These are two Petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, “Arbitration Act”), by both the parties, against Award dated 4 January 2007, granting a part claim and a part counter claim by the sole Arbitrator in a dispute arising out a Charter Party Agreement dated 7 August 2001 between them.

2 Arbitration Petition No.178/2007 has been filed by the Petitioners/the claimants against the Respondents/original Opponents only against the grant of claim to the extent of `30,78,417/, the rest of the Award has been accepted.

3 Arbitration Petition No.266/2007 has been filed by the original Respondents against the claimants only to the extent of grant of sum of `8,60,750/towards the restricted charter hire charges and the bunkers cost.

4 By the impugned Award, the Arbitrator, subject to set off/adjustment, has directed the original claimants to pay to the original Respondents, the balance amount of `22,09,667/and the interest thereon at the rate of 10% per annum from the date of the Award till payment.

FACTS

5 Both the parties at the relevant time were carrying on shipping related business regularly at their respective places since October 2000. By Charter Party Agreement dated 7 August 2001, the vessel, m.v. CONCORD, owned by the claimants, was chartered by the Respondents (original Respondents). On 1 October 2001, the cargo vessel which was plying in a west-coast in India sank into the sea near Dabhol Port. There arose dispute between the parties. Therefore, in view of the arbitration agreement, the sole Arbitrator was appointed, after making claims and counter claims, through the various notices.

6 The claimants before the sole Arbitrator on 24/02/2005 made various claims including of the freight and fuel charges (8 days x 6 hours) (22.09.2001 to 01.10.2001) (`90,000/per day) of `18,32,000/. The claims were also made towards the loss of profit on the foundation that the vessel would have plied for 750 days without repair if not sunk. Therefore 750 x `63,000/per day = `7,72,50,000/and thereby claimed `4,90,82,000/. The original Respondents resisted the claims and filed a counter claim dated 25 April 2005 for the loss of freight receivable from the shippers/consignees of the cargo M/s.Gujrat Ambuja Cement Ltd. (Gujrat Ambuja), i.e. `30,29,677/, the owners expenses of `48,714/, loss of revenue, loss incurred by alternative arrangement and thereby claimed a total sum of `85,45,650/.

7 The original Respondents placed on record Consent Terms/award dated 18 September 2003, executed by them with Gujarat Ambuja, the owner of the cement bags for which the vessel was hired for transportation. By the said consent terms, they settled the matter with regard to the counter claim of Gujrat Ambuja at `30,29,677/- in their arbitration proceedings. The claimants were not the party to the said dispute.

8 The claimants filed a rejoinder and reply to the counter claim. The parties filed their respective documents and led the evidence before the Arbitrator. They had also filed written submissions.

9 The Arbitrator, after considering the points for determination which were framed on 19 November 2005, decided all the points by common reasonings and passed the impugned Award.

10 In view of the restricted grounds raised by the respective counsel, the submissions were also made accordingly. Therefore, the controversy in these Petitions is quite narrowed down. THE CARGO VESSEL WAS UNSEAWORTHYTHE CLAIM OF LOSS OF FREIGHT.

11 The Merchant Shipping Act, 1958 (the Act) defines “unseaworthiness’ of a ship as under :

“A ship is ‘unseaworthy’ within the meaning of this Act when the materials of which she is made, her construction, the qualifications of her master, the number description and qualifications of the crew including officers, the weight, description and stowage of the cargo and ballast, the conditions of her hull and equipment, boilers and machinery are not such as to render her in every respect fit