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2015 (1) TMI 17 - SUPREME COURTRejection of application filed u/s 9 Arbitration & Conciliation Act, 1996 - Whether the appellant was entitled to interim injunction in aid of his claim for specific performance of an agreement to sell iron ore or not – Held that:- The arbitration proceedings between the parties herein are pending where the main question is - whether the respondent is entitled to seek specific performance of the agreement dated 27.02.2005 by which the appellant agreed to sell iron ore excavated from the mines specified in the agreement to the respondent? If the answer to the said question is in affirmative then the next question would be – what is the rate at which the appellant is required to sell the iron ore to the respondent - the appellant stated that in the SLP that during the pendency of this litigation, it has already set up a beneficiation-cum-pelletisation plant where the entire quantity of iron ore extracted by the appellant is being consumed as a raw material - Therefore, the question of the appellant selling the iron ore to any third party does not arise at all. In view of the categorical assertion made by the appellant and the undertaking that the appellant would consume the entire iron ore excavated captively, there is no reason to give any direction to the appellant to sell the iron ore to the respondent during the pendency of the arbitration - Such a direction, would virtually amount to the enforcement of the agreement without adjudication of the right of the respondent to seek specific performance of the agreement - no doubt, if the appellant company were to be selling the iron ore excavated by it to any third party, there was some justification by the respondent to seek an interim direction to the appellant to sell the ore to the respondent, subject of course to the determination of the cause finally in the arbitration proceedings - But it is not the case here – respondent submitted that in case an interim order is not granted, even if the respondent eventually succeeds in the arbitration proceedings and obtains an award for the specific performance of the agreement, the success would remain only on paper as huge amount of mineral excavated by the appellant would already have been sold by that time and there is no way of the respondent obtaining the said mineral. No doubt, if the respondent eventually succeeds in the arbitration, it would be entitled to specific performance of the agreement in question - The respondent can always seek monetary compensation for the loss sustained by it by virtue of the non-supply of the minerals by the appellant during the pendency of the arbitration proceedings - appellant gave an undertaking that during the pendency of the arbitration proceedings the appellant will not sell any part of the iron ore excavated from the mines covered by the agreement and such ore would be consumed captively by the appellant in its plant and the appellant would maintain a complete account of the minerals excavated and consumed captively by the appellant – Decided in favour of appellant.
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