The dispute between both the parties took place because of unfulfillment of terms of agreement dated 4 December 2010, which is in the nature of a storage contract. Kences Ltd had agreed to provide an open area with hard top, levelled with paved blocks and proper drainage facility of 60,000 sq. meters and covered shed of 1000 sq. mars. to JSW for storage of their goods with suitable handling equipment. The agreement was for a period commencing from 4 December 2010 to 3 December 2011. A work order dated 5 February 2011 was placed with Kences Ltd.
However, Kences did not provide with the said facilities because of which JSW steel had to face complaints from customers and also damage of goods. This was the reason JSW filed a case against Kences LTD.
After the termination of agreement Kences LTD was supposed to return all the goods to JSW steel but they did not and hence in September 2012, an order was passed allowing JSW to remove the goods lying at the said premises of Kences LTD in presence of Court Receiver/Commissioner. JSW steel stated that they had suffered a loss of amount of Rs.98,15,442/- for shortage of 205.559 Metric Ton of TMT Bar, a claim of Rs.26,26,250/- on account of damaged material of TMT Bar of 55 metric ton lying unsold and lastly a claim of Rs.41,86,333/- on account of loss of value of HR coil of 308.53 metric ton and HR Plate of 22.57 metric ton.
The arbitrator agreed that there was shortage of material, but came to the conclusion that JSW could not prove the quantum of loss, in regard to which the claims were made.
On this JSW provided with a circular dated 5 August 2013 issued by the Ministry of Steel, Government of India, which showed the market rate of TMT bars, HR coils etc. in June 2013 at 47,540 per metric ton. The arbitrator then questioned as to how come JSW stated the amount of Rs 98,15,442/- at Rs.47,750/- per MT during the prevalent time.
The arbitrator stated that such a document in the form of evidence could not be tendered for the first time at the final stage of arguments. Thus, the Tribunal did not take into consideration of the said circular, as the law, did not permit it. Principles of natural justice do apply which require that the Defendant should be given sufficient opportunity and should be put to notice before the Trial starts about the evidence which the Claimant wants to adduce.” Thus, the petition was rejected.