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Orissa Manganese & Minerals Ltd v. Synergy Ispat Pvt Ltd

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 8645 of 2014)Decided 12 Sept 2014
Civil Appeal No. 8645 of 2014
Justice J. Chelameswar · Justice A.K. Sikri

Background

A mining company terminated linked arrangements for extracting and supplying iron ore, saying the extraction arrangement breached mining rules. The buyer disputed termination of its supply agreement in arbitration and obtained an interim restriction on sales to outsiders. The mining company said it was now consuming all the ore in its own processing plant.

Decision Breakdown

The Supreme Court disposed of the appeal by recording the company's undertaking to consume the ore in its own plant, sell none to third parties during arbitration, and maintain complete extraction and consumption accounts. It refused to compel interim supply to the buyer because that would effectively enforce a disputed agreement before the arbitrator decided its enforceability. If the buyer ultimately succeeded, it could seek monetary compensation for losses from non-supply. The Court left the contractual merits to arbitration.

Lesson Learnt

A disputed supply contract does not automatically entitle a buyer to delivery during arbitration. Interim protection can preserve records and restrict third-party sales while the arbitrator decides the parties' substantive rights.

Official source (sci.gov.in)View Judgment (PDF)

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