M.V. AGHIA THALASSINI Vs. ABU BAKR SIDDIQUE

JUDGEMENT

(1.) This appeal by special leave arises out of an order passed by the High Court Division in Admiralty Suit No. 2 of 1977 dismissing the application under section 34 of the Arbitration Act filed by the appellants for stay of the proceedings in the suit. Respondent No. 1 filed the Admiralty Suit for a decree for Tk. 54,43,567/00 as damages for delaying the carriage of goods and other causes.

(2.) Facts in short are Respondent No. 1 is the Proprietor of A.M. Traders to carry business of import and export. Appellant No. 1 is the Panamian Vessel and Appellant No. 2 and 3 are the owners and the Master of the Vessel. Respondent No. 1 obtained necessary permission, for importation of edible salt from India for the Government of Bangladesh and accordingly entered into a negotiation for importing salt from India. Respondent No. 2 had completed the necessary formalities for obtaining the allotment from the State Trading Corporation of India and since he had an allotment he contracted with respondent No. 7 for the supply of salt and accordingly respondent No. 2 furnished L/C. in favour of State Trading Corporation for the price of the salt against allotment of respondent No. 7. Respondent No. 7 chartered the appellant-vessel and the charter-party dated 14-7-77 was signed by respondent No. 7 and Respondent No. 6 as agent of appellant No. 2. Thereafter the vessel was loaded with salt and two Bills of Lading dated 3-8-77 were issued and these Bills of Lading which incorporated the charter-party by general words were ultimately endorsed in favour of A. M. Traders, the Respondent No. 1. The Vessel ultimately reached Chittagong Port on 17-10-77 and this delay has caused substantial loss to the respondent No. 1 as the price of salt went down. Hence the Admiralty Suit was filed. Appellants filed an application under section 34 of the Arbitration Act for stay of the proceedings pending arbitration contending that the charter party was bound by the arbitration clause and that the claims lodged by the Respondent No. 1 are related to and covered by the provisions of Arbitration Act. This petition was resisted by the Respondent No. 1. The High Court Division in passing the judgment had considered the point as to whether the arbitration clause in the charter party could be read as incorporated into the Bill of Lading, whether it is applicable to the contract. After reviewing number of decisions from the English jurisdiction it came to the conclusion that the arbitration clause in the charter party was not incorporated in the Bill of Lading and consequently the arbitration clause was not applicable to the contract evidenced by the Bill of Lading. The High Court Division also noticed that fraud, collusion and conspiracy were alleged by the Respondent No. 1. In this view of the matter the petition under section 34 of the Arbitration Act was rejected.

(3.) In the Bill of Lading the code name of which is 'Cogenbill' is approved by the Documentary Council of the Baltic and International Maritime Conference. It contains a clause 'all terms, conditions liberties' and exceptions of the charter party are herewith incorporated. The incorporation of charter party into the Bill of Lading was lying in general words. The charter party contains clause No. 31 which is as follows: "Should there be any dispute between owners and Charterer, the matter shall be referred to three persons in London, one to be appointed by each of the parties hereto and the third by the two of them. Their decision or that of any two of them shall be final and for the purpose of enforcing any award this agreement may be made a rule of the court. The arbitrators shall be commercial men."