Published on: January 20, 2024 at 11:18 IST
Court: Supreme Court of India
Citation: H.J. Baker & Bros. Inc. V. MMTC Ltd. (2023)
Honourable Supreme Court of India has held that measure of damages under Section 73 of the Contract Act, 1872 is the difference between the price at which goods sell at the marketplace on the date of breach, and the contract price. It is held that Courts must refuse the compensation when a seller failed to prove the price of goods, on the date of the breach and at the place of delivery.
20. It was admitted in the deposition that even the quantity of goods to be lifted in the first period, to MMTC was not readily available in January, but could have been made available only in March 1992. Given all these circumstances, the least that Baker could have done was to produce evidence that it possessed on record, which is the sale of 50,000 MT sulphur. In some cases, Baker had claimed that the company was bound by confidential clauses in agreements with other buyers. Yet, in the contracts where the costs were made available that could have been revealed and all the invoices were admissible as were the copies of contracts.
No attempt was made by Baker which relied largely upon the few invoices which it chose to tender in the arbitration proceedings and the Fertecon prices published from time to time. Interestingly, the Tribunal rejected the contract standard i.e. the Canadian purchaser’s prices on the ground that that was the basis of the contract. The award is bereft of any reasoning why given that Baker was a New York based supplier which sourced its supplies from various parts of the world had agreed to supply in the contracts in question based upon the Canadian prices, and instead, arbitrarily outrightly rejected that standard.
21. The failure to produce the best evidence that Baker possessed in the form of contracts for the balance quantity and the payments received as proof of damage suffered and the shipping arrangements in question as well as the shipments as billed from time to time with full particulars, in the Division Bench’s opinion, disentitled it to any compensation for the later period given that it was made well aware in April 1992 that the arrangement could not be continued by MMTC. The findings of the Division Bench, therefore, are in accord with law.
Drafted By Abhijit Mishra