LexM/S. SHAKTI BHOG FOODS LIMITED versus KOLA SHIPPING LIMITED
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
•-t . . . ,,
[2008] 13 S. C.R. 925
M/S. SHAKTI BHOG FOODS LIMITED-,
A
v.
KOLA SHIPPING LIMITED
(Civil Appeal No. 5796 of 2008)
SEPTEMBER 23, 2008
B
-
[TARUN CHATTERJEE AND DALVEER BHANDARI,
JJ.]
Arbitration and Conciliation Act, 1996 - ss. 45 and 7 -
Export of sorghum to State of Niger by appellant - Negotia- c
tions for export order-Appellant agreeing to load and respon-
dent agreeing to carry 13, 500 tons cargo from Kakinada to
port of Cotonou - However, only 1100 MT cargo loaded as
appellant could not get export order from Niger - Offer of de-
murrage by appellant - Dispute between parties over quan-
D
tum of demurrage - Several litigations before Indian Courts -
Application uls. 45 by respondent to refer the dispute between
parties to arbitration in London under provisions of English
Arbitration Act, 1996 and stay all further proceedings in suit
pending arbitration - Allowed by courts below - Justification
E
of- Held: Justified - Correspondence between the parties as
also fixture note and bill of lading signed by parties lead to a
conclusion that Charter Party Agre{!ment existed between
parties~ Agreement provided that disputes arising out of char-
,
;,
ter party to be referre(j to arbitration in London under the En-
glish Act - Said agreement was not null and void or inopera-
·F
five or incapable of being performed - More so, appellant
admitted that he had signed on the front page of Charter Party
Agreement.
Appellant-manufacturer and exporter of food prod-
G
ucts was to export sorghum-cargo to the State of Niger. It
I
negotiated with the head of the State for the export order.
--.
Appellant and the respondent entered into an agreement
..
'
through Brisk Marine Services. Appellant promised to load
925
H
926
SUPREME COURT REPORTS
[2008] 13 S.C.R.
A 13,500 MT of the cargo at Kakinada Port for transporta-
tion to Cotonou within the stated period. The respondent
issued bill of lading. As per the terms and conditions of
the Charter Party Agreement, the appellant had to load
the said cargo within nine days on or before 6.08.2005
s and in case it failed to get the export order , it had to load
maize to Colombo from Kakinada Port. The vessel arrived
at the Port. However, the appellant could not get the ex-
port order from the State. It loaded 1100 MT of cargo as
against 13,500 MT of the agreed cargo and agreed to pay
C compensation of US $ 90,000 to the respondent for the
loss suffered by it. Respondent was not satisfied with the
quantum of demurrage offered by the appellant and dis-
pute arose between the parties. Thereafter, the appellant
requested the respondent to unload the cargo from the
0 vessel but the same was not done. Respondent filed ap-
plication for discharge of 1, 100 MT of cargo before the
High Court of Delhi. The application was allowed. Appel-
lant then filed appeal and subsequently withdrew the
matter. Meanwhile, the appellant filed suit claiming dam-
ages as by that time the cargo unloaded from the ship
E had become unworthy of consumption. It also filed appli-
cation for interim injunction directing the Port Officer,
Kakinada Port, to detain the vessel at Kakinada harbour
till the disposal of the suit. The application was dismissed.
Appellant filed an appeal before High Court of Andhra
F Pradesh which was also dismissed. The respondents
then filed application u/s. 45 of the Arbitration and Con-
ciliation Act, 1996 to refer the dispute between the parties
to arbitration in London under the provisions of the En-
glish Arbitration Act, 1996 and stay all further proceed-
G ings in the suit pending arbitration. Trial court allowed the
application. High Court also upheld the order holding that
the Gharter Party Agreement was in existence and the
appellant could not deny the same. Hence the present
appeal.
H
J
MIS. SHAKTI BHOG FOODS LIMITED v. KOLA
927
SHIPPING LIMITED
Dismissing the appeal, the Court
A
HELD: 1.1 In the instant case, there existed a charter
party agreement between the parties to the suitwhich can
be identified from the correspondence between the par-
ties to that effect as also from the fixture note and the bill
of lading signed by the parties. As-per the provisions <?f s.
B
45 of the Act, the High Court as well as the trial court were
fully justified in allowing the application preferred by the
respondent. [Paras 23 and 25] [943, H; 944,A; 944,F]
1.2 All the facts regarding the existence of the Char- c
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