Adit Singh, Ms. Aishwarya Modi, Mr. A. Fazelbhoy and Ms. Chahat Arya, Advocates v. STEEL AUTHORITY OF INDIA LTD

Judgment

1. These cross-appeals have been filed under Section 37(1)(c) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the “A&C Act”), challenging the judgment dated 28.02.2019 (hereinafter referred to as the “Impugned Judgment”) passed by the learned Single Judge in OMP No. 76 of 2015. The said petition was filed by the Steel Authority of India Limited (hereinafter referred to as “SAIL”) under Section 34 of the A&C Act, assailing an arbitral award dated 20.08.2014 (hereinafter referred to as the “Original Award”) rendered by an Arbitral Tribunal comprising of three arbitrators: Capt. Satish P. Anand (Presiding Arbitrator), Capt. S.M. Berry, and Mr. Niranjan Chakraborty (hereinafter referred to as the “Arbitral Tribunal”). 2. By the Original Award, the Arbitral Tribunal awarded a net sum of USD 14,049,506.74, which was determined after deducting a 2.5% commission payable to the Charterers and a 1.25% brokerage fee. Additionally, the Arbitral Tribunal awarded an amount of USD 100,000.00 towards legal fees and expenses. The costs of the arbitration, including fees and expenses of the arbitrators and administrative fees of the Indian Council of Arbitration, were fixed at INR 19,60,000. Furthermore, an amount of INR 4,90,000 was awarded to be paid to each arbitrator in accordance with Indian Council of Arbitration rules, and an additional INR 4,90,000 was awarded towards Indian Council of Arbitration administrative fees. Additionally, the Tribunal awarded interest at the rate of 6% per annum from 01.12.2012, until the publication of the award on the net sum of USD Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 14,049,506.74, and thereafter at 6% per annum until the total awarded amount is fully paid. 3. In the proceedings under Section 34 of the A&C Act, SAIL highlighted that the Arbitral Tribunal had not provided reasoning for its conclusions on certain issues. In light of this, the learned Single Judge, on

22.02.2017, directed the Arbitral Tribunal to reconvene and provide reasons in respect of the specified issues. Complying with this directive, the Arbitral Tribunal passed an Additional Award on 10.06.2017 (hereinafter “Additional Award”) detailing its reasoning for the specified issues of the Original Award. Hereafter, the Original Award and the Additional Award will collectively be referred to as the “Impugned Award.” 4. The learned Single Judge partly allowed SAIL’s petition and set aside the impugned award to the extent of damages computed for the quantity of coal that would have been shipped after the termination of the Agreement till December 2012. It was held that the agreement stood validly terminated by SAIL vide communication dated 11.09.2012 under Clause 62 of the Agreement. The learned Single Judge made the following observations in the impugned Judgement – “63. Having said so, the Arbitral Award, insofar as it awards damages for the quantity of coal that would have been shipped after the termination of the Agreement till December 2012, cannot be sustained as the exercise of power by the petitioner under Clause 62 of the Agreement has been held to be valid in this order. 64. As the shipment was to be made on “evenly spread per month basis”, the amount due to the respondent would be reworked by taking the Shipment quantity that was due till the date of termination of the Contract.”

5. Additionally, the learned Single Judge modified the award of interest in line with the Hon’ble Supreme Court’s decision in Vedanta Ltd. v. Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 Shenzen Shandong Nuclear Power Construction Co. Ltd, 2018 SCC OnLine SC 1922, setting it at the London Inter Bank Offered Rate (LIBOR). 6. M/s. Seaspray Shipping Co. Ltd. (hereafter Seaspray) has assailed the impugned judgment to the extent that the Impugned Judgment has reversed the Arbitral Tribunal’s decision that SAIL was not entitled to terminate the COA under Clause 62 and set aside the damages awarded for the period following the termination. Additionally, Seaspray contests the interest rate modification from 6% per annum, to the rate granted by the Supreme Court in Vedanta (supra). 7. SAIL has also appealed the impugned judgement to the extent that the learned Single Judge has upheld the impugned award to the extent it awards damages for the period before termination of the Contract. According to SAIL, the same contravenes Section 73 of the Indian Contract Act, 1872 (hereinafter “ICA”). 8. The present case involves dispute arising from the Contract of Affreightment (hereafter referred to as the “COA”) dated 04.12.2007. The contract was executed between Seaspray, referred to as the ‘Owners’, and SAIL, referred to as the ‘Charterers’. The COA pertains to the shipment of coking coal from Queensland, Australia, to the East Coast of India, covering a shipment period from April 2008 to December 2012. This period was extendable up to three months, at the discretion of SAIL, until March 2013.

FACTUAL BACKGROUND

9. Seaspray is a company duly incorporated under the laws of the United Kingdom and maintains its principal place of business at 5 Charterhouse Square, London EC1M 6EE, U.K. It operates a fleet of vessels and, in the Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 course of its business activities, engages in the chartering of ships or provides vessels under contracts of affreightment. SAIL is a public sector company owned and controlled by the government of India. It has its office at Central Marketing Organisation, Ispat Bhavan (6th Floor), 40 Jawahar Lal Nehru Road, Kolkata - 700071. The company specializes manufacturing and marketing iron and steel products and relies on coking coal as a primary raw material for its steel plants. The shipping requirements of SAIL are arranged by Transchart, a division of Ministry of Shipping, Government of India. 10. On 04.12.2007, Seaspray and SAIL entered into the COA, which was later amended by Addendum No. 1 on 29.06.2010. Under the COA, SAIL was obligated to transport 2,000,000 metric tons (±5% at SAIL’s option) of bulk coking coal from Queensland, Australia, to India’s East Coast using Handymax vessels provided by Seaspray. The shipments were to be evenly distributed throughout the contract period, with parcel sizes between 45,000 to 52,000 metric tons (±5% at Seaspray’s discretion). 11. The COA required the transportation of 2,000,000 metric tons (±5%) of coking coal from April 2008 to December 2012, with an option for SAIL to extend the period to March 2013. 12. The COA was amended at SAIL’s request via Addendum No. 1, dated

29.06.2010. Addendum No. 1 allowed SAIL to load Panamax shipments (75,000 metric tons ±5%) instead of Handymax shipments, reduced the freight rate for Panamax shipments from USD 40.00 to USD 34.00 per metric ton, lowered the additional freight for a second discharge port, and expanded the loading area to include ports in New South Wales. Seaspray agreed to these changes. Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019

13. Disputes arose between the parties due to non-supply of cargo under the COA by the SAIL. Seaspray asserts that SAIL has only transported 881,204.80 metric tons out of the required 2,000,000 metric tons (±5%) under the COA. 14. The last cargo shipped by SAIL was the 15th shipment in early May

2011. After this, SAIL ceased further deliveries, resulting in an outstanding balance of 1,118,795.20 metric tons scheduled for transport between June 2011 and December 2012. This left an average monthly shipment volume of approximately 58,883.96 metric tons that remained undelivered. 15. Communications between Seaspray and SAIL were facilitated by Sujora Shipping Pvt. Ltd, New Delhi (SAIL’s chartering brokers), while Seaspray’s emails were managed by Chios Navigation (Hellas) Ltd, Seaspray’s ship management agent. 16. On 06.05.2011, Seaspray, through Brokers, emailed SAIL that the 16th cargo under COA was due in June 2011 and requested a suitable stem. SAIL did not respond. Subsequent emails were sent by Seaspray through Brokers on 25.05.2011, 01.06.2011, and 28.06.2011, reiterating the request for the 16th cargo and noting SAIL’s frequent entries into the spot market for June/July stems. Again, SAIL did not reply. 17. Seaspray addressed the issue again via email on 04.07.2011 and, more specifically, emphasised SAIL’s entry into the spot market with two 75,000- ton stems for late July from Queensland and SAIL’s non-compliance with the COA terms. On 21.07.2011, Seaspray learned that SAIL had fixed a cargo from Australia to India for a third party, contrary to the COA. 18. SAIL remained unresponsive despite further reminders for the 16th and 17th cargo/stem. Seaspray continued to protest SAIL’s non-compliance, Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 particularly as SAIL was engaged in spot market deals for other cargoes, which violated the COA terms. 19. On 19.10.2011, Seaspray, through its London solicitors, sent a legal notice to SAIL by e-mail and courier, setting out the breaches committed by SAIL under the COA and claiming approximately USD 2.25 million for the 16th and 17th cargoes. 20. SAIL replied to the legal notice denying all Seaspray’s claims and alleging that Seaspray itself has been in breach of the COA. By e-mail dated

03.11.2011, Seaspray submitted their claim of USD 929,958.75 for the 18th shipment based on the prevailing market rate. 21. On 18.11.2011, Seaspray sent a notice of Arbitration Under Clause 60 of the COA through its lawyers by e-mail and hand delivery to the Indian Council of Arbitration and SAIL, respectively, resulting in the initiation of the arbitral proceedings between Seaspray and SAIL. ARBITRATION PROCEEDINGS

22. On 22.05.2012, Seaspray filed a Statement of Claim, alleging that SAIL had failed to supply cargo as per the COA. Subsequently, on

11.09.2012, SAIL reduced the shipment quantity by 5%. On the same day, SAIL sent another fax message terminating the Agreement, citing the “Default Clause,” which led to a dispute. Seaspray contended that SAIL had no unilateral right to terminate the Agreement, while SAIL argued that such a right was provided under Clause 62 of the COA. SAIL filed a Statement of Defence on 21.09.2012, and Seaspray submitted a rejoinder on 03.01.2013. SAIL further filed an application under Section 16 of the A&C Act on Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019

22.09.2012. Seaspray filed their reply to the Section l6 application on

07.01.2013. 23. Seaspray’s claim in its statement of claim sought damages for the non-supply of 1,118,795.20 metric tons (MT) of cargo from June 2011 to December 2012. For the period from June 2011 to March 2012, they sought damages for 10 shipments totalling 588,839.60 MT, with a total claim of USD 7,830,742.02 after a 2% reduction. For the period from April 2012 to December 2012, they claimed damages for 9 shipments totalling 529,955.64 MT, with a total claim of USD 8,439,543.57 after a 2% reduction. The combined claim for both periods amounted to USD 16,270,285.59. Seaspray also sought 10% annual interest on the claimed amount and arbitration- related costs. 24. Seaspray alleged that SAIL failed to supply the cargo despite multiple requests and instead entered the spot market for shipments that should have been delivered under the COA. They provided instances where SAIL fulfilled third-party contracts instead. 25. SAIL contended that COA was a service contract and not a valid agreement, and that the dispute did not fall under maritime arbitration. They terminated the COA on 11.09.2012, backdating it to April/May 2011 due to non-supply, citing economic slowdown and force majeure. They argued that Seaspray could not claim unearned profits without actual loss and that the COA was obsolete and impractical. SAIL argued that the Seaspray was merely an arranger of vessels and not entitled to any portion of the freight payable to the vessel owner. They emphasized that Seaspray was not the vessel owner under the agreement and had not notified or kept any vessels idle for the contract. SAIL also cited force majeure as ground for cancelling Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 the agreement and argued that the claim was a civil matter and, hence, outside the scope of maritime arbitration. 26. In their rejoinder, Seaspray refuted SAIL’s defences, stating that the contract terms were unambigous. Seaspray countered the SAIL’s argument that the vessels provided were not owned by Seaspray, arguing that the contract explicitly allowed for the vessels to be owned, managed, chartered, operated, or otherwise controlled by Seaspray. Consequently, ownership of the vessels was not necessary, and Seaspray had arranged the vessels as per the contract terms. It was further argued that COA is clear and falls within the definition of a ‘maritime dispute,’ governed by the Maritime Arbitration Rules of the Indian Council of Arbitration. Seaspray countered the force majeure defence, noting it was lifted before the SAIL’s first default and did not affect the contract’s performance. Additionally, Seaspray asserted that Clause 62 of the COA, cited by the SAIL, was irrelevant and could not be used to justify the breach of contract. Seaspray claimed their loss was the profit they would have earned if the contract had been performed. 27. Regarding the application of SAIL under Section 16, SAIL contended that the claim was not a maritime dispute and should be handled in a different forum. SAIL further contended that SAIL was not a signatory to the COA, which was signed by Transchart and not by SAIL. Seaspray countered by asserting that the SAIL’s application should be dismissed because it was filed after the SAIL had already submitted its statement of defence. Seaspray further emphasized that the arbitration clause in COA clearly stated that disputes should be settled under the Maritime Arbitration Rules, and the current dispute arose from SAIL’s failure to provide cargo and compensate Seaspray. It was also argued that a contract signed by an Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 agent on behalf of the SAIL made the SAIL a party to the contract. They referred to Section 7(4) of A&C Act, which considers an arbitration agreement in writing if it is contained in a document signed by the parties, including agents acting on their behalf. 28. After the pleadings were completed, the first hearing was scheduled for 04.07.2013 and 05.07.2013 at the Indian Council of Arbitration in New Delhi. 29. The issues for determination, as set out in the impugned award, are reproduced below:-

71.1 Whether, in view of the Respondent allegation (denied by the Claimant) that the agreement dated 04.12.2007 was not entered into and signed by the respondent, the arbitration would be maintainable between the Claimant and the Respondent? 71.2 Whether the dispute raised by the Claimant can be classified as a maritime dispute? 71.3 Whether the agreement dated 04.12.2007 can be treated as a “Contract of Affreightment?” 71.4 Whether the “Contract of Affreightment” was to come into being after nomination of vessel was asked for and the nominated vessel was accepted by the charterer on fulfilment of the conditions as per clause 5 of the agreement dated 04.12.2007? 71.5 Whether for the reasons alleged in paragraph l(k), para 9 of page 21 of the reply and para 10 of the additional reply, the hiring of vessels through the claimant for the years Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 2008-2009 was rendered almost impossible thus excluding the respondent from all performance? 71.6 Whether termination of agreement dated

04.12.2007 was valid in view of Clause 62 of the agreement? 71.7 Whether the claim of the Claimant is maintainable, in view of clause 62 of the agreement dated 04.12.2007? 71.8 Whether, in view of the section 73 Indian contract Act, the claimant can seek damages without proving the actual loss suffered as alleged in Para 19 of the respondent’s reply? 71.9 Whether the extreme weather conditions occurred in Australian ports around December, 2010 gave rise to force majeure within the meaning of clause 61 of the agreement? 71.10 Whether the claimant is entitled to an Award in the sum claimed or any other amount? 71.11 Whether the claimant is entitled to the interest and costs as claimed?” IMPUGNED AWARD

30. One of the principal controversies before the Arbitral Tribunal was whether the arbitration between Seaspray and SAIL would be maintainable, based on SAIL’s allegation that the COA had not been entered into and signed by SAIL. 31. The primary conclusion reached by the Tribunal was that the SAIL, having provided 15 cargoes/stems under the COA and made full payment up to the 15 cargoes to the Seaspray, could not legally disown the COA and Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 evade the consequences of breaching its terms. Consequently, the Tribunal observed that SAIL was bound by the terms of the COA, including Clause 60 thereof. 32. The Tribunal observed that SAIL had cited the case of Indowind Energy Ltd vs. Wescare (India) Ltd and Others, (2010) 5 SCC 306. The Tribunal held that this case was distinguishable from the case at hand, as the SAIL was clearly named as a party in the COA and had acknowledged and performed the COA by accepting 15 shipments. 33. As per the impugned award, the COA explicitly referred to the agreement between Seaspray Shipping Ltd. and SAIL, and signed by Mr. S. Chandrasekaran, Chartering Officer, Ministry of Shipping, Govt. of India, for and on behalf of SAIL. The Addendum No. 1 dated 29.06.2010 had also been similarly signed. SAIL had not challenged the authority of the Chartering Officer or the validity of the COA’s execution. It was further observed that an email from SAIL dated 08.09.2011 acknowledged the intention to perform its obligations under COA despite options to discontinue, and the SAIL had made payments for 15 shipments. The Tribunal found no merit in the SAIL’s contention that it was not a party to the COA or the arbitration agreement and rejected this argument. 34. SAIL had also argued that the disputes under the COA were not maritime disputes and that the COA was not a maritime contract. However, Rule 7 of the Maritime Rules clearly included disputes related to contracts of affreightment. Therefore, the Tribunal disagreed with the SAIL’s argument. The term “contract of affreightment” (COA) referred to long-term arrangements for the supply of shipping space over multiple voyages. The Tribunal held that the COA was a “Contract of Affreightment” and a Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 maritime contract. The disputes arising under this COA were maritime disputes, and the arbitrators had the jurisdiction to entertain and decide on these disputes as per Clause 60 of the COA. 35. SAIL’s argument that the COA was not a contract but merely an agreement was also rejected. The Arbitral Tribunal noted that according to Section 2(h) of the ICA, a contract is an enforceable agreement. COA specified the obligations of both parties and did not leave any essential terms undecided. 36. SAIL cited several judgments, including Union of India vs. Maddala Thathiah and others, to contend that the COA lacked binding force. However, these cases were held to be distinguished by the Arbitral Tribunal. The Arbitral Tribunal observed that COA represented a mutual commitment by both parties to specific terms, making it a binding contract. 37. Another issue that the Arbitral Tribunal considered in detail was whether the hiring of vessels through Seaspray for 2008-2009 was rendered impossible, excusing the SAIL from all performance. SAIL argued that due to cheaper ships available in the spot market, the COA had become ‘impossible’ to perform, citing an economic example. However, this argument was rejected as it contradicted the principle of a binding contract. 38. SAIL claimed that a global economic slowdown, a reduction in Handymax parcels, and a fall in spot freight rates made the COA financially unviable. They claimed that the contract had become impossible under Section 56 of the Indian Contract Act. 39. Seaspray countered that COA was still a binding contract despite market changes. The Arbitral Tribunal found that the SAIL’s arguments did not satisfy the criteria for impossibility of performance, as the changes were Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 not beyond what the parties could have anticipated. The Arbitral Tribunal also noted that SAIL had continued to perform similar contracts during the alleged force majeure period and had not formally declared force majeure under the COA. 40. The Arbitral Tribunal concluded that SAIL was in clear breach of the COA and awarded damages to Seaspray, including interest and costs, for the unshipped quantity. Additionally, Seaspray was awarded interest at 6% per annum from 01.12.2012, and costs of USD 100,000, along with arbitration costs fixed by the ICA. 41. However, the Arbitral Tribunal did not provide any reasoning for the conclusions drawn in respect to the issues set out in paragraphs 71.5 to 71.7 of the award, which was later pointed out in the petition filed by SAIL against the Original Award under Section 34 of the A&C Act. During the said Proceedings, the learned Single Judge observed, in an order dated

22.02.2017, that the Arbitral Tribunal had not provided reasons for its conclusions in paragraphs 71.5 to 71.7 of the Award. Consequently, the Court directed the Arbitral Tribunal to reconvene and furnish reasons for its conclusions on these specific issues. 42. In compliance with these directions, the Arbitral Tribunal issued an Additional Award on 10.06.2017, providing the required reasons for the conclusions in paragraphs 71.5 to 71.7 of the Award dated 20.08.2014. 43. The Arbitral Tribunal held that Clause 62 of the COA should be interpreted in the context of the Agreement’s other provisions and applied only to circumstances constituting frustration of the Agreement, specifically targeting the coal supplier in Australia rather than SAIL. The Tribunal also concluded that even if Clause 62 did empower SAIL to unilaterally Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 terminate the Agreement, the notice dated 11.09.2012 could not be considered a valid notice under Clause 62, rendering the termination invalid. Regarding consequential damages, the Tribunal found that Seaspray did not need to hire a vessel to prove its damages and, based on market rates at the Baltic Exchange Fixture for the remaining quantity, awarded damages in favor of the Seaspray. THE IMPUGNED JUDGMENT

44. The first issue addressed by the court was whether the Arbitral Tribunal correctly concluded that the COA dated 04.12.2007 was a binding contract between the parties, rather than a Memorandum of Understanding or a preliminary Agreement to enter into a future contract. The learned Single Judge observed that Clause 1 of the Agreement specified the quantity and parcel size of Coking Coal to be shipped from Queensland, Australia, to the Eastern Coast of India. Clause 2 outlined the shipment period, which extended from April 2008 to December 2012, with a possible extension to March 2013. Clauses 3 and 4 detailed the vessels to be used, Clause 5 provided the procedure for vessel nomination, and Clause 6 specified the loading and unloading parameters. The Court held that these terms clearly indicated that the Agreement was intended to be a binding contract, not a mere Memorandum of Understanding or an agreement to agree in the future. The Court observed that the Original Award dated 20.08.2014 supported this conclusion, and there was no reason to interfere with this finding. 45. Regarding the interpretation and effect of Clause 62 of the Agreement, the Court observed that Clause 61 was the Force Majeure Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 Clause, which deferred obligations under the Agreement due to various extraordinary events. Clause 62, the Default Clause, allowed for the termination of the Agreement if the Suppliers/Charterers failed to perform their obligations. The Court observed that Clause 62 of the Agreement explicitly allows SAIL to terminate the contract for convenience if the contract fails “in any manner or otherwise.” The Court also dismissed Seaspray’s argument that the use of “Suppliers/Charterers” in Clause 62 creates ambiguity, affirming that the term solely refers to the SAIL and does not affect the clause’s validity. Thus, the Tribunal’s interpretation of Clause 62 as only applying to frustration events was held to be unsustainable. 46. The Court also noted that the SAIL’s letter dated 11.09.2012 clearly conveyed its intent to terminate the Agreement under Clause 62. Contrary to the impugned award’s observation that the termination lacked a positive declaration, the Court found that the letter unequivocally indicated the Agreement’s termination. The Court held that the termination was valid and became effective upon its communication to Seaspray on 13.09.2012. 47. However, the Court observed that letter could not terminate the Agreement retroactively, as Clause 62 does not grant SAIL the authority to do so. Therefore, the termination was effective only from 13.09.2012. While upholding the Tribunal’s observation pursuant to Section 73, read with Illustrations (a), (d), and (g) of the Indian Contract Act, 1872, for loss of expected profit prior to the contract termination, the Court held that SAIL was liable to pay damages for the period before the termination, i.e., prior to

13.09.2012. The Court stated that since shipments were to be made on an “evenly spread per month basis,” the amount due to Seaspray should be Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 recalculated based on the shipment quantity owed up until the date of the Contract’s termination. 48. The objection raised by SAIL regarding the rate of interest awarded on the amount was allowed by the learned Single Judge in view of the decision of the Supreme Court in Vedanta Limited v. Shenzhen Shandong Nuclear Power Construction Co. Ltd. (Supra). The learned Single Judge set aside the interest awarded by the Arbitral Tribunal and awarded interest at the London Interbank Offered Rate (LIBOR). SUBMISSIONS

49. In challenging the Impugned Order, Seaspray argues that the Hon’ble Court substituted the Arbitral Tribunal’s interpretation with its own by asserting that Clause 62 of the COA unambiguously grants SAIL an unfettered right to terminate the agreement. Seaspray contends that the Tribunal’s interpretation of Clause 62 was justified because a literal reading of the clause would lead to absurd results, such as allowing a “Supplier,” who is not a party to the COA, to terminate the agreement. Seaspray emphasizes the Hon’ble Court assuming “Suppliers/Charterers” referred solely to SAIL when the COA clearly distinguishes between the physical suppliers of coal in Australia and SAIL as Charterers. Seaspray asserts that when a literal interpretation leads to an absurdity, a purposive construction should be adopted to ensure the agreement’s provisions make sense within the entire context. 50. Seaspray further argues that the Hon’ble Court failed to appreciate that the Tribunal’s construction of Clause 62 was reasonable and provided coherent meaning to all the words in the clause, including “Supplier.” Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:15.04.2025 14:19:18 FAO(OS) (COMM) 109/2019 & FAO(OS) (COMM) 144/2019 Seaspray clarifies that the Tribunal did not deny the existence of a termination for convenience clause but questioned the applicability of Clause 62 under the specific circumstances of the COA due to its ambiguity. Seaspray maintains that Clause 62 cannot be considered a clear and unambiguous clause. In support of the said contention Seaspray has relied upon the judgements in Central Bank of India Ltd, Amritsar v. Hartford Fire Insurance Co. Ltd. AIR 1965 SC 1288, Her Highness Maharani Shantidevi P. Gaikwad v. SavjibaiHaribhai Patel and Ors. (2001) 5 SCC 101, M/s Darrameks Hotels & Developers Pvt. Ltd. v. M/s Altus Group India Pvt. Ltd. 2018 SCC OnLine Del 9335 and Pipavav Energy Pvt. Ltd. v. Madhavi Procon Pvt. Ltd. 2018SCC OnLine Del 13100. 51. Seaspray also contends that the Tribunal’s interpretation of Clause 62 was both reasonable and plausible. Therefore, the Hon’ble Court’s interference was unwarranted given the limited scope of review under Section 34 of the A&C Act. Seaspray emphasizes that Courts should not interfere with an arbitral tribunal’s interpretation of a contractual provision if it is plausible, even if it is not the preferred interpretation. In this regard, reliance is placed on Sudarsan Trading Co. v. Government of Kerala and