The effectiveness of the lien and the liability of the Charterer for demurrage even after loading at the port of loading, if the owner was unable to obtain payment of demurrage by exercising the lien ninety days after discharge of goods.

Anil Kumar, J. (Oral)-

This is a petition under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the arbitral award dated 15th November, 2002 passed by a majority of arbitrators, Mr. P.M. Abraham and Mr. N. Sukumaran, in the matter of disputes relating to M.V. Dehkhoda-Charter Party dated 17th May, 1995.

2. The petitioner is a Government Company engaged in the business of import and export of several commodities. The respondent is a company incorporated under the laws of Iran and is in the business as carriers by sea.

3. The brief facts of the case are that the petitioner entered into a contract No. 10/1995 with the Ministry of Food, Government of Bangladesh for export of 50,000 MT of non-Basmati rice. With a view to fulfil its contractual obligations, the petitioner entered into a Charter Party agreement dated 17th May, 1995 with the respondent who leased out MV vessel, Oehkhodi1 for carriage of 12,300 MT of bagged rice from - safe berths, safe Anchorages Madras to - safe berths, safe Anchorages Chittagong and / or Mongla.

4. As per the petitioner the M.V. Dehkhoda arrived at the Madras port on 20th May, 1995 and on completion of loading of the cargo at the Madras port on 7.6.1995 the vessel M.V. Dehkhoda proceeded to the first discharge port at Chittagong in Bangladesh where it arrived and after the cargo was discharged on 28.6.1995 the vessel proceeded to the last and final discharge port Mongla where the discharge was completed on 20.7.1995.

5. As per the respondents since the vessel utilized 12 days, 19 hrs. and 40 min in excess allowable lay time, the respondents had earned a demurrage of US $ 57,6901- and after giving credit to the petitioner herein for commission on freight, dispatch at the load port, brokerage on commission, the amount due and payable by the petitioner to the respondent was a sum of US $ 92,440.51 which was claimed by the respondent from the petitioner.

6. A certificate report dated 9th August, 1995 was issued by the SGS limited which inspected the cargo on board. Thereafter the Ministry of Food, Government of Peoples Republic of Bangladesh, made a provisional claims of US $ 1,92,699.78 on account of shortage of consignment of 727.169 MT bagged rice including 12.822 MT damaged and 303.278 MT beyond specification. It was also contended that the final claim will be preferred by the Ministry of Food as per the contract.

7. Thereafter the respondents vide letter dated 25.10.1995 addressed to M/s. J.M. Baxi and Co., respondents local agents, requested the petitioner to remit an amount of US $ 92,440.51. The respondents also sent along with the letter, the statement of account, lay time calculation and receipt of 90°/" freight. The petitioner intimated the respondents that the vessel had delivered 412.410 MT less cargo than the bills of lading quantity and intimated that 12.822 MT was received in a damaged conditions at Chitta gong and the Mongal Ports. A fax message dated 20th September, 1996 was sent to the respondents -local agents conveying that a sum of US $ 49,022.20 was processed and sent to F and A department for release of payment, however the same was provisional in nature.

8. An explanation was thereafter sought by the respondents towards reduction in the amount claimed (US $ 92440.51) and the amount authorized for remittance (US $ 49022.20) to which the petitioner replied explaining that the main difference was because the lay time was calculated from 20th June, 1996 in accordance with the remarks at port and not from 12.6.1995 as calculated by the owners and that the total overage premium deducted was US $ 8594.86. Thereafter the respondents sent a notice dated 2.5.1998 claiming the principal amount of US $ 92400.51 along with interest accrued therein at the rate of 24% per annum amounting to US $ 55,554.96 which became due to the respondents 90 days from the date of completion of discharge of cargo i.e. 22nd July, 1995 to 31st October 1995.

9. On account of failure o