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IN THE HIGH COURT OF BOMBAY
S.N. Variava, J.
Sociedade Algodoeira Do Nordeste Brasileiro S.A. ... Petitioners.
Versus
The Cotton Corporation of India Limited ... Respondents.
Arbitration Petition No. 123 of 1987 in Award No. 126 of 1986, decided on 4-9-1992.
Advocates appeared :
I.M. Chagla with N.G. Thakkar, H.A. Desai and R.R. Soni, for the petitioners.
Virag V. Tulzapurkar with Uday Mahajan i/b. M/s. Divekar Co., for the respondents.
Section 5-Award by arbitrator-Scope of-Power of Court on question of assignment-Court not sitting in appeal over award of Arbitrator-Court can not go behind Award-Court can look at an error apparent on race or award or when award is against provisions of law.
The Court is not sitting in Appeal over the Award of the Arbitrators.
The Court cannot go behind the Award and can only look at an error apparent on the face of the Award. Even if the Court comes to a conclusion different from that of the Arbitrator the Court cannot interfere unless it is shown that the Award is against the provisions of law or there is an error apparent on the face of the record. In this case, it is not for this Court to decide whether there is an assignment or not. This was a question which was directly before t he Arbitrators and thereafter before the Board of Appeal. The Arbitrators have given their decision. The Arbitrators being the final authority between the parties, the decision of the Arbitrators is binding on the parties.
Sections 8 and 20-Award of Administrator-Challenged.-Ground- Defect in arbitrators appointment and hence alleged lack of jurisdiction-Validity-Held-Once parties accepted by conduct appointment of arbitrator, they had acquiesced in his appointment as an administrator on their behalf-Party so acquiesced would be precluded from challenging jurisdiction of arbitrator Even if initial order was not passed by consent by participation and acquiescence, a party can be precluded from challenging the award in future.
2. By a Contract No. section 1508 dated 19th February 1977 entered into between the petitioners and the respondents, the petitioners were to sell to the respondents 15,000 bales of cotton of the type and the quality mentioned therein. The terms relevant for our purposes read as follows :
"SELLERS : SANBRA --- SOCIEDADE ALGODOERA DO NORDESTE BRASIL-EIRO S.A.--- Caixa Postal 8149 --- Sao Pauli --- Brazil
6.SHIPPER : Sanbra S.A. and/or Third Parties.
7.PAYMENT : Cash against first presentation of shipping documents in Bombay India. In the event tendering Bolivian and/or Paraguyan cotton proceeds to be remitted to The Innesmoor Corporation, one Chase Manhattan Plaza, New York, U.S.A., favour and for account of Sanbra S.A.
9. TERMS AND ARBITRATION : Terms and Arbitration in accordance with the rules and regulations of the East India Cotton Association Ltd., Bombay."
3. In respect of 3,831 bales of cotton delivered pursuant to this contract, disputes arose as to whether there was a loss of weight. The respondents issued 4 Debit Notes for U.S. $49,270.17 on one M/s. Bunge A.G. Zurich. It appears that the said M/s. Bunge A.G., Zurich had shipped this 3831 bales of cotton and that the Invoice in respect of this had also been raised on the said M/s. Bunge A.G., Zurich. The respondents by their telex dated 16th April 1980 sent to M/s. Bunge A.G., Zurich referred the dispute to Arbitration. By this telex, the respondents appointed their Arbitrator and called upon M/s. Bunge A.G., Zurich to appoint an Arbitrator. M/s. Bunge A.G., Zurich by their telex dated 30th April 1980 appointed one Mr. Govind Prasad Bansal as their Arbitrator.
4. The respondents then filed their statement of claim before the Arbitrators. The respondents claimed the amount from the petitioners. However in the statement of claim, they described the petitioners as "V. Sanbra (N.V. Bunge)". The petitioners now appear before the Arbitrator and file their Written Statement. This even though M/s. Bunge A.G. Zurich had appointed the Arbitrator. Paragraphs 1 and 6 of the Written Statement read as follows :_
"1. The respondents say that V. Sanbra and N.V. Bunge are two different and distinct entities and as such the reference filed against V. Sanbra (N.V. Bunge) is not maintainable in law.
6. The respondents say that by its letter dated 16th November, 1977 addressed to the Claimants, N.V. Bunge had informed the Claimants that M/s. Bunge A.G., Zurich were the sellers to the Claimants in respect of the said goods and all debit and credit notes pertaining to the said goods were required to be issued to the said M/s. Bunge A.G. The respondents say that the Claimants are aware that the said M/s. Bunge A.G. are the contracting parties with the Claimants in respect of the said goods. The respondents say that the said M/s. Bunge A.G. had addressed a letter dated 10th August, 1979 in connection with the alleged claim of the Claimants. In reply to the said letter, the Claimants had addressed a letter dated 13th September, 1979 to the said M/s. Bunge A.G. claiming the said U.S. $ 49,270.17 from them. In the circumstances of the case, the Claimants had the knowledge that the said Bunge A.G. were the contracting party with the Claimants and as such, the respondents are not liable to pay any amount to the Claimants."
5. The submission in paragraph 6 of the Written Statement appears to be based upon the telex dated 29th June 1977 addressed by one N.V. Bunge, Antwerpen. The Telex reads as follows:
"TO BOMBAY---COTCORP.
FORM ANTWERPEN---BUNGE (TLX 31611 BUNGE B) 29-6-1977/1146.
YR TLX 1084 29-6-1977 COTTON CTR 1507/1508"
1) TKS FOR CLARIFICATION AND RELEVANT DETAILS FOR INVOICING PURPOSES.
2) GOOD ORDER WISH MENTION THAT CONTRARY TO CONTRACT TERMS MERCHANDIZE WILL EVENTUALLY BE INVOICED BY BUNGE AG ZURICH
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