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1957 Supreme(Cal) 3

HIGH COURT OF CALCUTTA
P. B. Mukharji
BAJRANG ELECTRIC STEEL CO. PRIVATE LTD. - Appellant
Versus
COMMISSIONERS FOR THE PORT OF CALCUTTA - Respondent
Suit 1337  Of  1956
Decided On : JANUARY 3, 1957

Advocates Appeared:
A.C.BHABRA, A.C.Ganguly

An arbitration clause in a contract that merely stipulates a choice of legal forum in England, either English Arbitration under the English Arbitration Acts or legal proceedings in English Courts of law, does not constitute a submission to arbitration within the meaning of Section 3 of the Arbitration (Protocol and Convention) Act, 1937, and therefore does not attract the application of the Protocol Arbitration.

Headnote:

ARBITRATION - PROTOCOL AND CONVENTION ACT, 1937 - SECTION 3 - STAY OF SUIT - APPLICABILITY - CONDITIONS - SUBMISSION TO ARBITRATION - CONSTRUCTION OF ARBITRATION CLAUSE - CHOICE OF LEGAL FORUM - ENGLISH ARBITRATION OR LEGAL PROCEEDINGS IN ENGLISH COURTS - PROTOCOL ARBITRATION - CITIZENS OF COUNTRIES OR STATES SIGNATORIES TO THE PROTOCOL - UNIVERSAL APPLICATION - AGREEMENT TO WHICH THE PROTOCOL APPLIES - SUBMISSION MADE IN PURSUANCE OF AGREEMENT - FUTURE DISPUTES - ACTUAL SUBMISSION AFTER DISPUTE HAS ARISEN.

Fact of the Case:

The applicants, Lloyds Underwriters, sought to stay a suit filed against them in the Calcutta High Court by the respondent, Shree Bajrang Electric Steel Co. Private Ltd., on the ground of an arbitration agreement contained in a policy of marine insurance issued by Lloyds Underwriters.

Finding of the Court:

The court held that the arbitration clause in the policy of marine insurance did not refer to the particular kind of arbitration that is the subject of Protocol and Arbitration Clauses to which both India and the United Kingdom are signatories. The court found that the clause only stipulated a choice of legal forum in England, either English Arbitration under the English Arbitration Acts or legal proceedings in English Courts of law.

Issues: 1. Whether the arbitration clause in the policy of marine insurance constituted a submission to arbitration within the meaning of Section 3 of the Arbitration (Protocol and Convention) Act, 1937? 2. Whether the Protocol Arbitration applied to the case?

Ratio Decidendi: 1. The court held that the arbitration clause in the policy of marine insurance did not constitute a submission to arbitration within the meaning of Section 3 of the Arbitration (Protocol and Convention) Act, 1937, as it did not contemplate Protocol Convention such as is contemplated by the Act. 2. The court held that the Protocol Arbitration did not apply to the case as the clause only stipulated for English Arbitration in England or trial of the dispute in English Courts of law in England.

Final Decision: The court dismissed the application for stay of suit filed by the applicants.

P. B. MUKHARJI, J.

( 1 ) THIS is an application by seven per sons" (1) Leonard Henry George Mazotti, (2) Henry Twiggs Tribble, (3) Kenneth Lloyds Lancashire,. (4) Percy Frederick Cannier, (5)-William Lenson Arnold Derby, (6) Leonard Ernest Hart, and (7) Anthony Eugine Myddelton Gale under the Indian Arbitration (Protocol and Convention) Act of 1937. It invokes Section 3 of the Indian Arbitration (Proto col and Convention') Act of 1937 for stay of a pend ing suit in this Court.

( 2 ) THE matter relates to an Arbitration Agreement said to be contained in the Policy of Marine Insurance dated the 1st April, 1953 issued in favour of Metemicals Ltd. , by Lloyds underwriters to cover certain risks for shipment.

( 3 ) IN this application the petitioners want to stay the suit No. 1337 of 1956 instituted in this Court oh or about the 16th May, 1956.

( 4 ) I have come to the conclusion that this application must fail on many grounds.

( 5 ) MY first reason is that this suit was instituted by the plaintiff Shree Bajrang Electric Steel Co. Private Ltd. , the respondent to this application, against four different defendants of which Lloyds Underwriters are the third defendant. I, therefore, cannot see any reason why on the application of the Lloyds Underwriters, only one of four defendants, the entire suit should be stayed. That would mean staying the suit against the other defendants who are neither parties to the Arbitration Agreement nor with whom there can be any Arbitration. Therefore the suit in so far as it is against the other three defendants cannot be stayed on the ground that there is an arbitration agreement between the plaintiff and the present applicants. That means that at best the applicants can ask for a stay of the suit against themselves and no others. That is a course which has its peculiar difficulties mainly because that must mean trial of a suit piecemeal, stay of a suit against only this defendant, and prosecution of the suit with regard to other defendants, I consider such a procedure most undesirable and unfair unless there are cogent reasons to the contrary. I find no such cogent reasons in this case.

( 6 ) MY next reason is that the entire appli- cation is incompetent and is misconceived under the Indian Arbitration (Protocol and Convention) Act of 1937. The relevant clause in this case reads. as follows;--"all disputes must be referred to England for settlement, and no legal proceedings shall be taken to enforce any claim except in England, where the underwriters are alone domiciled and carry on business. "

( 7 ) THE language of this clause does not refer to the particular kind of - Arbitration that is the subject of Protocol and Arbitration Clauses to which I understand both India and the United Kingdom are signatories. The language appears to me to do nothing more than stipulate a choice of legal forum in England. That legal forum may be an English Arbitration under the English Arbitration Acts or in the public Courts in England. Whatever view one takes whether it is an English Arbitration in England or a legal proceeding in English Courts of law, this much is clear beyond doubt that it is not the Protocol Arbitration within the meaning of the Arbitration (Protocol and Convention) Act of 1937 under which the present application is made. No doubt when two Courts have concurrent jurisdiction to deal with a dispute, the parties may agree by a contract that Courts of a particular land should decide that dispute. That law is well-settled in India and is also the law in England which would appear from the decision of the English Court of Appeal in - 'austrian Lloyd Steamship Co. v. Gresham Life Assurance Society, Ltd. ', (1903) 1 KB 249 (A ). There the clause was:"for all disputes which may arise out of the contract of insurance, all the parties interested expressly agree to submit to the jurisdiction of the Courts of Budapest having jurisdiction in such matters. "the English Court of Appeal held that such a co





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