INTERNATIONAL NUT ALLIANCE LLC Vs. BEENA CASHEW COMPANY

JUDGEMENT

(1.) Challenge in these Civil Miscellaneous Appeals is to the common order passed in Arbitration Original Petition Nos. 185 & 333 of 2010 by the Principal District Court, Tuticorin. The first respondent herein as petitioner has filed Arbitration Original Petition No. 185 of 2010 on the file of the Court below under Section 34 of the Arbitration and Conciliation Act, 1996 praying to set aside the arbitral award dated 11.05.2010 passed by the respondents 3 to 5. Likewise, the first respondent in Arbitration Original Petition No. 185 of 2010 as petitioner has filed Arbitration Original Petition No. 333 of 2010 under Section 9 of the Arbitration and Conciliation Act, 1996 praying to pass an interim order of attachment in respect of properties mentioned therein and also to direct the respondent to furnish sufficient security in pursuance of arbitration award dated 11.05.2010.

(2.) In Arbitration Original Petition No. 185 of 2010 it is averred that the petitioner is an exporter of cashew and its place of business situates at Kadambad Nadu, Pattanamthitta District, Kerala State. The petitioner has exported 700 cartons of cashew kernels of American standard W240 to the first respondent in March 2008 from the Port of Tuticorin. The petitioner has exported the same in accordance with the specification agreed upon under a sale contract dated 22.02.2008. The petitioner has obtained necessary certificates. The petitioner has issued an invoice dated 15.04.2008 in favour of the first respondent for 1,03,250 U.S. dollers. The payment of sale of cargo has been made on "Cash Against Documents" (C.A.D.) within 30 days. The petitioner has sent all documents through its bankers viz., South Indian Bank, Kollam on 17.04.2008. The time for payment has become expired on 22.05.2008. The first respondent after receipt of cargo has sold the same to its customers and realised the sale price. The customers of first respondent at Elpaso Port, managed to take delivery of the container on 20.05.2008 without making payment. The petitioner has received an E-mail from the first respondent on 20.05.2008 stating that the cargo has been de-stuffed and rejected. The first respondent and its customers have collected cargo without making payment. The petitioner reserves its right to sue against the first respondent and its buyers in USA. The petitioner has received 1,03,250 US dollars through normal banking channels on 03.06.2008. If there is any. defect in cargo, the first respondent is bound to ask the petitioner for having joint survey. The first respondent has erroneously stated that fumigation of cashew with Methyl Bromide is not permissible and the same is not in accordance with AFI terms. The first respondent has insisted the petitioner to take back and replace the entire cargo. The petitioner has not acceded the same. The first respondent has sold cargo to third parties and it has also paid entire sale price. The first respondent has had no interest or title in the cargo, since already sold out. The first respondent has no locus standi to raise dispute against the petitioner by way of arbitration on behalf of third parties. At this juncture, a demand for arbitration has been made by the first respondent. The second respondent has sent a notice of arbitration on 07.01.2010 and thereby fixed date of hearing on 16.02.2010. The petitioner has sent an interim reply dated 09.02.2010 denying the existence of arbitration clause under the contract in question. The petitioner has not served with claim statement and documents filed in support of the claim in question. Under the said circumstances, the petitioner has not been able to submit a detailed reply. The second respondent is nothing but an appointing authority and not an arbitrator and has no jurisdiction to decide the contentions of the petitioner. The second respondent has constituted a panel of 3 arbitrators to decide the dispute. The petitioner has not been able to visit USA on 01.05.2010. The petitioner has not known the names of arbitrators. The petitioner has sought for adjournment through E-mail. The petitioner has not received any communication from the second respondent. The respondents 3 to 5 have been appointed as arbitrators without notice to the petitioner and thereby passed an ex parte arbitral award dated 11.05.2010. The award passed by the respondents 3 to 5 is totally illegal. Under the said circumstances, the present Petition has been filed for getting the relief sought for therein.

(3.) In the counter filed on the side of the first respondent it has been specifically stated that with regard to import cashew to the first respondent a concluded contract has been executed, wherein a Clause is available in explicit terms for referring any dispute to arbitration. Further the remaining averments made in the petition are denied expressly.