Law: Arbitration Act, 1940

Section: 14

Arbitration Act, 1940 (X of 1940)-- —S. 14—Award—Making rule of Court of—Objections to—Whether plaintiffs were entitled to nominal damages in absence of evidence about market price of coal at time of breach of contract-Question of-Arbitrators concluded that breach had been committed by defendant but onus to establish market price of coal at time of breach having not been discharged by plaintiffs, no damages could be awarded-Plaintiffs contended that even then they were entitled to nominal damages-There is nothing to indicate that plaintiffs have suffered any loss on account of breach committed by defendants-Held: C’ontcntion of plaintiffs with regard to awarding of nominal damages cannot be accepted. [Pp.450453JA,BC ILR 26 Bom. 744, ILR 41 Mad. 709 and 1973 SCMR 555 distinguished. JUDGMENT The facts of the case nre that on 7.2.1982 the plaintiffs invited tenders for purchase of ‘10,000 metiu t-ns of steam coal for prompt shipment’. The particulars of the coal required and the terms and conditions of the offer were contained in the plaintiffs tender document. The defendant, a company incorporated in the United States of America, submitted the lowest tender and its offer was accepted. The price quoted by the defendant through its local agent Pakistan Industries Limited, was U.S.$ 117 per ton. 2.Thereafter, breach was committed by the defendant as the goods could not be supplied by it. Consequently, the plaintiff claimed damaces amounting toRs. 32,53,758/-. 3.The matter was ultimately referred to arbitration and Mr. Justice (Rtd) Dorab Patel and Mr. Nizam Ahmed advocate were nominated as Arbitrators by the plaintiff and the defendant respectively. 4.Thereafter,boththeArbitratorsgaveaunanimousAward,dated 12.11.1986, for Rs. 343,549/- which included Rs. 3,02,445/- as cost of the Import Licence fee -incurred by the plaintiff and Rs. 41,104/- which were paid by the plaintiff to M/s. Muslim Commercial Bank for opening of the letter of credit. 5.Since the commission of the breach of the contract by the defendant was not denied by the latter, the plaintiff claimed damages on the basis of the difference between the price of coal and its market price on the date of the…

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