This case the dispute between the parities contract termination against the agreement dated 04.12.2007.
The Charterer had engaged the service owners(Seaspray Shipping) to ship a cargo of 2000,000 MT of Cocking in From Australia to East Coast In India. The shipment period was April 2008 to Dec 2012. Evenly spread per month basis.
The Dispute due to non supply of cargo under the this agreement, which leading to invocation of Arbitration by Charterer terminated this agreement by Invoking “ Default Clause” in the agreement.
The Owner filed claims before the Arbitral Tribunal, The Arbitral Tribunal awarded that the termination of the contract was invalid and the responded was entitled to damages of USD 14,596,890.11, The same should pay after deducting the commission and the brokerage. And also the interest of 6% is applicable with effect 01st Dec 2012 till the date of the payment.
The charterer filed petition in the Delhi High Court challenging the arbitration tribunal the above said award
Frustration of Agreement:
“A frustrated contract is a contract that, subsequent to its formation, and without fault of either party, is incapable of being performed due to an unforeseen event (or events), resulting in the obligations under the contract being radically different from those contemplated by the parties to the contract”
“62. DEFAULT:
Should Suppliers/Charterers fail to provide materials for shipment or to ship the materials by the time or times agreed upon or should Suppliers/Charterers in any manner or otherwise fail to perform the contract or should a receiver be appointed on its assets or make or enter into any arrangements or composition with creditors or suspend payments (or being a company should enter into liquidation either compulsory or voluntary), the Suppliers / Charterers shall be entitled to declare the contract as at an end without any liabilities on either side.”
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Having held that Clause 62 of the Agreement empowers the petitioner to terminate the Agreement at its convenience,
As the supplier unable to supply the goods, which we will treated the frustration of the agreement the agreement will be void. Hence the damage of claim should be rejected.
Business Management 