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HIGH COURT OF CALCUTTA
SABYASACHI MUKHERJI
UNION OF INDIA - Appellant
Versus
NAVIGATION MARITIME BULGARE - Respondent
Matter 507 Of 1971
Decided On : JANUARY 25, 1973
STAY OF SUIT - JURISDICTION CLAUSE - HAGUE RULES - INTERPRETATION - CONVENIENCE AND INCONVENIENCE OF PARTIES - LIMITATION - UNDERTAKING BY PETITIONER - STAY GRANTED SUBJECT TO UNDERTAKING.
Fact of the Case:
A Bulgarian shipping company chartered its vessel to carry urea from Bulgaria to India under a charter party containing a paramount clause incorporating the Hague Rules and a jurisdiction clause providing for disputes to be decided in Bulgaria according to Bulgarian law. The vessel arrived in India and discharged part of the cargo at Visakhapatnam and the balance at Calcutta. The Indian consignee, Union of India and Food Corporation of India, filed a suit in Calcutta against the shipping company for alleged failure to deliver some of the cargo. The shipping company applied for a stay of the suit.
Finding of the Court:
The court held that the jurisdiction clause was prima facie valid and should be enforced unless enforcement was shown by the resisting party to be "unreasonable" under the circumstances. The court found that the dispute involved questions of fact and law that could be more conveniently resolved in Bulgaria, where the evidence of the ship's officers and records was located. The court also considered the recent trend of international trade and the importance of enforcing forum selection clauses in international commercial contracts.
Issues: 1. Whether the jurisdiction clause in the charter party was valid and enforceable. 2. Whether it would be unfair or unjust to stay the suit in India and compel the parties to litigate in Bulgaria. 3. Whether the issue of limitation would prejudice the plaintiffs if the suit was stayed.
Ratio Decidendi: 1. The court held that the jurisdiction clause was prima facie valid and should be enforced unless enforcement was shown to be unreasonable. The court found that the dispute involved questions of fact and law that could be more conveniently resolved in Bulgaria, where the evidence of the ship's officers and records was located. The court also considered the recent trend of international trade and the importance of enforcing forum selection clauses in international commercial contracts. 2. The court found that it would not be unfair or unjust to stay the suit in India and compel the parties to litigate in Bulgaria. The court noted that the plaintiffs were the Union of India and Food Corporation of India, which had the resources and expertise to pursue litigation in Bulgaria. The court also considered the fact that the defendant had undertaken not to raise the defense of limitation if the plaintiffs filed a suit in Bulgaria within six months. 3. The court held that the issue of limitation would not prejudice the plaintiffs if the suit was stayed. The court noted that the plaintiffs had six months to file a suit in Bulgaria and that the defendant had undertaken not to raise the defense of limitation.
Final Decision: The court granted a stay of the suit in India, subject to the defendant's undertaking not to raise the defense of limitation if the plaintiffs filed a suit in Bulgaria within six months.
( 1 ) THIS is an application for a stay of a suit. The petitioner is a company incorporated under the laws of Bulgaria and carries on business as a carrier of goods by sea. The petitioner is registered in Bulgaria. It is stated that on the 17th August, 1970 by a charter party entered into at Sofia, Bulgaria the petitioner chartered its vessel to Messrs. Chimiport of Sofia for carrying 10,000 metric tonnes, 5 per cent, more or less, of urea in bags from the Bulgarian Port of Bourgas to 1/2 Ports in India under the terms and conditions contained in the said charter party. In pursuance of the said charter party, it is alleged by the petitioner that the petitioner delivered in September, 1970 the said vessel to the charter at the Port of Bourgas where a quantity of urea in bags stated by the charterer-shipper to be 1,97,000 in number was shipped on board for carriage to India. A bill of lading dated 26th September, 1970 covering the said shipment was issued by the petitioner at Bourgas to the shipper. In the said bill of lading the number of bags shipped on board the vessel as aforesaid was declared by the shipper to be 1,97,000 and their weight as 9,850 metric tonnes. The petitioner further alleges that the petitioner does not admit the correctness of the declarations and the said bill of lading did not contain any acknowledgment or admission. The said bill of lading, inter alia, contained the following clauses:"clause 1 "paramount clause.-- All the terms, provisions and conditions of the Rules contained in the International Convention for the Unification of Certain Rules relating to Bill of Lading dated Brussels the 25-8-1924, (the "hague Rules") shall apply to the contract in the Bill of Lading, but if in the country of shipment or delivery of the gooda any special law has been enacted incorporating the rules of the said convention, then all the terms, provisions and conditions, if any, as are imposed by such special law shall apply. Nothing herein contained shall be deemed to be a surrender by the Carrier of any of his rights or immunities or an increase of any of these responsibilities under the said Rules or Enactments. The Carrier is to be entitled to the benefit of all such privileges, rights and immunities as are contained in the said Rules or Enactments as if the same were herein specifically set out, and if anything herein contained be inconsistent with the said Rules or Enactments it shall to the extent of such inconsistency and no further be null and void. ""clause 2. Jurisdiction-- Any dispute arising under this Bill of Lading to be decided in Bulgaria according to Bulgarian law. "clause 14. Settlement and Assessment of Claim, (a) Notice of claim arising under this Bill of Lading or legal claims must be lodged not later than defined in the Hague Rules the Carrier shall not be liable to pay any compensation of the price or value of the goods which has been wilfully misstated. (b) The ship's protest and/or a true copy of the ship's log shall be deemed conclusive evidence of the facts and circumstances stated herein. In case of total loss of the ship and/ or the cargo and also in case of absence of tidings it is assumed, unless the contrary it proved that the loss of the ship and/or cargo has not been caused by unseaworthiness; or by actual fault or privity of the Carrier; or by the fault or neglect of the agents or servant of the Carrier. (c) Any claim for loss or damage under this Bill of Lading to be adjusted on the basis in invoice value of the goods at the Port and time of shipment (with insurance expenses and freight added thereto) or a due proportion thereof; or on declared value of the goods, whichever shall be less; provided also that the ship in no case be held liable for goods of any description exceeding in value one hundred pounds sterling per package of unit; unless declared with value of this Bill of Lading and extra freight as may be agreed upon; be paid nor in any case for any c
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