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High Court Of Calcutta
A. K. GANGULY, DEBIPRASAD SENGUPTA
GREAT EASTERN SHIPPING CO LTD - Appellant
Versus
BOARD OF TRUSTEES FOR THE PORT OF CALCUTTA - Respondent
G. A. 1356 Of 2003
Decided On : 09/10/2003
ARBITRATION - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Interpretation - Failure of Party to Act under Agreed Procedure - Role of Chief Justice or Designate - Period of 30 Days - Applicability - Adjudication by Court - Scope - Appealability of Order under Clause 15 of Letters Patent.
Fact of the Case:
Dispute arose between appellant and respondent under a Charter Party dated 12.02.2002. Appellant wrote letters to respondent requesting resolution of dispute through arbitration as per the Charter Party. Respondent did not appoint an arbitrator. Appellant filed an application under section 11 of the Arbitration and Conciliation Act, 1996 (ACA) for appointment of an arbitrator. Learned Single Judge held that the Chairman of the Board of Trustees for the Port of Kolkata is entitled to appoint an arbitrator within 4 weeks from the date of communication of the judgment and order, rejecting appellant's prayer for reference of the application to the Hon'ble Chief Justice for appointment of an arbitrator.
Finding of the Court:
The learned Single Judge erred in holding that the appellant should have waited for a period of 30 days before approaching the Chief Justice for appointment of an arbitrator. The period of 30 days is not mentioned in sub-section (6) of section 11 of ACA, 1996, which applies to the present case. The learned Single Judge also erred in adjudicating on the issue of whether the letters written by the appellant contained a request for arbitration. Such adjudication is beyond the scope of section 11 of ACA, 1996 in view of the ratio of the Constitution Bench in Konkan Railway.
Issues: 1. Whether the learned Single Judge erred in holding that the appellant should have waited for a period of 30 days before approaching the Chief Justice for appointment of an arbitrator? 2. Whether the learned Single Judge erred in adjudicating on the issue of whether the letters written by the appellant contained a request for arbitration?
Ratio Decidendi: 1. The period of 30 days is not mentioned in sub-section (6) of section 11 of ACA, 1996, which applies to the present case. Section 11 (6) (a) of ACA, 1996 is attracted when a party fails to act as required under the agreed procedure for appointment of an arbitrator. In such a case, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. 2. The function of the Chief Justice or his designate to make the nomination of an arbitrator is not an adjudicatory function. All that the Chief Justice or his designate has to do, is to find whether the correspondence between the parties annexed to the petition, bear out that there has been a request to make the appointment and there is a failure.
Final Decision: Appeal allowed. Order of the learned Single Judge set aside. Application under section 11 of the ACA, 1996 filed by the appellant to be sent forthwith to the Hon'ble the Chief Justice for appointment of an arbitrator to decide the dispute/difference between the parties arising out of the Charter Party dated 12.02.2002.
( 1 ) THIS appeal has been filed by the Great Eastern shipping Company Limited a Company incorporated under the Companies Act, 1956, against the judgement and order dated 07. 04. 2003 passed by a learned single Judge of this Court.
( 2 ) BY the impugned judgement, the learned Single Judge, inter alia, held that, in the facts and circumstances of the case, the Chairman of the Board of trustees for the Port of Kolkata is entitled to appoint an arbitrator in accordance with the arbitration clause in Charter Party within a period of 4 weeks, from the date of communication of His Lordship's judgment and order and the appellants' prayer for reference of the application to the Hon'ble Chief Justice for appointment of an arbitrator was rejected.
( 3 ) SINCE impugned judgement of the learned Single Judge has been stayed pending this appeal, no arbitrator has yet been appointed.
( 4 ) THE material facts of the instant case are that under a Charter Party dated 12. 02. 2002, the appellant gave on hire a tug to the respondent on terms and conditions contained in the said Charter Party.
( 5 ) THE case of the appellant is that the said tug came to the jetty on 14. 02. 2002 and the said tug was made available to the respondent at the dock premises of haldia on and from 14. 02. 2002 and the Charter hire at the agreed rate stipulated in the said Charter Party is payable from the said date. But, the respondent refused to make the payment of the hire charges of the said tug for the period between 14. 02. 2002 to 26. 07. 2002 as the said tug was not allowed to be utilised by the respondent in view of some agitations of some of the employees of the respondent.
( 6 ) ARBITRATION clause in the said Charter Party is contained in clause 20 and clause 20 of the agreement runs as follows :-"any dispute or difference of any kind whatsoever arising between the charterer and Contractor in connection with or arising out of the Contractor, the execution of the contract whether during the execution of Contract or after completion and whether before/after the determination, abandonment or breach of contract will be referred to the sole arbitrator to be appointed by the Chairman, KOPT on behalf of the Charter. The arbitrator shall be final and binding on all parties and the provisions of the Arbitration and conciliation Ordinance, 1996 and the Rules thereunder and any statutory modifications thereto shall be deemed to be incorporated in the agreement. The Arbitration proceedings shall take place in Kolkata. The Contractor shall, notwithstanding any dispute between them and the Charterer or pendency of any dispute referred to arbitrator, proceed with the execution of the Contract. Pendency of any dispute or reference shall not be a ground or an excuse for not executing the Contract till the stipulated period. "
( 7 ) IN view of the aforesaid arbitration clause, a letter dated 07. 08. 2002 was written by the President of the appellant to the Chairman of the respondent. In the said letter, it was mentioned that the dispute regarding the unpaid Charter hire and interest for the period between 14. 02. 2002 to 26. 07. 2002 remained unresolved. It was also mentioned that the dispute is about 6 months old and that the situation demands resolution in accordance with "charter Party agreement dated 12th February, 2002". Thereafter, another letter dated 20. 08. 2002 was sent by the President of the appellant to the Chairman of the respondent referring to various previous letters in connection with the said charter Party dated 12. 02. 2002 and a request was made to take the requisite steps for resolution of dispute in accordance with the "contract". Thereafter, another letter dated 21. 11. 2002 was addressed by the appellant to the Deputy chairman of the respondent regarding payment of Charter Hire with effect from 14. 02. 2002. In the said letter, a request was made for releasing the Charter hire payment at least with effect from 27. 02. 2002. I
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