London: Government of India-owned PEC Ltd today won a major victory in the London High Court, that dismissed a liability case against the company to the tune of millions of dollars.
The company was accused of not honouring a contract with a Thailand-based company Asian Golden Rice (AGR) regarding the sale of 25,000 metric tonnes of rice.
PEC Ltd, that among other things deals in trading in agricultural products and import of industrial raw material, argued that its senior official who had signed the contract on behalf of the company did not have legal authority to conclude the deal.
The company faced a USD 6.2 million liability plus several years interest and costs under the Grain and Feed Trade Association (GAFTA), and would have faced a total of USD 9 million liability, including interest, other costs and its own legal costs.
In its judgement, the High Court today ruled that the senior official of PEC did not have legal authority to conclude the contract.
In July 2012, the GAFTA ruled that the agent did have the authority and PEC Ltd were made liable to pay AGR the claim following which PEC Ltd decided to challenge the Arbitration Award in the High Court in London.
Today`s judgement can be seen as an encouraging development for the future of international arbitration cases in the English courts, said defence lawyer and leading NRI solicitor Sarosh Zaiwalla.