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Barminco Indian Underground Mining Services LLP v. Hindustan Zinc Limited (Rajasthan High Court). Decided on 20 July 2020

1) Barminco Indian Underground Mining Services LLP v. Hindustan Zinc Limited (Rajasthan High Court). Decided on 20 July 2020

Facts of the case:-


Barminco Indian Underground Mining Services, the applicant company, is a Limited Liability Registered Company under the Limited Liability Partnership Act 2008. On the 11th day of March year 2019, the applicant for providing its services for the development of Rampura Agucha Mine entered into a contract, and the mine was of the respondent Hindustan Zinc Limited. 

Whatever work was awarded to the applicant, he had deployed his resources, workforce, and machinery as per the contract. Moreover, while the work was being performed, various invoices Baras by the applicant were then duly paid by the respondent. Still, after a certain period, the invoices of February 2020 and March 2020, the claim was raised under the "Force Majeure" and "Change in Law Clauses" of the contract were not paid.

According to the allegation which was made in the application, the contract was unprofitable, so the respondent company which was Hindustan Zinc Limited re-negotiated the terms of the contract and asked the applicant to reduce the work by 50%, but the applicant refused the offer and wrote a letter on the 19th day of April 2020 by terminating the contract at his part with effect from the first day of May 2020 alleging that the applicant had failed to honor Clause 15.3 of the Contract. 


Afterward, the applicant company demanded an amount of ?32,17,30,998/-for the work which had already been completed from January 2020 to April 2020. It has been alleged by the applicant company that it is counter to the applicant’s claim. The respondent company wrote a letter on 29th April 2020, and they raised a claim of amount 49.69 crores against it. After that, certain emails were exchanged between both parties, which is not of much relevance.


Case issue:- 


Singapore is the seat for Arbitration. So the issue of the case is which country will have jurisdiction to hear the application under section 9.


Case judgment:-


In the case of BARMINCO INDIAN UNDERGROUND MINING SERVICES V. HINDUSTAN ZINC, the high court of Rajasthan held that the definition clause is given in section 2 (1) of the arbitration and conciliation act applies to the whole of the act not only limited to part 1 of the act. Therefore, the arbitration can remain as it is other than becoming the international commercial arbitration because it is not necessary to have an arbitration agreement. It results in a foreign award means that it becomes international commercial arbitration as stated under part-2 of the Act. 


"Since the seat of arbitration in the present case for Singapore, we cannot say that it is a domestic arbitration," the court highlighted.  Therefore, the award which will be passed will not be a domestic award. 


Another situation is that arbitration is not an international commercial arbitration ( because both the party’s nationality is Indian and nationality is the only determining and decisive factor). Still, the award is for a foreign party.


This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.



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