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High Court Of Delhi
STATE TRADE CORPORATION OF INDIA LIMITED - Appellant
Versus
STORA KVANRANSVEDEN - Respondent
Interim Application 10454 of 1994
Decided On : 04/05/1995
ARBITRATION - EXISTENCE OF ARBITRATION AGREEMENT - CONTRACT - INTERPRETATION - PRIMA FACIE CASE - STAY OF ARBITRATION PROCEEDINGS:
Fact of the Case:
Petitioner sought a declaration that there was no valid arbitration agreement between the parties and sought to stay arbitration proceedings initiated by the respondents. The petitioner contended that there was no concluded contract containing an arbitration clause, while the respondents asserted the existence of a valid contract with an arbitration clause.
Finding of the Court:
The court found that the parties had entered into a contract for the purchase and sale of newsprint, which included an arbitration clause. The court held that the contract was concluded and executed by both parties, and that the arbitration clause was valid and binding.
Issues: 1. Whether there was a valid arbitration agreement between the parties. 2. Whether the contract between the parties contained an arbitration clause.
Ratio Decidendi: The court held that the existence of a contract between the parties was not in dispute, and that the contract included an arbitration clause. The court found that the parties had acted upon the contract, and that the petitioner had invoked the force majeure clause contained in the contract. The court also noted that the petitioner had not denied the existence of the arbitration clause in its reply to a notice served by the respondents.
Final Decision: The court dismissed the petition and the interim application filed by the petitioner, holding that there was a prima facie case for the existence of a valid arbitration agreement between the parties.
( 1 ) IN the petition under Section 33 of the Indian Arbitrationact (hereinafter referred to as "the Act"), seeking declaration that there is no validarbitration agreement between the petitioner and respondent No. 1; that thealleged arbitration agreement contained in the proposed contract is of no effect; adeclaration that there is no contract and/or privity of contract much less a validarbitration agreement between the petitioner and respondents 2-4; that the Indiancouncil of Arbitration has no jurisdiction to arbitrate on the claims against thepetitioner, of respondents 1-4, as contained in the statement of claim filed before theica in matter titled "stora Kvarnasvenden AB and Others v. STC of India Ltd. "case No. 1ca/ac/452; and that the arbitration proceeding before the Indiancouncil of Arbitration in Case No. 1ca/ac452 is illegal and without jurisdiction,on the grounds that there is no arbitration agreement between the petitioner andrespondent No. 1 and there is no privity of contract much less an arbitrationagreement between the petitioner and respondents 2-4, the petitioner, by this I. A. under Section 41 of the Act, seeks stay of the arbitration proceedings pendingbefore the Indian Council of Arbitration being titled "stora Kvarnasvenden AB andothers v. STC of India Ltd. ", Case No. 1ca/ac/452 and also restraining therespondents from proceeding with the same in any manner till the final disposal of ,the main petition.
( 2 ) THE say of the petitioner is that in May, 1991, petitioner was required toimport standard news print on an emergent basis; that the petitioner issued atender Notice dated 26. 2. 1991 inviting offers for upto 40,000 MT standard newsprint as per its stated requirement/specifications; that respondent No. 1 submittedits offer dated 11. 3. 1991 for 15000 MT standard newsprint through its Indian agentanika Internation Pvt. Ltd. for supplies to be made by it through certain Scandinavian Producers; that respondent No. 2 negotiated with the petitioner through itsagent Anika; that the quantity in the abovesaid offer was subsequently enhancedby respondent No. 1 to 20,000 MT; that the petitioner placed an order for 20,000 MTof standard newsprint with respondent No. 1 vide telex dated 30/31. 3. 1991, whichcontained various terms relating to price and deliver; that all other terms andconditions were to be separately agreed to; that respondent No. 1 informedpetitioner through Anika s letter dated 15. 4. 1991 that their principal i. e. Stora wasnot agreeable to certain terms and that it was returning the contract (three copies)with the request that the proposed contract be modified; that respondent No. 1 inthis manner declared that there was no consensus-ad-idem of the parties withrespect to the other contractual terms. Therefore, in the circumstances, there wasno agreement between the parties except as to price and delivery terms and penaltyfor late delivery; that petitioner did not effect any modification in the proposedcontract and returned the copies of the proposed contract for acceptance andsignatures by respondent No. 1; that respondent No. 1 did not sign the same andreturned the same to the petitioner; that on 20. 10. 1991 petitioner asked for signedproposed contract as it had to satisfy various governmental agencies. That Anika,through its letter dated 11. 2. 1991 informed the petitioner that respondent No. 1 hadnot yet signed the proposed contract as it found certain ambiguities therein. Thatin a malafide manner and for ulterior purposes, respodent No. 1 has filed copy ofthe proposed contract purported to be signed by it although all along respondentno. 1 refused to sign it as a token of its acceptance and returned it to the petitioner,be speaking of a belated and misconceived effort to invoke the arbitration clause inthe proposed contract; that the only contract between the petitioner and respondent No. 1 is contained in the telex order i. e. the telex order dated 30-31. 3. 1991,which accepts
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