Critical analysis and Case study of [MMTC vs. Sterlite Industries Pvt. Ltd.]. Supreme Court of India M.M.T.C. Limited - Versus- Sterlite Industries (India) Ltd. Decided on: 18 November, 1996 Equivalent citations: 1996 IXAD SC 25, 1997 AIHC 605, 1996 (2) ARBLR 705 SC Bench: J Verma, B Kirpal Facts: The agreement between the parties: An agreement was entered into on 14th December, 1993 between the petitioner and the respondent by which the respondent appointed the petitioner as a consignment agent for the storage, handling and marketing of continuous cast copper rods manufactured by the respondent. The agreement provided, in so far as is material, that the petitioner will store, handle and market these copper rods produced by the respondent and received at various godowns of the petitioner from the respondent. Clause (I) A(iv) provided that the petitioner shall sell the aforesaid material belonging to the respondent on consignment basis "as per the policy and prices" of the respondent on the basis of the marked weight in the coils supplied by the respondent. By sub-clause (viii) of Clause (I)A, it was provided that the petitioner would collect the sale proceeds and the amount will be remitted on the following working day to the respondent after withholding the sales tax. Turnover tax and any other statutory cess, levy or tax. Besides the aforesaid deductions the petitioner would be entitled to deduct its service charges at the rate of Rs. 500/- per metric tonne. Rs. 500 per metric tonne then, was the remuneration to which the petitioner was entitled. Under sub-clause (xi) of Clause (I)A, the petitioner was to provide for a copy of a statement of sales tax deposited with the sales tax authorities along with an 'F' Form in original and copies of challans and returns. Sub-clause (xiv) stipulated that the petitioner shall sell only against "100% advance financial arrangement to be made by the customer". The obligations of the respondent were specified in Clause (I)B of the Contract and these obligations included an obligation in sub-clause (i) to arrange for delivery of continuous cast copper rods to the godowns of the petitioner as intimated by the petitioner from time to time; an obligation under sub-clause (vii) to ensure quality and to redress customer complaints and under sub-clause (xi) not to appoint any selling agents or commission agents for sale in States agreed to with the petitioner. Under Clause (III) of the contract, it is provided that the products shall be of standard quality and the petitioner shall not give a guarantee or warranty save to the extent as mentioned by the respondent. Provision was also made therein for the rectification and redressal of the customer grievances. Clause V provided that the agreement shall be deemed to have commenced on 14th December, 1993 and shall be valid for an initial period of three years. Either party could terminate the agreement by giving one month's notice in writing. There is no dispute about the fact that the agreement was not terminated. The contract between the parties contains a provision for arbitration and Clause VII provides in that regard that in the event of any question or dispute arising under or out of or relating to the construction, meaning and operation or effect of the agreement or breach thereof, the matter in dispute shall be referred to arbitration.
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