BHARAT PETROLEUM CORPORATION LTD. versus THE GREAT EASTERN SHIPPING CO. LTD.

Citation: [2007] 11 S.C.R. 117 · Decided: 12-10-2007 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Dismissed

Judgment (excerpt)

J.. 
BHARAT PETROLEUM CORPORATION LTD. 
A 
v. 
THE GREAT EASTERN SHIPPING CO. LTD. 
OCTOBER 12, 2007 
B 
[TARUN CHATTERJEE AND D.K. JAIN, JJ.] 
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" 
Arbitration-Arbitration agreement-Applicability-Time 
Charter Party agreement-For letting on hire vessels-To Oil 
Corporation-Disputes arose between parties-After expiry of the c 
agreement-Reference of dispute to Arbitral Tribunal-Tribunal 
refused to adjudicate on the ground that the arbitration clause could 
not be invoked after expity of the agreement-:-High Court set aside 
the award of the Tribunal-On appeal, held: Arbitration clause 
contained in the agreement could be invoked even after expiry of the p 
agreement-Notwithstanding the expiry of the time fixed for the 
; 
agreement, the same did not get extinguished for the purpose of 
determination of the disputes arising thereunder. 
,. 
Contract-Acceptance of offer-Manner of-Held: General rule E 
that offer is not accepted by mere silence does not mean that it has to 
be given in so many words-In certain circumstances, offeree's silence 
coupled with his conduct taking form of positive act, may constitute 
an acceptance sub silentio. 
Doctrines/Principles-Principle of Sub Silentio-Applicability of F 
--< 
An agreement called 'Time Charter Party' was entered into 
'f 
between the appellant and the respondent on May 6, 1997 for letting 
on hire, vessels by the respondent to the appellant. The agreement 
was mutually extended till August 31, 1998. Thereafter tender was 
G 
floated inviting fresh bids. Some bidders filed Writ Petition against 
decision oflndian Oil Corporation (IOC) to invite revised price bids 
after opening of the sealed tenders. During pend ency of finalization 
of new Charter Party, respondent informed the appellant that they 
117 
H 
i. 
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118 
SUPREME COURT REPORTS 
[2007] 11 S.C.R. 
A were agreeable to apply new rates, for use ofthe vessel from July 
Al 
) 
1, 1998, provided all its nine vessels were used. By their letter dated 
November 5, 1998, they also protested against revision of the rates 
by the appellant downward for the vessel not being considered under 
the new bid. There was no response by the appellant to the protest. 
B The respondent by their letter dated January 4, 1999, expressed their 
willingness to sign the new Charter Party based on the existing terms 
and conditions indicating that usual practice is that pending 
>-
finalization of the new Charter Party, the existing terms and 
conditions of Charter Party continued to apply. It was also suggested 
---, 
c that agreement could be signed for the period from September 1, 
1998 until the matter was finally decided on the existing terms and 
conditions. There was no response by the appellant, to this letter 
also. There was no further exchange of correspondence between the 
parties,-during the year. The Writ Petition was disposed of on August 
D 20, 1999. Appellant continued to use the vessel under the Charter 
Party May 6, 1997 till August 31, 1999. IOC informed the 
respondentabout the evaluation of the tenders as per the High Court 
--\ 
order. Respondent accepted the proposed rates except for two 
vessels. They requested for revision of rates in respect of these two 
). 
E vessels, but the same was turned down. Pursuant to some notices 
and some subsequent correspondence, an Arbitral Tribunal was 
constituted. 
Arbitral Tribunal came to the conclusion that the Tribunal had 
no jurisdiction to decide the reference because the Charter Party 
F dated May 6, 1997, arbitration clause whereof was invoked, was 
valid only tipfo August 31, 1998 and the dispute related to the period 
subsequent to August 31, 1998; and that Charter Party dated May 
';-
6, 1998 was superseded by fresh agreement according to which the 
y 
Charter hire rates were to be determined by the Oil Co-ordination 
G Committee. Single Jµdge of High Court set aside the Award holding 
that the Tribunal had the jurisdiction to adjudicate the dispute; and 
that Tribunal failed to consider clauses 4.1and23 of Charter Party 
I 
dated May 6, 1997, according to which Charter party was to come 
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to an end only on re-delivery of vessel and admittedly re-delivery 
H did not take place after August 31, 1998 and thus it continued to be 
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1 I 
BHARATPETROLEUMCORPORATIONLTD. v. GREAT 
119 
EASTERN SHIPPING CO.LTD. 
hired in terms of Charter Party dated May 6, 1997. Hence the A -
present appeal. 
The question for determination was whether on expiry

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