Shri Bajrang Power and Ispat Limited v Steel Corp Limited

Shri Bajrang Power and Ispat Ltd, an Indian steel producer, agreed on 17 July 2023 to buy 30,000 metric tons of steel making pig iron from Steel Corp Ltd, a UK metals trader, at US$381 per metric ton, for shipment from Turkey to India by 15 August 2023. The seller did not ship. It later offered to supply at US$420 per metric ton and then claimed force majeure. The parties accepted the agreement was terminated on 25 September 2023. The buyer turned to steel scrap bought in the Indian market as a substitute.

The buyer sued in Originating Claim No 529 of 2024 and obtained default judgment on 4 December 2024 when the seller did not file a notice of intention to contest. This decision, in Assessment of Damages No 3 of 2025, assessed the damages. The buyer sought the difference between the contract price and the Indian market price of pig iron under s 51(3) of the Sale of Goods Act 1979, or alternatively under s 51(2). The joint expert put the Indian price at US$468.51 per metric ton, against US$371.77 for South African and US$397.03 for Russian pig iron. The seller argued that the buyer failed to mitigate by not buying cheaper foreign pig iron and so should recover nothing.

1. Whether the Indian market or foreign sources formed the relevant available market for the buyer
2. Whether the buyer failed to mitigate its loss by buying in India rather than from cheaper overseas sources
3. How damages should be measured where the buyer had in fact mitigated by buying steel scrap

Although the agreement chose English law, neither party addressed foreign law and the court noted the result would likely be the same under any of the relevant frameworks, since compensation and mitigation principles are common to them.

The available market must be judged from the buyer's commercial position. The buyer had always sourced pig iron in India, its furnaces needed uninterrupted supply, and India was largely self-sufficient in pig iron. The court held that buying locally was commercially reasonable given the risks of overseas procurement, such as shipping delays, customs issues and unfamiliar suppliers. The duty to mitigate does not require a buyer to hunt the globe for the lowest price, and the seller's description of the cost as a self-imposed premium missed the point.

However, applying the market difference would overcompensate. Relying on Bunge SA v Nidera BV, the court held that where a buyer mitigates by a substitute purchase, damages are assessed by reference to that purchase. The buyer bought steel scrap, which cost more than the contract price but less than Indian pig iron. Its argument that it lost profits on resale failed because it was a steel producer with no evidence of reselling pig iron. Taking account of the extra carbon inputs needed with scrap, production cost approximately US$35 more per metric ton, which gave the award.

The court allowed the claim in part, awarding judgment for the claimant of US$1,050,000 plus interest rather than the market-difference measure it sought. The parties were to make submissions on interest and costs within 14 days.