Calcutta High Court Upholds Arbitral Award Against Neo Metaliks In Lam Coke Supply Contract Dispute

The Calcutta High Court has upheld an arbitral award in favour of Orissa Metaliks Pvt Ltd, dismissing Neo Metaliks Ltd's appeal arising from a dispute over a Lam Coke supply contract. The court found no perversity or patent illegality in either the arbitral award or the earlier judgment refusing to set it aside. 

A Division Bench of Justices Debangsu Basak and Md. Shabbar Rashidi upheld the arbitral award and affirmed the Single Judge's judgment of January 6, 2025. The Court said that the award was reasoned, considered the parties' contentions, and could not be termed perverse.

"Likewise, the learned Single Judge dealt with the contentions raised before it in the impugned judgment and order dated January 6, 2025. Appellant did not establish the impugned judgment and order dated January 6, 2025 to be perverse. The appellant did not establish the award dated October 16, 2023 to suffer from any patent illegality.", the court ruled.

The dispute arose out of a February 22, 2022 contract under which Neo Metaliks agreed to purchase 10,000 MT of Lam Coke from Orissa Metaliks. After disputes over opening of the Letter of Credit and subsequent consent orders dated April 28, 2022 and May 20, 2022, the parties referred their disputes to arbitration.

Neo Metaliks argued that the arbitrator had failed to decide the core issue of breach of the original contract and had wrongly awarded damages on the counterclaim. Orissa Metaliks however contended that Neo Metaliks breached the consent orders by failing to amend the Letter of Credit despite repeated requests and that it remained ready and willing to supply the contracted quantity.

The Court observed that the Orissa Metaliks had repeatedly sought amendment of the Letter of Credit through email but the appellant went 'on killing time' on one pretext or another despite the respondent consistently expressing readiness to supply the agreed quantity of goods.

"However, the same was never carried out by the appellant. It went on killing time on one or the other pretext and therefore the appellant was held to be guilty for the breach. It is admitted position that the respondent, on every occasion, expressed its readiness and willingness to supply the agreed quantity of goods.", the court ruled.

Reiterating the limited scope of interference under Section 34, the Court held that judicial intervention in arbitral matters is confined to the statutory grounds and the Single Judge rightly declined to interfere with the award.

"In view of the discussions made hereinbefore as well as in consideration of the provisions of Section 37 of the Arbitration and Conciliation Act, 1996, we are not in a position to arrive at a conclusion that in passing the impugned judgment and order, the learned Single Judge failed to exercise its jurisdiction or exceeded the jurisdiction vested in it under Section 34 of the Act of 1996.", the court ruled.

Finding that  Neo Metaliks failed to establish that either the arbitral award or the Single Judge's judgment suffered from perversity or patent illegality, the Court dismissed the appeal. 

For Appellant: Pranit Bag, Arjun Ray, Piyush Agrawal, Shrivalli Kajaria, Saloni Kumar, Advocates 

For Respondent: S. N. Mookherjee, Krishnaraj Thaker, Sr. Advocates, Debrup Bhattacharya, Yash Singhi, R. N. Ghose, Pritha Ghose, Shusna Santra, Advocates