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High Court Of Calcutta
Baboo Lall Jain
ESSAR OIL LIMITED - Appellant
Versus
OWNERS - Respondent
Admiralty Suit 3 Of 1993
Decided On : 01/27/1995
FOREIGN AWARDS (RECOGNITION AND ENFORCEMENT) ACT, 1961 - ADMIRALTY JURISDICTION - STAY OF SUIT - ARBITRATION AGREEMENT - SECTION 3 - ENFORCEMENT OF FOREIGN AWARDS - ARBITRATION CLAUSE - LONDON AS THE SEAT OF ARBITRATION - ENGLISH LAW GOVERNING THE CHARTERPARTY AGREEMENT - APPLICABILITY OF THE NEW YORK CONVENTION - INTERPRETATION OF THE ACT AND THE CONVENTION.
Fact of the Case:
Essar Oil Limited and another filed an Admiralty Suit against the owners of the Barge 'Pegah' in the Calcutta High Court. An interim order was granted for the arrest of the barge. The owners of the barge applied for a stay of the suit under Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 (hereinafter referred to as the '1961 Act'). The plaintiffs contended that the 1961 Act was not applicable as the parties to the arbitration agreement were not from a country that was a party to the New York Convention.
Finding of the Court:
The Calcutta High Court held that the 1961 Act and the New York Convention were applicable to the case. The court found that the arbitration agreement was made in London, the arbitration was to be held in London, and the charterparty was to be governed by English Law. The court also held that the nationality of the parties to the agreement was immaterial and that the only relevant factor was the territory of the State where the arbitral award was made.
Issues: 1. Whether the Foreign Awards (Recognition and Enforcement) Act, 1961, and the New York Convention were applicable to the case. 2. Whether the arbitration agreement was valid and enforceable. 3. Whether the Admiralty Suit was maintainable in light of the arbitration agreement.
Ratio Decidendi: 1. The court held that the 1961 Act and the New York Convention were applicable to the case as the arbitration agreement was made in London, the arbitration was to be held in London, and the charterparty was to be governed by English Law. The court also held that the nationality of the parties to the agreement was immaterial and that the only relevant factor was the territory of the State where the arbitral award was made. 2. The court held that the arbitration agreement was valid and enforceable as it was in writing and signed by the parties. The court also held that the fact that the agreement was not signed was immaterial as the law only required the agreement to be in writing. 3. The court held that the Admiralty Suit was not maintainable in light of the arbitration agreement. The court held that the plaintiffs were not entitled to institute the Admiralty Suit in this Court nor were they entitled to obtain any interim order for arrest of the said ship, the suit is dismissed on the ground of lack of jurisdiction and/or non-maintainability.
Final Decision: The court stayed the Admiralty Suit and vacated the interim order for the arrest of the barge. The court also dismissed the suit on the ground of lack of jurisdiction and non-maintainability.
( 1 ) THE Court: This suit was instituted by Essar Oil Limited and another against the Owners man Parties interested in the Barge 'pegah' on September 17, 1993 and was marked as Admiralty Suit No. 3, 1993.
( 2 ) PURSUANT to the application made by the plaintiff in this suit an interim order was made by this Court on September 17, 1993 which was to the following effect:"there will be an order in terms of prayer (a) upon the undertaking of Mr. Roy Chowdhury's clients to indemnify the parties affected, in case it appears subsequently that the order of arrest has been obtained wrongfully by Mr. Roy Chowdhury's clients. "
( 3 ) THE facts of the case may be stated slimily as follows : on January 25, 1993, a Charterparty Agreement was arrived at between the plaintiff no. 2 Scindia Essar (ME.) Limited and Iraq Marine Services, the owners of Barge 'pegah'. The said Charterparty Agreement contained an Arbitration clause. It is not disputed that there was such a Charterparty Agreement between the plaintiff no. 2 and the said owners of Barge 'pegah'.
( 4 ) ON March 2, 1993 the said Barge 'pegah' arrived at Jellingham Yard of Burn Standard Company Limited on the River Hooghly.
( 5 ) ON September 6, 1993 the owners of the said Barge 'pegah' appointed Mr. Christopher Moss as arbitrator to adjudicate the disputes. By the said letter, the plaintiff no. 2 was called upon to appoint its own arbitrator in accordance with Cl. 26 (i) of the Charterparty Agreement failing which Mr. Moss was be Sole Arbitrator.
( 6 ) ON September 14, 1993 Mr. Bruce Haris was appointed as Arbitrator for and on behalf of the plaintiff no. 2 without prejudice to the rights and contentions of the plaintiff no. 2 and under protest challenging the jurisdiction of the learned arbitrators.
( 7 ) IT was after the appointment of the arbitrator by the plaintiff no. 2 that the instant suit was filed on September 17, 1993.
( 8 ) ON December 6, 1993, the plaintiff No. 2 forwarded written submissions to the said Arbitrators in London challenging the jurisdiction of the Arbitrators.
( 9 ) ON January 26, 1994 written submissions were forwarded to the Arbitrators for and on behalf of Iran Marine Services on the question of existence of contract and the jurisdiction of the Arbitrators.
( 10 ) ON February 23, 1994 an application was made before the Court for sale of the said barge. The said application was made on behalf of the plaintiff and directions were given to file affidavits. On February 23, 1994 the instant application was filed inter alia for stay of the suit under the provisions of the Foreign Awards (Recognition and Enforcement) Act, 1961, for dismissal of the suit and for vacating the order dated September 17, 1993.
( 11 ) THE Charterputy Agreement copy whereof is annexed to the petition shows that the place for entering upon agreement was London. The Agreement also provides as follows:"law and Arbitration. 26. 1. This Charter shall be governed by English Law and any dispute arising out of the Charter shall be referred to arbitration, in London, one arbitrator being appointed by each party, in accordance with the Arbitration Acts, 1950 and 1970 or any statutory modification or re-enactment thereof for the time being in force. On the receipt by one party of the nomination in writing of the other party's arbitrator, that party shall appoint their arbitrator within fourteen days, failing which the decision of the single Arbitrator appointed shall apply. If two Arbitrators properly appointed shall not agree they will appoint an Umpire whose decision shall be final. "
( 12 ) ON March 8, 1994 the Arbitrators in London, heard objections regarding jurisdiction as a preliminary issue and an order was passed rejecting the contentions of the plaintiff no. 2 and it was hell that the Arbitrators had jurisdiction to proceed with the arbitration proceedings.
( 13 ) ON April 12, 1994 Counter-statement and Counter-claim were filed on behalf of the plaintiff no. 2
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