Question

ICL Ltd., an oil company entered into an agreement with Almora Gas Service through a
distribution agreement. The agreement contained two clauses which governed termination:
Clause 1.2- which provided for termination on the happening of certain specified events and;
Clause 1.3- which entitled either party to terminate the agreement by giving 30 days’ notice to the
other party, without assigning any reason for such termination.
ICL Ltd. terminated the distributorship agreement on account of complaints that Almora Gas
Service was selling unauthorised gas connections. ICL Ltd. terminated the agreement under
Clause 1.3. An arbitral tribunal found the termination to be a breach of contract and held that ICL
Ltd. was liable to restore the distributorship and pay compensation. Whether the termination of
agreement by ICL Ltd. was as per the terms of the contract? Whether Almora Gas Service can
compel ICL Ltd. for specific performance of the contract? Support your answer with the help of
relevant statutory provisions and case laws.

Answer 1

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