LexFOOD CORPORATION OF INDIA versus M/S. THAKUR SHIPPING CO. LTD. & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
FOOD CORPORATION OF INDIA v. M/s. THAKUR SHIPPING CO. LTD. & ORS. December 19, l 974 IV. R. KRISHNA !YER, P. K. GoswAMt AND A. C. GurB, JJ.] Arbitration Act (10 of 1940), s. 34--'Ready and willing JI tile time when the proceedin:;s were commenced to do all things 11ocesi:~ry Id the proper con· duct of arbilration'.-.\'cope of. 'The appellant chart::rcd two ships bclongi,1g to the 2 respondents for cmying ric fr Gm Thailund to India. The Charter-party providrd imer alia that any Jispu'.r: s!1odd be referred to 2 arbicrntors one to be nomirw.terl by th~ owne·s and the 0thc:· by the Chnrtcrers. The appellam made claims :!~:.:inst one :respond1:nt fOi' dan1agcs for short Gelivcry, and against the other for damages far short dcli1ery and da10<1ge in respect of the consignrmmt of ;·ice. Th" oppr:i!ai:t, thereafter. suggested to one of the respondents to agn;e ~o arb;crJtio.a by a !;ingle arbitrator, but there was no respcnse from 'that i ~spor:d~ot. Th appellant also "··rote to the ugents of the other respondent mgin.i:: them tc ta!;c step' for referring the dispute, but the <ippellant only got cvasi ve replies. The app;;Jli:nt, a few days before the claims would be barred by time. iiled suits ag~i!'st each of' the respondents for recov~ry of the amounti; claimcu by it. The respo:iJents ~pplieJ for stay of trial of the suits under s. :4 of the Arbitration Act, 1940. The trial court rejected the applications, but the High Court allowed ihe prayer for stay on the ground that the decision of the trial court was 11-~n erse. Allowing the appeals to this Court, HELD': ( l) Under s. 34, one of the conditions that the applicant for >tay should sal isfy the court is that not only he is but also was, at the com- mencement of tbe proceedings, ready and willi.ng to do every thing nec«:ssary for the ·proper conduct of the arbitration. Where a party to an arbitration, agreement choc ses to maintain silence in the face of repeated requests by the other party to take steps for arbitration, the case is not onP, of mere im,ction. Failing to act \\'hen a party is rnlled upon to do so is a positive gesture signifying unwillingness or want of readiness to go to arbitration esoecially when fogal proceedings in Court were .about to be barred by time. [150F-G; 151E-F; 152Cj In the present case. one of the respondents sent evasive replies to the appel- lant in reply to the appellants Jetter urging them to take steps for referring the dispute to arbitration. As regards the other respondent. the appellant's suggestion of a :.ole arbi- trator was contrary to the arbitration clause of the charter-party., but the appellant's deviation was not a valid excuse for that respondent to remain silent and inactive. If the respon_dent was ready and willing t;i go to arbitra- tion. the respo!'.dent would have replied that it was not willing to any depar- ture from the arb'tration clause, but it did not send any replies to the appellant or do anything for reference of the dispute to arbitration according to the arbitration clause. [152A-Cl Th\: trial court found as a fact that the respondents were not readv and willing to go to arbitration at the t.ime when tho snit was instituted. Silence and inaction on the'r pait m_av in t.he circumstances, very.. well justify the inference that they were not ready and willing to go to arbitration. The con- clusion was not arbitrary. or perverse and the High Court wa.s wrong in so characterizing it [151G; 152C] Anderson Wriglrt Ltd. v. Moran and Co111pa11y [1955] 1 SCR 86:i followed. A B c 0 E F H F .C.I, v. THAKUR SHIPPING co. LTD. (Gupta; J.) 14 7 A Subal Chandra Bhur v. Md. Ibrahim & ;!Hr. AlR 194) Cal. 481. B c D E F G H referred to. · (2) It i; true that a court should not allow a party to an arbitration agree- ment to proceed with the suit in breach of the solen111 obligation to seek resort to the tribunal selected .by him; but this is subject to the terms of s. 34, one of which is that the other party to the agreemwt must remain 'ready and willing to do all things necessary for the proper conduct of the arbitration.' \I52E-F] Michael Colodetz & Ors. v. Serajuddin and Company [J 964] 1 SCH I 'J rcforred to. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1518 and 1519 of 1974. Appeal by special leave from the judgment & order dated the 8t:1 August 1973 of the Madras High Court in A.AD. Nos. 389 and 401 of 1971. M. Krishna R
Excerpt shown. Read the full judgment & AI analysis in Lexace.