shipments. In response
to the same at 03.49 p.m., the petitioner thanked the
respondent for acceptance and conveyed that it was "just in
time" to go to the ship owners. At 03.57 p.m. the petitioner
finalized the contract with the bauxite supplier in Australia. Apart
F from the above minute to minute correspondences exchanged
between the parties regarding offer and acceptance, as rightly
pointed out by Mr. Venugopal the offer of 15.10.2007 contains
all essential ingredients for a valid acceptance by the
respondents namely, 1). Offer Validity period 2) Product
G Description 3) Quantity 4) Price per tonne 5) Delivery Terms
(CIF) 6) Payment Terms (Irrevocable L/C) 7) Shipment Lots 8)
Discharge Port 9) Discharge Rate with international shipping
acronyms 10) Demurrage Rate 11) Period of Shipment 12)
Vessel Details 13) Draft (Port/Berth Capacity corresponding
H to height of c, Jo) 14) Stipulations as to Survey by Independent
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEuANTA 861
ALUMINIUM LTD, INDIA (P. SATHASIVAM, J.]
Surveyors 15) Quality benchmark 16) Bonus/Penalty Rates & A
17) Applicable Laws (Indian Law) and Arbitration.
The minute to minute correspondence exchanged between
the parties, all the conditions prescribed which had been laid
down, awareness of urgency of accepting the offer without any
further delay to avoid variation in the freight or other factors, B
coupled with the e-mail sent on 16.10.2007 at 3.06 p.m. under
the subject "re: offer for imported bauxite" stated in unequivocal
terms, i.e. "we confirm the deal for five shipments", would
clearly go to show that after understanding all the details and
the confirmation by the respondent, the petitioner sent a reply C
stating that "thanks for the confirmation, just in time to go to
the ship owners". All the above details clearly establish that both
the parties were aware of various conditions and understood
the terms and finally the charter was entered into a contract by
the parties on 17.10.2007. D
8. Mr. C.A. Sundaram, learned senior counsel for the
respondent taking me through the same emails/
correspondence submitted that such clauses being unclear and
ambiguous, cannot be permitted to stand on its own footing so
as to deprive the respondent of its valid defence. He also E
reiterated that in the absence of a concluded· and binding
contract between the parties, the arbitration clause contained
in draft agreement cannot be relied on by the petitioner. He
further pointed out that the arbitration clause as contained in
the commercial offer suffers from vice of being unclear and F
ambiguous and, therefore, is not capable of being enforced.
9. In the light of the details which have been extracted in
the earlier paragraphs, I am unable to accept the stand of the
respondent. It is clear that if the intention of the parties was to
arbitrate any dispute which arose in relation to the offer of G
15.10.2007 and the acceptance of 16.10.2007, the dispute is
to be settled through arbitration. Once the contract is concluded
orally orin writing, the mere fact that a formal contract has to
be prepared and initialed by the parties would not affect either
the acceptance of the contract so entered into or H
862 SUPREME COURT REPORTS [201 OJ 1 S C.R.
A implementation thereof, even if the formal contract has never
been initialed.
10. The acceptance conveyed by the respondent, which
has already been extracted supra, satisfies the requirements
of Section 4 of the Indian Contract Act 1872. Section 4 reads
B as under:
"Communication when complete-
The communication of an acceptance is complete .... as
against the acceptor, when it comes to the knowledge of
c the proposer."
As rightly pointed out by the learned senior counsel for the
petitioner, when Mr. Swaminathan of Trimex opened the email
of Mr. Swayam Mishra of Vedanta at 3:06 PM on 16.10.2007,
it came to his knowledge that an irrevocable contract was
D concluded. Apart from this, the mandate of Section 7 of the
Indian Contract Act stipulated that an acceptance must be
absolute and unconditional has also been fulfilled. It is true that
in the first acceptance conveyed by the respondent contained
a rider, namely, cancellation after 2 shipments which made
E acceptance conditional. However, taking note of the said
condition, the petitioner requested the respondent to convey an
unconditional acceptance which was readily done through his
email sent at 3:06 PM with the words "we confirm the deal for
5 shipments'; which is unconditional and unqualified. As rightly
F pointed out by the learned senior counsel for the petitioner, the
respondent was wholly aware of the fact that its agreement with
the petitioner was interconnected with the ship owner. In other
words, once the offer of the petitioner was accepted following
a very strict time schedule, the respondent could not escape
G from the obligations that flowed from such an action.
11. The Court of Appeal in the case of Pagnan SPA vs.
Feed Products Ltd., [1987] Vol. 2, Lloyd's Law Reports 619
observed as follows:
"It is sometimes said that the parties must agree on the
H essential terms and that it is only matters of detail which
TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 863
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.)
can be left over. This may be misleading, since the word A
'essential' in that context is ambiguous. If by 'essential' one
means a te"rm without which the contract cannot be
enforced then the statement is true: the law cannot enforce
an incomplete contract. If by 'essential' one means a term
which the parties have agreed to be essential for the B
formation of a binding contract, then the statement is
tautologous. If by 'essential' one means only a term which
the Court regards as important as opposed to a term which
the Court regards as less important or a matter of detail,
the statement is untrue. It is for the parties to decide c
whether they wish to be bound and, if so, by what terms,
whether important or unimportant. It is the parties who are,
in the memorable phrase coined by the Judge, "the
masters of their contractual fate". Of course, the more
important the term is the less likely it is that the parties will
0
have left it for future decision. But there is no legal obstacle
which stands in the way of the parties agreeing to be bound
now while deferring important matters to be agreed later.
It happens every day when parties enter into so-called
'heads of agreement'."
E
The above principle has been consistently followed by the
English Courts in the cases of Mamidoil-Jetoil Greek
Petroleum Co. S.A. v. Okta Crude Oil Refinery AD, (2001) Vol.
2 Lloyd's Law Reports 76 at p. 89; Wilson Smithett & Cape
(Sugar) Ltd. vs. Bangladesh Sugar and Food Industries F
Corporation, (1986) Vol. 1 Lloyd's Law Reports 378 at p. 386.
In addition, Indian law has not evolved a contrary position. The
celebrated judgment of Lord Du Parcq in Shankar/al
Narayandas Mundade v. The New Mofussil Co. Ltd. & Ors.
AIR 1946 PC 97 makes it clear that unless an inference can
be drawn from the facts that the parties intended to be bound G
only when a formal agreement had been executed, the validity
of the agreement would not be affected by its lack of formality.
In the present case, where the Commercial Offer carries no
clause making the conclusion of the contract incumbent upon
H
864 SUPREME COURT REPORTS (2010] 1 S.CR.
A the Purchase Order, it is clear that the basic and essential
terms have been accepted by the respondent, without any
option but to treat the same as a concluded contract.
12. Though Mr. C.A. Sundaram, learned senior counsel
heavily relied on the judgment of this Court in Dresser Rand
B S.A. v. Binda/ Agro Chem Ltd., (2006) 1 SCC 751, the same
is distinguishable because in that case only general conditions
of purchase were agreed upon and no order was placed. On
the other hand, in the case on hand, specific order for 5
shipments was placed and only some minor details were to be
C finalized through further agreement. This Court in Dresser
Rand S.A (supra) rejected the contention that the acceptance
of a modification to the General Conditions would not constitute
the conclusion of the contract itself. On the other hand, in the
present case, after the suggested modifications had crystallized
D over several emails. Further in para 32 in Dresser Rand S.A
(supra) this Court held that "parties agreeing upon the terms
subject to which a contract will be governed, when made, is not
the same as entering info the contract itself' whereas in the case
on hand, the morrjent the commercial offer was accepted by
E the respondent, the contract came into existence. Though in
para 44 of the Dresser Rand S.A (supra), it is recorded that
neither the Letter 0t Intent nor the General Conditions contained
"
any arbitration agreement, in the case on hand, the arbitration
agreement is found in clause 6 of the Commercial Offer. In view
F of the same, reliance placed by the respondent on Dresser
Rand S.A (supra) is wholly misplaced and cannot be applied
to the case on hand where the parties have arrived at a
concluded contract.
13. Mr. Venugopal pointed out that the Charter Party
G Agreements are governed as per international shipping
practices. The normal procedure is that the brokers from both
sides first agree on the vital terms over phone/telex (these terms
relate to Freight, Type of Ship, Lay Can (Period of shipping),
Demurrage Rate, Cranes, etc.) At this stage, no agreement is
H formally signed but the terms are binding on both the parties,
-rRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 865
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J)
as per the Contract of Affreightment (CoA), which in the present A
case was entered into on the next day, i.e. 17.10.2007. Certain
minor modifications could go on from either side on mutual
agreement but in the absence of any further modification, the
originally agreed terms of the CoA are binding on both the
parties. Till the agreement is actually signed by both the parties, B
the term draft is used. This does not mean that the terms are
not binding as between the Petitioner and the Ship-owners.
Further, according to him, the existence of the Charter Party,
various international shipping practices etc. which are to be
pleaded in detail before the Arbitral Tribunal once it is c
constituted and not before this Court since this means extensive
quoting of shipping laws and decided cases which cannot be
done in the present arbitration petition. The above submissions
cannot be under estimated.
14. Both in the counter affidavit as well as at the time of D
arguments Mr. C.A. Sundaram, learned senior counsel for the
respondent has pointed out various differences between the
version of the respondent and the petitioner. However, a close
scrutiny of the same shows that there were1only minor
differences that would not affect the intention of the parties. It E
is essential that the intention of the parties be considered in
order to conclude whether parties were ad idem as far as
adopting arbitration as a method of dispute resolution was
concerned. In those circumstances, the stand of the respondent
that in the absence of signed contract, the arbitration clause F
cannot be relied upon is liable to be rejected.
15. Smita Conductors Ltd. vs. Euro Alloys Ltd. (2001) 7
SCC 728 was a case where a contract containing an arbitration
clause was between the parties but no agreement was signed
between the paties. The Bombay High Court held that the G
arbitration clause in the agreement was binding. Finally, this
I
'
I
Court upholding the judgment of the Bombay High Court held
that the arbitration clause in the agreement that was exchanged
between the"parties was binding.
16. In Shakti Bhog Foods Limited vs. Kola Shipping H
866 SUPREME COURT REPORTS [2010) 1 S.C.R.
A Limited, (2009) 2 SCC 134, this Court held that from the
provisions made under Section 7 of the Arbitration and
Conciliation Act, 1996 that the existence of an arbitration
agreement can be inferred from a document signed by the
parties, or an exchange of letters, telex, telegrams or other
B means of telecommunication, which provide a record of the
agreement.
17. It is clear that in the absence of signed agreement
between the parties, it would be possible to infer from various
documents duly approved and signed by the parties in the form
C of exchange of e-mails, letter, telex, telegrams and other means
of tele-communication.
18. Though, Mr. C.A. Sundaram, relied on several
decisions, in view of clear materials in the form of emails/
correspondence between the parties, those decisions are not
D germane to the issue on hand.
19. Before winding up, it is useful to refer the latest decision
of this Court about the object of Arbitration and Conciliation Act,
1996. In Great Offshore Ltd. vs. Iranian Offshore Engg. &
E Construction Co., (2008) 14 SCC 240, this Court while
considering the objects and provisions of the Arbitration and
Conciliation Act, 1996, held:
·59 The court has to translate the legislative intention
especially when viewed in light of one of the Act's "main
F objectives": "to minimize the supervisory role of courts in
the arbitral process." [See Statements of Objects and
Reasons of Section 4(v) of the Act.) If this Court adds a
number of extra requirements SUl..h as stamps, seals and
originals, we would be enhancing our role, not minimizing
it. Moreover, the cost of doing business would increase. It
G
takes time to implement such formalities. What is even
more worrisome is that the parties' intention to arbitrate
would be foiled by formality. Such a stance would run
counter to the very idea of arbitration, wherein tribunals all
over the world generally bend over backwards to ensure
H
TRI MEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 867
ALUMINIUM LTD, INDIA [P. SATHASIVAM, J.]
that the parties' intention to arbitrate is upheld. Adding A
technicalities disturb the parties' "autonomy of the will" (1'
autonomie de la volonte') i.e. their wishes. (For a general
discussion on this doctrine see Law and Practice of
International Commerical Arbitration, Alan Redfern and
Martin Hunter, Street & Maxwell, London, 1986 at pp.4 B
and 53.)
60. Technicalities like stamps, seals and even signatures
are red tape that have to be removed before the parties
can get what they really want-an efficient, effective and
potentially cheap resolution of their dispute. The autonomie C
de la volonte' doctrine is enshrined in the policy objectives
of the United Nations Commission on International Trade
Law (UNCITRAL) Model Law on International Commercial
Arbitration, 1985, on which our Arbitration Act is based.
(See Preamble to the Act.) the courts must implement ',o
legislative intention. It would be improper and undesirable
for the courts to add a number of extra formalities not
envisaged by the legislation. The courts' directions should
be to achieve the legislative intention.
61. One of the objectives of the UNCITRAL Model Law E
reads as under:
"the liberalization of international commercial
arbitration by limiting the role of national courts, and
by giving effect to the doctrine 'autonomy of will',
allowing the parties the freedom to choose how F
their disputes should be determined". [See Policy
Objectives adopted by UNCITRAL in the
preparation of the Model Law, as cited in Law and
Practice of International Commercial Arbitration,
Alan Redfern and Martin Hunter, Street & Maxwell, G
London (1986) at p. 388 (citing UN doc.A/CN.9/07,
Paras 16-27).] . .:. · '; ,· , ··. ;
. ~?~";·:·; /~ ~--._'. ~
62. It goes without saying, bufinth~ intr~st of providing
the parties a comprehensive revieW'cl 0,0ir arguments, I
tY . H
868 SUPREME COURT REPORTS [2010] 1 S.C.R.
A note that once it is established that the faxed CPA is valid,
it follows that a valid contract and a valid arbitration clause
exist. This contract, the faxed CPA, does not suffer from
a conditional clause, as did the letter of intent._,Jhus, the
respondent's argument that the parties were not ad idem
B must fail."
20. In view of the settled legal position and conclusion
based on acceptable documents, I hold that the petitioner has
made out a case for appointment of an Arbitrator in accordance
with Clause 6 of the Purchase Order dated 15.10.2007 and
C subsequent materials exchanged between the parties.
Inasmuch as in respect of the earlier contract between the same
parties, Justice B.N. Srikrishna, former Judge of this Court is
adjudicating the same as an Arbitrator at Mumbai, it is but
i:i1 oper and convenient for both parties to have the assistance
o of the same Hon'ble Judge.
21. Accordingly, Hon'ble Mr. Justice B.N. Srikrishna, former
Judge of this Court is appointed as an Arbitrator to 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
E 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
F 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 'lie above terms. No
costs.
D.G. Arbitration petition allowed.
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