LexRENUSAGAR POWER COMPANY LTD. versus GENERAL ELECTRIC COMPANY AND ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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RENUSAGAR POWER COMPANY LTD.
v.
GENERAL ELECTRIC COMPANY AND ANR.
August 16, 1984
[V. D. TULZAPURKAR AND R. S. PATHAK, JJ.]
Foreign Awards (Recognition and Enforcement) Act, 1961 Section 3,
scope of-Whether an earlier suit in the nature of a petition ur.der section 33
•f the Indian Arbitration Act, 1940 could be stayed on a petition under section
3 of the Foreign Awards Act, (a petition the nature of a petition under sectl9n
34 of the Indian Arbitration Act).
Interpretation of Statutes-Foreign Awards (Recognition and Enforce-
ment) Act, 1961-Interpretation of Act calculated and designed to subserve the
cause of facilitaring international trade and promotion and providing speedy
settlement of disputes arising in such trade-Any expression or phrase In the
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Act must receive an liberal construction consistent with its· liberal and gram-
matical sense.
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Scope1purview of the Arbitrr~l Clause in Article XVIII in the contract-
Jurisdiction of an Arbitratar to decide the Umits of his own jurisdlctian-
Whether a dispute inclusive of the arbitrators' jurisdiction comes within the
scope of purview of Arbitration Clause, primarily depends on t/1e terms of the
Arbitration Clause.
Issuance of pramlssary notes further supported by Bank guarantee by the
buyer towards the purchase price under the contract itself and not by way of
separate contract, whether discharges the obligation to pay the purchase price-
Whether; the claims for the "Unpaid Reg1tlar 111terest, Delinquent Interest and
Compensatory Damages" be said to be" not arising out .. of the
~ontract" and,
therefore, not referable to Arbitration.
Wards andphrase~-''Arising out of", in relation ta", "in consequence
of", "concerning", ''relatlng to", are expressions of widest amplitude and
content and include even questions as to existence, validity scope and effect of
Arbitration ay rc?ement.
Negatloble lnstruments-Nigotiable instruments taken on account oj
debt whether operates as absolute discharge or not is a question of intention of
parties-Bil/ or Promissory notes can never go in discharge of debt unl•s it
11 specified as a part of contract that It shall be so.
The first respondents Geoer~J 2l~tric Com,panr, a <_::ompan)' incor ..
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RBNUSAGAR CO. v. GENERAL ELECTRIC CO •.
433
porated under the laws of the State of New York, USA, on a contract in
writing dated August 24, 1964 agreed to sell, to the appeUant Renusagar
Power Company Ltd., equipment for a tberma1. electric generating p!ant
to be erected at Renukoot on the terms and conditions set out therein.
Work to be performed under the
contract included supply of equipment
spare parts and services for which a sum of$ 13, 195,000 being the total
purchase price and otherwise called the ~·contract Base Price" was payable
by Renusagar in lawful currency of the USA in tho manner stipulated in
the contract.
Under the contract, the parties intended completion of (a)
the delivery of the equipment and spare parts etc. within t S months of the
Contract Effective Date {December 31, 1964) i.e. upto March 30, 1966;
{b) the erection of the plant withia 16th to 30th moath (i.e. from April
!, 1966 to June 30, 1967); so that (c) the plant \.ould be fully operatio-
nal by the end of 30th month from the Contract Effective Date i.e. by July
1, 1977.
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The partie,, therefore, agreed. (a) that substantial payment of the
purchase price by Renus1gar should commence when the plant became
operational i.e.
June 30, 1967; (b) that no interest would be payable
during: the delivery period; le) that interest sbatJ be paid during the erection
period and thereafter till payment but the interest during the erection
period would be capitalised and added on to the principal; (d) that initially
teit per cent of the tctal Contract Base Price ($ 1,319,500) should be
pilid either in cash or by mf:ans of a Letter of Credit within 30 days of
. the Contract Effective Date and that the balance of 90% of the purchase
price plus interest at 6!% per. annum from 16th to 30th month aggre ..
gating to US$ 11,116,058,15 <t 11,815,SOO for principal plus$ 900.SS8,
75 being the capitalised interest at the aforesaid rate for the aforesaid
period) should be paid in accordance with the schedule of payments set
ou~
in the contract.
The schedllle for tho payment of the said bala n:::e of 90 %
of the purchase price provided for payment to be made in sixteen six-
monthly instalments orExcerpt shown. Read the full judgment & AI analysis in Lexace.