CURZON MARITIME LTD Vs. PEC LTD

JUDGEMENT

(1.) THIS petition is filed under Section 48 of the arbitration and Conciliation Act, 1996 claiming a declaration that the arbitral awards dated 30th September, 2002 and 5th November, 2002 are enforceable as a decree of this Court.

(2.) THE facts that are material and relevant for deciding this petition are: the Petitioner, a company organised under the laws of United Kingdom, was Disponent owners of the vessel SHIKOKU PRIDE, which was chartered by them to Commodities Intertrade (India) Pvt. Ltd. on certain terms and conditions. The terms of this charter agreement provided for arbitration in london and English Law was to apply. The Respondent PEC Ltd. were the owners of a cargo of bagged sugar shipped on board the said vessel SHIKOKU pride at the port of Mumbai. The Commodities Intertrade (India) Pvt. Ltd. was acting as an agent of the Respondent in the shipment of the goods under the Bill of Lading. According to the Petitioner, the vessel SHIKOKU pride completed the loading of the Respondent's cargo at Mumbai on 21st December 2001 and arrived at Port Sudan on 31st December 2001. Though according to charter agreement, freight was to be paid to the petitioner within four banking days upon completion of loading and signing of bills of lading. Freight was not paid to the Petitioner even when the vessel arrived at Port of Sudan on 31st December, 2001. As per the terms of the charter agreement, if freight was not paid the vessel was entitled to drop anchor outside the territorial waters of Sudan and all time lost was entitled to be counted as detention at the rate of US$ 6,000. 00 per day. In this situation, therefore, according to the Petitioner, the Petitioner instructed the Master of the vessel to wait outside Port of Sudan. At this point of time, negotiations took place between the Petitioner and the Respondent and an agreement was reached between the parties on or about 9/ 10th January 2002 by which it was agreed by the Respondent that they would pay all freight under the charter party to the Petitioner and shall also pay the loadport demurrage. According to the Petitioner, the agreement that was reached between the Petitioner and the Respondent is set out in the letter dated 10-1-2002, which was signed by Mr. Lalit Dongre on behalf of the respondent. In view of this agreement reached between the parties the vessel entered the Port of Sudan and discharged the cargo. The Respondent by letter dated 15-1-2002 confirmed that the goods were shipped by them and requested the Petitioner to deliver the cargo to the receiver without production of the original Bill of Lading. The Respondent paid only the balance freight and the loadport demurrage to the Petitioner leaving a balance of US$ 115,777. 01 towards charges of detention at Port of Sudan as also lawyer's fees totalling us$ 9,682. 7. As these amounts were not paid by the. Respondent, the Petitioner took steps for recovery of the sum. According to the Petitioner, the Respondent as shippers of the cargo under the Bill of Lading was bound by the terms of the Bill of Lading which provided for incorporation of all charterparty terms including the law and arbitration clause. According to the Petitioner, therefore, a notice for commencement of the arbitration proceeding was given. The petitioner informed the Respondent that they have appointed Mr. Bruce Harris as their arbitrator. The Respondents were called upon to appoint their nominee within 14 days. It was informed that failure of the Respondents of appointing their nominee within seven days will result in Mr. Bruce Harris acting as the sole arbitrator. There was no response from the Respondents. Therefore, another letter dated 28th March, 2002 was addressed to the Respondents. By communication dated 1st April, 2002 the Respondents informed that they never agreed to arbitration and that they will not participate in the arbitration april. 2002 making allegations against the Petitioner that the Petitioner had in collusion with Preetika Shipping Agency Pvt. Ltd. , who were the Charterers' agents at the Port of Loading, Mumbai presented a forged Charterparty and bill of Lading. The allegations were denied by the Petitioner. Arbitration proceedings, therefore, went ahead. The Plaintiffs filed their claims and submissions. Respondents did not appear before the Arbitrator. The Arbitrator found that there was an arbitration clause which was binding on the respondents and therefore he had the jurisdiction to make the award. The arbitrator ultimately made an award directing the Respondents to pay an amount of US$ 150,939. 92 with interest at the rate of 4% per annum compounded at three-monthly rests from 1st February 2002 until the date of realisation. The present petition has been filed for enforcement of this award made by the learned Arbitrator.

(3.) THE learned Counsel appearing for the Petitioner submits that this petition is filed under section 48 of the Act for enforcement of the Foreign award. In terms of the provisions of sub-section (1) of section 48, this Court can refuse to enforce the foreign award at the request of the Respondent, only if the Respondent furnishes to the Court proof on the points which are mentioned in Clauses (a) to (e) of sub-section (1) of Section 48 or subsection (2)of section 48. According to the learned Counsel, thus, in view of the provisions of Section 48 burden to prove that the award is not enforceable is on the Respondent. In the present case, the only ground on which the Respondent claims that the enforcement of the award should be refused is that the award is without jurisdiction, in as much as, there was no existing arbitration clause binding between the parties. Submissions of the learned Counsel is two fold. Firstly, he submits that in fact the arbitration clause in agreement between the Petitioner and the Respondent exists. The second submission of the learned Counsel is that enforcement of a foreign award cannot be refused under Section 48 on the ground that the award has been made by the arbitrator, who did not have the jurisdiction.