http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

CASE NO.: Appeal (civil)  1427 of 2004

PETITIONER: National Aluminium Co. Ltd.

RESPONDENT: Gerald Metals SA

DATE OF JUDGMENT: 27/02/2004

BENCH: N Santosh Hegde & B P Singh

JUDGMENT: J U D G M E N T

(Arising out of SLP(C)No.3202 of 2004)

SANTOSH HEGDE,J.

       Heard learned counsel for the parties.

       Leave granted.

       This appeal arises out of a dispute between the parties to  this appeal which under an agreement between the parties has to  be referred to arbitration as contemplated under Clause 26 of  the agreement between the parties.

       Pending disposal of the said dispute by the arbitrators the  respondent herein moved an application under section 9(d) of  the Arbitration and Conciliation Act, 1996 praying for the grant  of ex parte injunction restraining the appellant herein from  transferring or alienating the earmarked alumina lying in the  appellant’s Silos in Vishakapatnam Port area to any party other  than the respondent herein.

       The said application was opposed by the appellant herein  on various legal and factual grounds including the  maintainability of the application as also the jurisdiction of the  trial court to make any interim order under the said provision of  the Act.

       The trial court after hearing the parties however  considered it appropriate to make the following interim order :

       "In the result, the application is allowed and the  respondent shall allow the despatch of cargo to the petitioner  immediately on payment of original price to the respondent,  and on providing bank guarantee for the difference of price  agreed between the petitioner and the respondent and the price  on which Alumna is being sold in the international market at  the latest, and the security shall lie with the court and the party  that wins in arbitral proceedings shall take it after disposal of  arbitral proceedings basing on the direction given therein. The  petitioner is ordered accordingly."

       An appeal filed by the respondent against the said order  of the trial court under section 37 of the 1996 Act before the  High Court of Judicature Andhra Pradesh at Hyderabad came to  be rejected. While doing so the High Court slightly modified

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

the order of the trial court in the following terms :

"1) The Gerald Metals shall be permitted to  lift 33,300 MT +/-  5% of Alumina on  payment of agreed rates, 2)      That in addition to agreed rates, the Gerald  Metals shall also give a bank guarantee of an  amount which is the difference between the  agreed rate and the rate of US $ 430 per MT  of Alumina in favour of NALCO. The bank  guarantee shall be furnished before the  Registrar (Judicial) of this Court to avoid  delay in the matter who shall transmit it to  NALCO. 3)      The bank guarantee shall be encashable by  NALCO if they succeed in the arbitration. 4)      No order as to costs."

        In this appeal various grounds both legal and factual have  been raised by the parties to this appeal in their pleadings as  well as in the arguments addressed on behalf of them. On facts of this case, we think it unnecessary to go into  these questions of fact and law even for the purpose of disposing  of this appeal which we intend doing it on the grounds of equity  and balance of convenience only. In that process, we think it  necessary that with a view to protect the interest of both the  parties to make some modifications in the impugned order. We  do so because of the fact that the claim of the respondent herein  is yet to be decided by the arbitrators. But in the meanwhile if the  respondent is not permitted to lift the goods in question it is  likely to be put to great hardship. At the same time, if appellant is  not allowed to collect the fair price of its goods it will be  deprived of the monetary value of the goods. The rights of the  parties to receive the goods and value payable will be ultimately  decided by the arbitrators. Therefore, we think it appropriate that  while the respondents should be permitted to take the goods, the  appellants should be paid as an interim measure the present value  of the goods. There seems to be some dispute with regard to the  present value of the goods. Since both the parties have produced  different valuation, we think it appropriate to fix the value of the  goods as fixed by the High Court at US $ 430 per MT. On that  basis, we, in modification of the orders of the courts below, direct  the appellant to permit the respondent to remove from their Silo  at Vishakapatanam balance of quantity of Alumina agreed to be  sold to the respondent on it receiving its value fixed by way of  this interim order at the rate of US $ 430 per MT. On receipt of  such value from the respondent, appellant will start loading the  goods not later than 7th March, 2004.  In the meantime the parties  will exchange necessary documents and also complete all  procedural formalities for the purpose of loading and exporting   the  goods  within  the date  stipulated  hereinabove.  However, the respondent apart from the interim value  fixed by us will also furnish a bank guarantee to the satisfaction  of the Registrar General of this Court for a sum equivalent to the  difference in value as claimed by the appellant and value now  fixed by us i.e. at the rate of US $ 31.80 per MT within a week  from today.  [US $ 460.80 \026 US $ 430]           The appellant in turn, will give an undertaking signed by its  authorised officer to this Court undertaking to pay all sums which  may become payable by it under the award within 6 weeks from  the same becoming payable. This undertaking shall be filed with  the Registry of this Court within 4 weeks from today.            The above arrangement is interim in nature and is subject to  the award that may be made in the arbitration proceedings.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

         We make it clear that we have not expressed any opinion  on the legal arguments raised in this appeal nor on the factual  issues except to the extent of the interim arrangement made  hereinabove.  

       With the above modifications this appeal is disposed of.