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2018 Supreme(Cal) 615
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
Soumen Sen, J.
Sifandros Carrier Ltd. – Petitioner
Versus
LMJ International Ltd. – Defendant
G.A. No. 514 of 2017 & E.C. No. 975 of 2015
Decided On : 03-10-2018
For the Petitioner:Amitava Majumdar, Damayanti Sen, Souvik Kundu, Dipam Sengupta, Advocates.
For the Defendant :Anindya Kumar Mitra, Surojit Nath Mitra, Sr. Advocates. D.N. Sharma, Sananda Mukhopadhyay, Tarun Aich, Advocates.
Headnote:
The Court held that the award-holder was entitled to enforce the foreign award against the award-debtor as the award-debtor had waived its right to object to the composition of the arbitral tribunal by not raising such objection before the tribunal.
Fact of the Case:
The award-holder, a shipping company, chartered a vessel to the award-debtor, a trading company, for the carriage of iron ore fines in bulk from Haldia and Paradip, India to a safe port in China. Disputes arose between the parties and the award-holder initiated arbitration proceedings in London, England, as per the arbitration clause in the charter party. The award-debtor did not participate in the arbitration proceedings and the arbitral tribunal made an award in favor of the award-holder. The award-holder then filed an application in India to enforce the foreign award under Section 48 of the Arbitration and Conciliation Act, 1996.
Finding of the Court:
The Court held that the award-debtor had waived its right to object to the composition of the arbitral tribunal by not raising such objection before the tribunal. The Court noted that the award-debtor had received numerous opportunities to participate in the arbitration proceedings, but had chosen not to do so. The Court also noted that the award-debtor had not raised any objections to the composition of the tribunal in its communications with the award-holder or the tribunal. The Court further held that the award-debtor's contention that there was no concluded charter party agreement between the parties was untenable, as the parties had clearly agreed to the arbitration clause in the charter party.
Issues: 1. Whether the award-debtor had waived its right to object to the composition of the arbitral tribunal by not raising such objection before the tribunal? 2. Whether there was a concluded charter party agreement between the parties?
Ratio Decidendi: 1. The Court held that the award-debtor had waived its right to object to the composition of the arbitral tribunal by not raising such objection before the tribunal. The Court noted that the award-debtor had received numerous opportunities to participate in the arbitration proceedings, but had chosen not to do so. The Court also noted that the award-debtor had not raised any objections to the composition of the tribunal in its communications with the award-holder or the tribunal. 2. The Court held that there was a concluded charter party agreement between the parties, as the parties had clearly agreed to the arbitration clause in the charter party.
Final Decision: The Court dismissed the award-debtor's application to set aside the foreign award and allowed the award-holder to enforce the award against the award-debtor.
1. This is an application under Section 48 of the Arbitration and Conciliation Act, 1996 challenging the enforceability of a foreign award dated 21st September, 2012 as amended by the amending award dated 20th November, 2012. The grounds for challenge are:-
(a) That there was no concluded contract on 2nd April, 2008 between the parties.
(b) That there was no valid invocation of the alleged arbitration clause and, accordingly, the appointment of Mr. Christopher Moss was bad, invalid and illegal.
(c) That the tribunal was not properly constituted.
(d) That the Tribunal did not consider the objection raised by the petitioner as to the legality and validity of the charter-party dated 2nd April, 2008 as well as the arbitration clause and the composition and constitution of the arbitral tribunal.
2. Although, various grounds have been taken in the petition but arguments have been advanced essentially on two points, namely, the constitution of the arbitral tribunal and that there was no valid concluded contract.
3. Before considering the objections raised by the petitioner, it is necessary to briefly indicate the facts.
4. The transaction between the parties relates to a voyage charter party dated 2nd April, 2008 by which Sifandros Carriers Ltd. (hereinafter referred to as the “award-holder”) chartered the vessel M.V. Gant Vision to LMJ International Ltd. (hereinafter referred to as the “award-debtor”) for the carriage of iron ore fines in bulk from Haldia and Paradip, India to a safe port in China. In the transaction between the parties, M/s. Anthony Giavridis Maritime Inc. (hereinafter referred to as “AGM”) acted as a broker for the award-holder and M/s. Trampline of New Delhi (hereinafter referred to as “Trampline”) acted as the agent of the award-debtor.
5. On 31st March, 2008, Trampline, by an email addressed to AGM, informed them about a potential charterer and enquired about the availability of suitable vessels for shipment of iron ore fines. Trampline promised to send full details should the award-holder be interested to carry the award-debtor’s cargo. By a further email of 31st march, 2008, Trampline forwarded a firm indication that the award-debtor is interested in shipping its cargo using the award-holder’s vessel and sent the terms of the possible fixture along with the details of the award-debtor for the consideration of the award-holder. In clause 25 of this fixture note, Trampline proposed that arbitration be held in Singapore and English Law be applicable, with other details being as per the pro-forma charter party. In reply, AGM proposed certain terms of carriage and amended Clause 25 of the draft fixture sent by Trampline to provide for arbitration in London instead of arbitration in Singapore, with the applicable law continuing to be English law. In addition to the aforesaid, AGM suggested freight from the proposed USD 52/PMT to USD 54.5/PMT. In response to the said email, Trampline sent two subsequent emails on 31st March, 2008 proposing amendments to certain terms of carriage specified in the draft fixture, by reversing the freight charges and inserting an option for the charterers, i.e. the award-debtor, to pay the freight in Euros. However, Clause 25 of the said fixture, which stipulated arbitration in London under English Law, was accepted without any modification by Trampline.
6. Thereafter, at 16:01:23 hours (that is, 20:32 India Time), Trampline recorded the terms which had been negotiated between the parties and by its further email sent at 20:32:25 hours on 1st April, 2008, Trampline requested time till 1600 hours IST of the following day for lifting the said cargo. In other words, Trampline sought time till 1600 hours IST for final acceptance by the award-debtor. Pursuant to a telephonic conversation, AGM, on 1st April, 2008, agreed to grant time till 12 noon Greek time on 2nd April, 2008 for the award-debtor to confirm the terms of the Charter party. Trampline by an email of 2nd April, 2008 at 10:35 ho
