Back
HIGH COURT OF CALCUTTA
BOSE, DEBABRATA MOOKHERJEE, JJ.
Swedish East Asia Company Ltd. - Appellant
Versus
B R Herman And Mohatta India Private Ltd - Respondent
Decided on : Jan 05, 1962
STAY OF SUIT - CONTRACT CONTAINING ARBITRATION CLAUSE - JURISDICTION - CONVENIENCE OF PARTIES AND WITNESSES - PUBLIC POLICY - LIMITATION.
Fact of the Case:
The appellant, a Swedish company, entered into a contract of affreightment with a Swedish citizen to carry cargo from Sweden to Calcutta. The bill of lading issued by the appellant contained a clause providing that any dispute arising under the bill of lading would be decided in Sweden according to Swedish law. The cargo was short-landed in Calcutta and the respondent, the endorsee of the bill of lading, filed a suit in the Calcutta High Court for recovery of the value of the short-landed goods. The appellant applied for a stay of the suit pending institution and disposal of appropriate proceedings in Sweden in terms of the contract.
Finding of the Court:
The Calcutta High Court refused to stay the suit, holding that the appellant had not made out a case for superseding the chosen forum.
Issues: 1. Whether the Calcutta High Court had jurisdiction to entertain the suit in view of the arbitration clause in the bill of lading? 2. Whether the appellant had made out a case for stay of the suit on the ground of convenience of parties and witnesses? 3. Whether the arbitration clause in the bill of lading was contrary to public policy? 4. Whether the respondent's claim would be barred by limitation if it were to file a suit in Sweden?
Ratio Decidendi: 1. The Calcutta High Court had jurisdiction to entertain the suit as part of the cause of action arose within its jurisdiction. 2. The appellant had not made out a case for stay of the suit on the ground of convenience of parties and witnesses. The evidence of the shipper, who was a Swedish citizen, was crucial to the case and it was not certain that he would be available to testify in Calcutta. The evidence of the Port Commissioners and the Customs authorities would also be relevant. 3. The arbitration clause in the bill of lading was not contrary to public policy. The parties had freely entered into the contract with their eyes wide open and there was no suggestion of bad faith or malafide. 4. The question of limitation was left open to be decided by the Swedish court if the respondent were to file a suit there.
Final Decision: The appeal was allowed to the extent that the suit was stayed subject to the condition that it would proceed only if the suit to be filed in Sweden was held barred by time.
1. THIS is a defendant's appeal from an order refusing stay of a suit pending institution of another in a foreign court and the obtaining of a decision in that Court.
2. THE appellant, a firm incorporated in Sweden, carrying on business under the name and style of Swedish East Asia Co. Ltd., entered into a contract of affreightment with a Swedish citizen of the name of A. B. Cottram, where by it undertook to carry 1034 bundles of M. S. Flats shipped by A. B. Cottram on the defendant's vessel S. S. "kyoto", then at the Swedish port of Gothen-burgh. The cargo was to be carried to Calcutta and delivered to the order of the shipper subject to certain terms and conditions imposed in a bill of lading dated April 28, 1956, issued by the petitioner Company to Cottram, the shipper. The vessel reached the port of Calcutta on July 4, 1956 and the plaintiff Company obtained delivery of the consignment less 14 bundles which were said not to have been carried or delivered. There was some correspondence between the parties and a demand for payment of a sum of Rs. 12, 849/13/- having eventually been refused on account of the short-landed goods, a suit was instituted by the plaintiff Company on the Original Side of this Court, being Commercial Cause No. 1273 of 1957, on the 19th July 1957. The suit was brought with leave under Clause 12 of the Letters Patent and a decree for the sum stated was asked for. In the alternative, a prayer was made for enquiry as to the sum exactly due and a decree for such sum, as may be found ultimately due.
The main averments in the plaint are that the plaintiff Company became the owner of the entire consignment being the endorsee or the holder for value of the bill of lading. The endorsement took place in Calcutta and despite efforts made to obtain delivery of the entire consignment, the plaintiff Company failed to do so. It is alleged that the defendant Company, in breach of its duty as common carriers, failed to carry the 14 bundles of M. S. Flats covered by the bill of lading safely and securely and neglected to deliver the said bundles and converted them to its own use. It is said that the defendant carries on, business in Calcutta within the Court's jurisdiction through its Agent United Liner Agencies of India (Private) Ltd. at Brabourne Road, and that the failure to deliver the 14 bundles involved a breach of the contract contained in the bill of lading and as such a part of the cause of action having arisen within jurisdiction, leave was asked for and obtained to institute the present proceeding.
3. THE Writ of Summons was served on the defendant Company on the 12th August 1957 and the written defence was filed on the 18th November of that year. The defendant Company denied liability and stated that the United Liner Agencies of India (Private) Ltd. were merely its shipping agents and, therefore, agents for a limited purpose. The case the defendant made was that it did not carry on business in Calcutta.
4. IT was asserted that the entire quantity of cargo had been duly discharged at the Calcutta port and the obligations under the contract had been fulfilled. There was a firm denial of any breach of contract or duty or of negligence and it was said that the bundles having been insufficiently packed, several of them had become loose. The suggestion was that the cargo had not been properly packed and shipped and, in any event, the defendant Company was not liable to pay the amount for which the suit had been brought by the plaintiff. It was further stated that the bill of lading which constituted the contract, having provided that any dispute arising on the said bill of lading would be decided in Sweden according to Swedish law, the plaintiff Company was not entitled to pursue its claim, if any, in this Court and, in any event, the suit thus brought in breach of the agreement ought to be stayed.
A notice of motion was taken out on the 19th March 1959 for moving an application for stay of the suit and a
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
