Tue. Nov 24th, 2020

State Trading Corporation Of … vs Helm Dungemittel Gmbh & Anr on 30 May, 2018

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2. The challenge in this appeal is to the judgment of the learned Single
Judge dated 10.08.2016 by which the objections to the Award filed by
the appellant herein stand dismissed.

3. Some necessary facts which are required to be noticed for the disposal
of this appeal are that the appellant had floated a tender for supply of
bulk prilled/granular Urea on 17.09.2008. The tender of the
respondent no.1 herein was accepted being the lowest. A Letter of
Intent was issued on 25.09.2008 for supply of 3,00,000 Metric Tons
(in short „MTs‟) of Urea. As noticed by the learned Single Judge,
State Trading Corporation (hereinafter referred to as „STC‟) sought
confirmation from Department of Fertilizers, Government of India
(hereinafter referred to as „DOF‟ for permitting STC the flexibility to
place orders and receive shipment of 3,00,000 +/- 10% MTs of bulk
prilled/granular Urea. The parties signed a Contract dated 01.10.2008
(hereinafter referred to as „the Contract‟) for purchase of 3,00,000 +/-
10% MTs of bulk prilled/granular Urea. The agreed rate was
US$ 685.50 PMT CFR. The goods were to be supplied latest by
15.10.2008. It is not in dispute that in terms of the Contract, the
respondent furnished an irrevocable performance bank guarantee
(hereinafter referred to as „PBG‟) for a value of 3% of the total
Contract value. Accordingly, the respondent no.1 furnished PBG to

FAO (OS) (COMM) No.76/2016 Page 2 of 23
the tune of US$ 6,169,500/- which was subsequently increased to
US$ 6,786,450 in order to include the tolerance quantity of +/- 10%.

Source: Indian Kanoon

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