PYRITES PHOSPHATES AND CHEMICALS Vs. EXCEL SHIPPING ENTERPRISE

JUDGEMENT

(1.) Petitioner, Pyrites Phosphates & Chemicals has filed the present petition under Section 11 of the Arbitration and Conciliation Ordinance, 1996 (for short the Act).

(2.) The petitioner is engaged In the manufacture of fertilisers and is entrusted by the government with the task of handling and distribution of imported fertilisers. In order to carry on its above business of receiving shipments of Imported fertilisers, the petitioner engages the services of various freight handling agents. The petitioner enters into a long term agreement with such agents who are entrusted with the task of handling the ships entering the port and in carrying on the completing of the formalities relating to discharge of the cargo from the vessel. The petitioner had engaged the services of the respondent for that purpose at the port of Porbandur vide agreement dated 8/10/1992. Under Article 9 of the Agreement between the petitioner and respondent 1 it was agreed that respondent no.1 shall be responsible for payment of the demurrage. Similarly in case of discharge of the vessel is completed before the agreed time, the vessel owners are liable to pay certain amount of despatch money. Respondent is also responsible for the liquidated damages in terms of Article 10. It is alleged that vide Article 15 all disputes and references arising between the parties under the contract including the breach thereof shall be settled by arbitration in accordance with provisions of Indian Arbitration Act. The agreement was to be governed by Indian laws.

(3.) During the term of the agreement the respondents handled a total of five vessels at the port. As a result of incompetence and inept handling of the said vessels by the respondent the said vessels could not discharge their cargo within the stipulated time. The vessels became entitled to demurrage. It is alleged that the Government of India has recovered the amount of demurrage from the petitioner in respect, of the five vessels. The petitioner has called upon the respondents to make the said payments but respondents have failed to make the payment. On the contrary, respondents filed, a suit before the Civil Judge at Porbandur. When the respondents did not make payment they served a legal notice and it had no effect claiming that the disputes have arisen and certain payments are due to the petitioner, It is prayed that an arbitrator should be appointed for adjudication of the dispute.