Gourab Banerji, Clasis win for Glencore as Delhi HC enforces $4 million award on Dalmia

Dalmia Cement recently suffered a setback in its ongoing dispute with Glencore International, with the Delhi High Court paving the way for the enforcement of an arbitral award of more than $4 million against the company..The award was rendered by an arbitral tribunal – comprising of Simon Crookenden QC, David Joseph QC and Christopher Style QC – constituted under the Arbitration Rules of the London Court of International Arbitration..The arbitral award was in the context of disputes that had arisen between the parties in connection with a 2011 agreement. Glencore had agreed to supply and Dalmia had agreed to purchase coal of Indonesian origin, to be shipped in nine consignments..Glencore claimed that Dalmia had breached the agreement by refusing to accept delivery of the last three consignments, whereas Dalmia contended that delivery of such shipments was dependent upon the quality of coal delivered earlier. Dalmia further claimed that the quality of coal delivered earlier by Glencore was not as per the specifications under the agreement..The arbitral tribunal found that Dalmia had breached its contractual commitments by non-acceptance of delivery of the shipments and passed the award in favour of Glencore..Ashish Dholakia, appearing for Dalmia in the Delhi High Court, opposed the enforcement of the award on three grounds:.That Dalmia was unable to present its case before the arbitral tribunal, which had rejected its request for production of documents.That the award is opposed to the Public Policy of India as the arbitral tribunal had awarded damages in favour of Glencore, without Glencore establishing/ furnishing any documentary proof of the loss suffered by it.That the Award is opposed to fundamental policy of Indian law in as much as the arbitral tribunal granted liberty to Glencore to file additional documents, on selective basis, just prior to the final hearing. This was not a judicial approach..Senior Advocate Gourab Banerji, appearing for the petitioner Glencore, countered the submissions made by Dholakia and argued that Dalmia’s request for production of documents was rejected on the ground of lack of sufficient relevance and materiality..“Such decisions were within the domain of the arbitral tribunal and were not amenable to a judicial review in proceedings for enforcement of the arbitral award.”.He further submitted that declining Dalmia’s request for production of documents did not imply that it was unable to present its case and that Dalmia had been given full opportunity to defend the claims made by Glencore and the matter was fully contested by it. Banerji was briefed by a team from Clasis Law, led by Partner Sumeet Lall..The Single Judge Bench of Justice Vibhu Bakhru was in agreement with Banerji..“Undisputedly, Dalmia had full opportunity to present its case but had been unable to persuade the arbitral tribunal that the documents sought to be produced were relevant or material to the disputes raised…Dalmia was not precluded from setting up the case as it thought fit.”.The Court further held that Dalmia’s contention that the damages awarded by the arbitral tribunal are in conflict with the fundamental policy of Indian Law was unmerited..“In the present case, it cannot be accepted that the award of damages is either unreasonable or is based on no material at all.”.With regard to the contention that the arbitral tribunal did not adopt the judicial approach as it permitted Glencore to produce additional documents, the Court held,.“It is apparent from the above that Dalmia had full opportunity to deal with the documents produced by Glencore. This court finds no infirmity with the procedure as adopted by the arbitral tribunal as Dalmia had full opportunity to contest the veracity and the evidentiary value of the documents produced by Glencore.”.The matter is listed for further proceedings on August 2..Read Judgment: