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Rohan Typed Notes
Rohan Typed Notes
The petitioners have challenged Arbitration award dated 6.9.2013 passed in the arbitration
proceeding b/w M/s JSW Ispat Steel Ltd and M/s GAIL.
Relationship b/w parties emanates out of a contract dat 10.09.1991 entered into b/w :
GAIL & Nippon Denro Ispat Ltd. (later known as Ispat Industries Ltd. and now as
JSW Ispat Steel Ltd). (Ispat/JSW/ Claimant / Respondent in OMP)
Entered for supply of Natural Gas for the purpose of Sponge Iron Plant of ISPAT in Raigadh,
Maharashtra.
Claimant/Respondent in OMP operates a Sponge Iron & Hot Rolled Coil plant in Dolui,
Raigarh, Maharashtra. For the purpose of producing Sponge iron, which is the basic
ingredient of Hot Rolled Coil production, natural gas in large quantities is required.
4.03 : Buyer in addition to price of GAS mentioned in Article 11 (Price of Gas) shall pay the
Seller Transportation charges @ .60.60/ thousand cubic meter for URAN-THAL sector of
pipeline.
+
monthly transportation/ Service charges based on formula at Ann. III (at Pg 96 of the OMP).
5:01: Mass of 1·00 million standard cubic mtr. per day of GAS to be delivered Quarterly
forecast of requirement to be given one month in advance.
Accordingly: Pg 46 (DMP/PD)
(iii) FIXED monthly transp./ service Charges Rs. 38, 67, 600/-
And (iv) Additional charges for investment by GAIL on telemetry and telcom system etc.
(Subject to yearly escalation).
Article 12 modified too. (Pg 106) GAIL to raise invoices for actual qty. of gas supplied +
TransportionTransportation charges (fixed) TC, Service charges/ Additional charge.
In terms of modified 12.03 failure of buyer to put forward a claim within time specified
constitutes WAIVER or right to refer claim to Arbitration! (Pg 101 OMP/PD)
Comparison of both agreements dt. 10.09.1991 and 30.03.1998 has been placed in court file
at Pg 7-8 of written submission filed by the Petitioner GAIL.
It is pertinent that in terms of clause 12.03 (amended) to the extent that the claims lodged by
the buyer are accepted, the seller (GAIL) shall raise a credit note and adjust the same in the
next invoice.
GAIL issued a credit note of Rs. 4,22,33,753 to ISPAT on the basis of transportation charges
revised under the Supplementary Agreement dates 30.03.1998.
(document filed in the Convenience volume at Pg 1-3)
*ISPAT received benefit under the amendment for the period June 94 to Mar 1998.
21.12. 1999
A Tripartite Agreement who executed b/w
GAIL + Kalyani Muleund Ltd. (Buyer Kalyani )+ ISPAT (Buyer assignee)
On 30.02.1992 an agreement was entered into b/w GAIL & Kalyani for gas allocation of 0.75
million metric Std. Cubic meter/day
(MM SCMD)
Vide the Tripartite Agreement this was assigned to ISPAT (being an associate company of
Kalyani) for additional requirements of its Sponge Iron Production.
Charges in this agreement were different from the Contract dt. 10.09.1991 as modified on
31.03. 1998.
(no claims have been made under this agreement. This is recorded in the award at Pg 10
(OMP/PD) as a note and also at Pg 65 (OMP/PD), at isqueissue no. 9.)
Disputes arisen b/w GAIL & Kalyani have been referral to arbitration in terms of MOU
dt 04/12/98 (not in our records) (not regdreqd. either).
ISPAT has agreed to bind themselves by this contract dt. 30.3.1992 from the buyer
out of own free will.
MoPNG gave permission of assigmentassignment of GAS by buyer to Assignee
(ISPAT) on 23/12/1998. Subject to additional sponge iron being created.
Allocation of 0.75 MMBCMD to Kalyani not cancelled but GAIL may assign to ISPAT.
Charges to be increased by 3% on annual rent basis w.e.f. 1.4.2000. (Pg 107 OMP/PD).
24-12. 2000: ISPAT made request for refund of transportation charges for additional GAS
under the 1999 Agreement.
As per ISPAT no additional capital expenditure incurred by GAIL.
(Pg12 cv) 4/3/2002: Meeting b/w parties on 25.02.2002 on various issues including transportation
charges.
This claim of Rs 14.67 crores which has been allowed the Arbitral Tribunal.