JEVAN DREDGING LIMITED Vs. MERCATOR LIMITED

JUDGEMENT

(1.) Heard learned Counsel for the petitioner on this petition under Section 9 of the Arbitration and Conciliation Act , 1996 (for short, "the Act"). Respondent No.1 is served. Affidavit of service is tendered by the learned Counsel for the petitioner. However, none appears for respondent No.1. Respondent No.2-ICICI Bank Ltd. is represented by Advocate Mr.Siddharth Ranade. Respondent No.3 is the South Indian Bank Ltd. who has issued a bank guarantee in relation to which an urgent relief is sought at today's hearing.

(2.) The petitioner entered into a "Bare Boat Charter and Demise Agreement" dated 15 May 2019 with respondent No.1-Mercator Limited for a vessel in question namely "M.V. Vivek Prem" (for short "the said vessel"). Prior to this agreement petitioner was made aware of a charge of respondent No.2-ICICI Bank on the said vessel and that the same was mortgaged to respondent No.2-ICICI Bank. In this context, the Court's attention is drawn to a letter dated 19 April 2019 issued by respondent No.2-ICICI Bank in favour of respondent No.1 Mercator recording its no objection for the sale of the vessel by respondent No.1- Mercator Limited, however subject to certain conditions in regard to the amounts which were due and payable to respondent No.2-ICICI Bank. The contents of the said letter are required to be noted which read thus:-

(3.) It is on the above backdrop the petitioner entered into the "Bare Boat Charter and Demise Agreement" with respondent No.1- Mercator on 15 May 2019. The case of the petitioner is that Respondent no.1-Mercator did not inform the petitioner that Respondent no.1 Mercator had debts, other liabilities, which would adversely affect the sale of the suit vessel to the petitioner. It so transpired that after the possession of the vessel was handed over to the petitioner in May 2019, and after it was used for some time, the petitioner was taken by a surprise that a third party had instituted proceedings against respondent no./1-Mercator who had obtained an order for arrest of the said vessel which was in possession of the petitioner. before Gujarat High Court being Admiralty Suit No.AS 45 of 2019. He contends that this caused prejudice to the petitioner. The petitioner was never informed about any amounts which were due and payable by respondent No.1-Mercator to this third party and which would affect the sale of the vessel in favour of the petitioner.