2008 Supreme(SC) 1419

2008(7) Supreme 150
SUPREME COURT OF INDIA
(From Andhra Pradesh High Court)
Tarun Chatterjee and Dalveer Bhandari, JJ.
M/s Shakti Bhog Foods Limited — Appellant
versus
Kola Shipping Limited — Respondent
Civil Appeal No. of 2008
(Arising out of S.L.P.(C) No.16109 of 2007)
Decided on : 23-09-2008

IMPORTANT POINTS
Existence of charter party can be identified from correspondences between the parties as also from the fixture note and the bill of lading signed by the parties.
Unless the agreement is null and void, inoperative or incapable of being performed, the parties shall be referred to arbitration.

Headnote:(a) Arbitration and Conciliation Act, 1996 – Section 45 – High Courts holding existence of charter party agreement containing arbitration clause – Appellant challenging the finding but subsequently withdrawing it – Hence appellant cannot be permitted to contend that there is no arbitration clause in the Charter Party Agreement – No reason to interfere with the concurrent findings. (Paras 8 and 9)

        (b) Arbitration and Conciliation Act, 1996 – Section 7 – Appellant denying the fact that it had signed the first page of the Charter Party Agreement – Even the venue of arbitration was chosen – The contention of the appellant that under Section 7 of the Act the letter/faxes or mails or any other communications will have to contain the arbitration clause in the absence of any agreement rejected. (Paras 11 and 13)

        (c) Arbitration and Conciliation Act, 1996 – Section 45 – Existence of charter party can be identified from correspondences between the parties as also from the fixture note and the bill of lading signed by the parties. (Para 23)

        [2002] EWHC 762 (Comm) – Relied upon.

        (d) Arbitration and Conciliation Act, 1996 – Section 45 – At the request of one of the parties or any person claiming through or under him the court shall refer the parties to arbitration unless it finds that the said agreement is null and void, inoperative or incapable of being performed – Presently this being not the case, parties should be referred to arbitration – No infirmity in the impugned judgment. (Para 24)

       Facts of the case :

        1. The appellant is a company dealing in the business of manufacturing and exporting food products and cereals/grains etc. The appellant was to export sorghum to the State of Niger.

        2. In that process, the appellant obtained an irrevocable letter of credit from the State Bank of India, Overseas Branch, New Delhi, on 12th of July, 2005.

        3. On 26th of July, 2005, the appellant through an e-mail promised to load 13,500 MT of the cargo at Kakinada Port for transportation to Cotonou. The respondent herein, issued a bill of lading. As per the terms and conditions of the Charter Party Agreement, the appellant had to load the said cargo within nine days on or before 6th of August, 2005.

        4. On 9th of August, 2005, the appellant informed the respondent that he could not get the export order from the State of Niger due to some unreasonable conditions imposed by it.

        5. As per the Charter Party Agreement, existence of which was alleged by the respondent and denied by the appellant, the appellant had to load maize to Colombo from Kakinada Port, in case he failed to get the export order from Niger. On 19th of August, 2005, the appellant addressed an e-mail to the respondent stating that he was ready to compensate the respondent for the loss suffered by it. On 24th of August, 2005, but the amount offered was not acceptable to the respondent.

        6. The respondent initiated proceedings in the High Court of Delhi seeking interim orders in the matter of discharge of 1,100 MT of the cargo. The said application came to be allowed by the High Court on 28th of September, 2005.

        7. The appellant also filed an application seeking interim injunction directing the Port Officer, Kakinada Port, to detain the vessel of M.V. Kapitan Nazarev at Kakinada harbour till the disposal of the suit. The application came to be dismissed. The appellant thereafter unsuccessfully challenged the said order by filing an appeal before the High Court of Andhra Pradesh.

        8. The respondents then entered into appearance in O.S. No. 44 of 2005 and moved an application under Section 45 of the Act to refer the dispute between the parties to arbitration in London under the provisions of the English Arbitration Act, 1996 and stay all further proceedings in the suit pending arbitration. The Learned III Additional District Judge, Kakinada, allowed the application. The Civil Revision Petition of the appellant before the High Court was dismissed.

       Finding of the Court :

        Impugned judgment has to be affirmed.

       Result : Appeal dismissed.