OCEAN WIND MARITIME SA

OCEAN WIND MARITIME SA
v
GUJARAT CHEMINEX LTD 

COURT OF APPEAL
WIMALACHANDRA. J
CA 102/2005 LG
HCADMIRALTY COLOMBO
ACTION IN REM 21/2004
DECEMBER 5 , 2005  

Arbitration Act·, No. 11 of 1995 - Sections 5, Sections 39 - Bill of lading - Does it incorporate an arbitration clause - Does High Court (Admiralty) have jurisdiction - Without referring to arbitration ? - Cause of action - Non disclosure of cargo - Arbitration clause inoperative - Delay ?. 

The plaintiff com pany entered into a voyage Charter Party in India by which the owners of the vessel hired the vessel to the plaintiff. In terms of the "charter
 

Party" the vessel was to carry a cargo of 1500 Mt. of salt for Port of K to the Port of C. 14 bills of Jading were issued and a freight invoice was also issued. The plaintiff contended that, the receiver of the Cargo at Port C received only 9500 Mt of Cargo and the owners of the vessels/agents have sold the remaining Cargo to third parties and instituted action in the High Court (Admiralty). The 2nd defendant - respondent objected to the jurisdiction of the High Court hearing this matter on the ground that the Charter Party entered into between the plaintiff and the owners of the vessel contains an Arbitration Clause, hence the High Court has no jurisdiction. The High Court rejected the objection - the defendant - petitioners moved by way of leave to appeal in the Court of Appeal.

Held:

(1) The plaintiff is the charterer of the vessel as well as the shipper. In its capacity as the charterer the plaintiff had entered into a charter party agreement with the defendant.

The bill of lading incorporates an arbitration clause in the charter party agreement as condition one of the bill of lading. The arbitration clause does not become inoperative or inapplicable. High Court of Colombo Admirality) has no Jurisdiction.

(2) There was in fact a final discharge of the entire consignment as the receiver at Port C has stated that only 9500 Mt. was received by him, the owners of the vessel/agents have sold the remaining cargo to third parties. Thus there is in fact a final discharge of the entire consignment - this the - plaintiff was aware.

(3) The time period 'referring disputes' within twelve months after final discharge in the arbitration agreement will not enforce a time bar.

LEAVE TO APPEAL from an order of the Commercial High Court (Admiralty).

Shibly Aziz PC with Rohana Devapriya for defendant - petitioner.

S. Piyasena for plaintiff - respondent

Cur. adv. vult.

November 2, 2007
Wimalachandra, J.

This is an application for leave to appeal filed by the defendant - petitioners (petitioners) from the order of the learned High Court Judge of Colombo.

dated 7.3.2005. By that order the learned High Court Judge overruled the preliminary objection raised by the petitioners and held that the High Court had jurisdiction to hear and determine the aforesaid action and determine the issues arising out of the Bill of Lading .

When this application for leave to appeal was taken up for inquiry the Court of Appeal granted leave to appeal on the following two questions of law.

(a) Does the Bill of Lading incorporate (include as part of the agreement) an Arbitration Clause, and if so does the High Court (Admiralty) have jurisdiction to hear and determine this action, without referring the matter for Arbitration ?

(b) As the Rider Clause 36 of the charter Party agreement states that all disputes arising out of the Charter Party which cannot be amicably resolved shall be referred to arbitration in London within twelve months of the final discharge of the cargo was there a final discharge of the cargo for the arbitration clause No . 36 in the Charter party to come into effect ?

Briefly , the facts are as follows :

The plaintiff is a company duly incorporated in India. The motor Vessel Ocean Wind ", which is a ship in connection w

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