SC gives relief to Shakti Bhog Foods

The Supreme Court has restrained a Cypress-based shipping company from proceeding further against cereal exporter Shakti Bhog Foods in the United States.

A Bench headed by Justice Markandey Katju has restrained Kola Shippping (KSL) from proceeding further with the case pending before the US court. "Until further orders, injunction is granted...," it said.

The Cypress company had sought confirmation of the ex parte arbitral award of February 11 that asked the Shakti Bhog Foods to pay $1,635,772 plus interest at the rate of 7 per cent compounded at three-monthly intervals from October 2005 till the date of payment.

Shakti Bhog Foods (SBFL) had moved the apex court challenging the Delhi High Court's interim order that refused to give protection to it against the proceedings initiated by KSL in the US court.

The High Court had refused protection on the grounds that SBFL had failed to give an undertaking in this regard.

The court had asked SBFL to give an undertaking that if the injunction granted by it was vacated, the cereal exporter would pay the awarded amount to the shipping company even if the plea against the arbitral award was pending before it.

Alleging that the High Court's impugned order was unjustified, SBFL said that it would be forced to pay after giving the undertaking and later it would be impossible to recover the amount in case the award was quashed or modified.