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M/S C & C Maritime Pte Ltd vs.advance Surfactants India Ltd - Court Judgment

LegalCrystal Citation
CourtDelhi High Court
Decided On
AppellantM/S C & C Maritime Pte Ltd
RespondentAdvance Surfactants India Ltd
Excerpt:
.....under:-"“17 the tribunal noted that monica yadav was not one of the five specified charterers' email addresses set out above. the tribunal is satisfied that the order of 18 september was received by the charterers, having not received any other bounce backs from the other four email addressees. 18 no defence submissions were received and by an email of 30 september 2013, holmans asked the tribunal to order that the charterers serve their defence submissions within 7 days failing which the tribunal should proceed to their award based on the claims submissions submitted on 16 august 2013. the tribunal noted that on that email holmans had added two more email addresses for the charterers, bringing the total number of email addresses for the charterers to seven (in addition to the.....
Judgment:

* + IN THE HIGH COURT OF DELHI AT NEW DELHI EX.P. 311/2014 Reserved on:

15. 10.2018 Date of decision :

24. 01 .2019 M/S C & C MARITIME PTE LTD Through: Mr.Arun ..... Decree Holder and Khosla Mr.K.Gangadharan, Advs. versus Through: Mr.Pankaj ADVANCE SURFACTANTS INDIA LTD.....Judgment Debtor and Mr.Shoumik Mazumdar, Advs. alongwith Mr.Vishal Sharma, AR. Seth CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA EX.APPL.(OS) 233/2015 & 607/2015 1. This petition has been filed under Section 49 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the „Act‟) seeking enforcement of the Arbitral Awards dated 19.11.2013 and 21.03.2014 passed by the Arbitral Tribunal adjudicating the disputes that have arisen between the parties in relation to the Charter Party Agreement dated 01.12.2011.

2. By the Award dated 19.11.2013, the Arbitral Tribunal has awarded an amount of USD19170.05 in favour of the petitioner against its claim for demurrage and a further sum of USD11483.50 towards shifting charges. The Arbitral Tribunal has further directed the EX.P. 311/2014 Page 1 respondent to pay compound interest at the rate of 5% per annum compounded at three monthly rests from 20.01.2012 till the date of payment of USD11483.50 and the same rate of interest on USD19170.05 with effect from 07.02.2012 uptil the date of payment. Cost of the Award amounting to £ 6,500 alongwith interest thereon has also been awarded in favour of the petitioner.

3. By the subsequent Award of Cost dated 21.03.2014, the Arbitral Tribunal has awarded an amount of £ 9679.31 alongwith the rate of interest as mentioned hereinabove with effect from 19.11.2013 till the date of payment as well as sum of £ 2500 alongwith the interest at the abovementioned rate towards cost of the said Award.

4. The respondent has challenged the above Award firstly contending that there was no Arbitration Agreement between the parties. It is submitted by the respondent that the broker, namely, Strait Shipbrokers had unilaterally and without the consent of the respondent settled the terms of the Charter Party Agreement. It is submitted by the respondent that the broker had not been granted any power or authority or authorisation to negotiate the terms of the Charter Party Agreement with the petitioner and therefore, the same are not binding on the respondent. It is further submitted that without prejudice to the above arguments, the e-mail dated 01.12.2011 which contains the terms of the Charter Party Agreement annexes therewith the Asbatankvoy Charter Party Agreement, which has not been signed by the parties and therefore, is not binding on the respondent and cannot constitute an Arbitration Agreement between the parties. EX.P. 311/2014 Page 2 5. I have considered the submissions made by the learned counsel for the respondent, however, find no merit in the same. Admittedly, the respondent has availed the services of the petitioner for the purpose of carriage of its cargo to Mumbai. The respondent has not placed on record any other terms of this Charter Party nor did it dispute the terms of the Charter Party at any point before the present proceedings. It has also not placed on record any communication that it had with the broker after coming to know of the Charter Party terms, raising any dispute to the same. Clearly, this plea is an afterthought and a mala fide attempt to somehow raise a frivolous and vexatious dispute once the Award has been passed against it.

6. I may also note that in the e-mail dated 27.09.2013 from the respondent to the broker and the petitioner, though the respondent denied its liability towards the demurrage claimed and the claim for shifting charges, it did not deny the Agreement. The e-mail is quoted hereinbelow:-

"“From:Prateek Bhatnagar [mail to: [email protected]]. Sent: Friday, 27 September, 2013 8:29 PM To: '[email protected]' Cc: '[email protected]'; Vijay Singh; Samya Khan Subject: MT GOLDEN EXPRESS- DEMURRAGE CLAIM Dear Karthik, EX.P. 311/2014 Page 3 7. We had hired this vessel MT GOLDEN EXPRESS through you for which the shipping company C&C MARITIME PTE LTD. has raised an invoice for demurrage of USD31687,55.15 ( USD2020355 demurrage +USD1148350 shifting charges). In this respect we have spoken to you many times and we strongly believe that this amount should be further reduced. We do not want to get into any kind of litigation and request you to settle this amicably with the shipping company so that we maintain good integrity and relationship in the market. We really do not appreciate shipping company's threat as we have always several times in the past wished to settle this amicably. Therefore we ask you to take initiative ones again. Under these circumstances we do not believe in litigation and trust that the differences in claim can be settled. In case the shipping company decides to go to the court again, then we shall not be responsible for any charges. We look forward to settle this matter at the earliest. Thanking you in anticipation. Regards, Prateek Bhatnagar Asst. Manager- Global Logistics Advance Surfactants India Ltd. +919650 777 926” The learned counsel for the respondent further submits that the Arbitral Tribunal was not properly constituted nor was any opportunity of defending the claim given by the Arbitral Tribunal to the respondent. He submits that the petitioner allegedly invoked the Arbitration Agreement vide its e-mail dated 12.06.2013, however, the said e-mail does not mention the e-mail address to which it was sent. EX.P. 311/2014 Page 4 By a subsequent e-mail dated 03.07.2013 the petitioner went ahead and nominated the Arbitrator for the respondent as well. This e-mail has been forwarded to five e-mail addresses of the respondent, however, the respondent had discontinued using the said e-mail accounts in the year 2011, that is, much before the said e-mail was sent. The learned counsel for the respondent further submits that by an e-mail dated 05.07.2013, the petitioner itself had taken a decision that to avoid any argument in the future, the earlier correspondence be sent to the respondent and delivered by hand. The petitioner thereafter, sent this correspondence to the respondent by way of speed post on 06.07.2013, that is, after the appointment of the Arbitrator on behalf of the petitioner and the respondent had already taken place. The nominated Arbitrators thereafter proceeded to appoint the third Arbitrator on 23.07.2013, and in spite of no proof of service of the e- mail sent by it to the respondent and, infact, taking on record that the e-mails had been returned undelivered at atleast two of the e-mail addresses of the respondent, the Arbitral Tribunal proceeded to pass ex parte Awards. The learned counsel for the respondent claims that not only is the Arbitral Tribunal invalidly constituted but it also failed to observe the Principles of Natural Justice as the Award has been passed without giving an opportunity to the respondent to defend.

8. I have considered the submissions made by the learned counsel for the respondent, however, find no merit in the same. The Arbitration Agreement between the parties is contained in Clause 20 EX.P. 311/2014 Page 5 of the Rider Terms and Conditions and Clause 24 of the Asbatankvoy Charter Party Agreement, which are reproduced hereinunder:-

"“RIDER TERMS & CONDITIONS Clause 20: Any dispute under this Contract shall be decided by Arbitration in London according to English Law. xxxxxx Asbatankvoy Charter Party Agreement 24. ARBITRATION. Any and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in the City of New York or in the City of London whichever place is specified in Part I of this charter pursuant to the laws relating to arbitration there in force, before aboard of three persons, consisting of one arbitrator to be appointed by the Owner, one by the Charterer, and one by the two so chosen. The decision of any two of the three on any point or points shall be final. Either party hereto may call for such arbitration by service upon any officer of the other, wherever he may be found, of a written notice specifying the name and address of the arbitrator chosen by the first moving party and a brief description of the disputes or differences which such party desires to put to arbitration. If the other party shall not, by notice served upon an officer of the first moving party within twenty days of the service of such first notice, appoint its arbitrator to arbitrate the dispute or differences specified, then the first moving party shall have the right without further notice to appoint a second arbitrator, who shall be a disinterested person with precisely the same force and effect as if said second arbitrator has been appointed by the other party. In the event that the two arbitrators fail to appoint a third arbitrator within twenty days of the appointment of the second arbitrator, either arbitrator may apply to a Judge of any court of maritime jurisdiction in the city above-mentioned for the appointment of a third arbitrator, and the appointment of such arbitrator by such EX.P. 311/2014 Page 6 9. Judge on such application shall have precisely the same force and effect as if such arbitrator had been appointed by the two arbitrators. Until such time as the arbitrators finally close the hearings either party shall have the right by written notice served on the arbitrators and on an officer of the other party to specify further disputes or differences under this Charter for hearing and determination. Awards made in pursuance to this clause may include costs, including a reasonable allowance for attorney's fees, and judgment may be entered upon any award made hereunder in any Court having jurisdiction in the premises.” Though it may be correct that the e-mail dated 12.06.2013 addressed by the petitioner‟s counsel to the respondent does not indicate the e-mail address to which it was sent, the petitioner had thereafter addressed another e-mail dated 03.07.2013 to five e-mail addresses of the respondent. Though the respondent is denying the receipt of the same by alleging that it had stopped using these e-mail addresses in the year 2011, nothing has been filed on record to substantiate this submission. This submission is clearly an afterthought.

10. In any case, the petitioner had sent a hard copy of all these documents and e-mail to the respondent by way of speed post on 06.07.2013. In the application raising objections against the Impugned Awards, the respondent did not deny the receipt of the said documents. The fact of appointment of the three Arbitrators was also communicated to the respondent at the five e-mail addresses on 23.07.2013. The Arbitral Tribunal thereafter advised the respondent to file its reply to the claim petition vide e-mails dated 19.08.2013, EX.P. 311/2014 Page 7 18.09.2013 and 30.09.2013. The Arbitral Tribunal in its Award dated 19.11.2013 further recorded as under:-

"“17 The Tribunal noted that Monica Yadav was not one of the five specified Charterers' email addresses set out above. The Tribunal is satisfied that the Order of 18 September was received by the Charterers, having not received any other bounce backs from the other four email addressees. 18 No defence submissions were received and by an email of 30 September 2013, Holmans asked the Tribunal to order that the Charterers serve their defence submissions within 7 days failing which the Tribunal should proceed to their Award based on the claims submissions submitted on 16 August 2013. The Tribunal noted that on that email Holmans had added two more email addresses for the Charterers, bringing the total number of email addresses for the Charterers to seven (in addition to the Brokers). The two new ones were: a. [email protected]; and b. [email protected] 19 On 30 September, the Tribunal sent the following email to a) Holmans, b) the seven email addresses for the Charterers and c) the Brokers:

"The Tribunal has considered the Claimants' request below. The Tribunal refers to its Order of 18 September 2013, granting the Defendants further time until (and including) 27 September 2013 by which to serve Defence Submissions failing which they could expect that the Tribunal would make a final and peremptory Order of short duration. We also indicated in our Order of 18 September, that if Defence Submissions had still not been served by that final deadline, we would then proceed to our Award on the basis of the documents then before us. EX.P. 311/2014 Page 8 Accordingly, and in the circumstances, we hereby make a final and peremptory Order as we indicated we would, granting the Defendants one further extension of time by which to serve Defence Submissions until (and including) Monday, 7 October 2013. If Defence Submissions have not been served by the expiry of that deadline, we shall then proceed to our Award on the basis of the documents now before us. Furthermore, we shall proceed to do so to the exclusion of anything served without our express consent after expiry of that deadline". 20 It appears that two email addressees may not have received that 30 September Order because Ms Kay received an email in these terms: Mail System Delivery "From: [email protected] Sent: Monday, September 2013 4:21:36 PM To: [email protected] Subject: Undeliverable.. Delivery has failed to these recipients or groups: Delivery [email protected] A problem occurred while delivering this message to this email address. Try sending this message again. If the problem continues, please contact your helpdesk. following The [103.13.98.25].. organization rejected your message: Diagnostic information for administrators: ……….. [email protected] ……. …..Unknown address error….. 21 Ms Kay received a message in similar terms on the same day of: [email protected] respect same time, in and at the EX.P. 311/2014 Page 9 The One notice failure failure and 22 Both of those email addresses related to two out of the seven email addresses used for the Charterers. The Tribunal is satisfied that the 30 September Order referred to above, was received by the five other Charterers' email addressees because no other bounce backs were received. 23 By an email of 3 October 2013, on behalf of the Tribunal, Ms Kay notified a) Holmans, b) the seven email addresses of the Charterers and c) the Brokers, about the bounced back emails, in these terms; "I have received bounced back emails from addressees of the... RESPONDENTS

as follows:

1. Our 18 September Order was returned undelivered to one addressee. named [email protected] with an explanation that this was because of a permission or security issue.

2) Our 30 September Order was returned undelivered to two addressees. named [email protected]: named [email protected] with an explanation that this was because of "unknown address error", in both instances. The Tribunal is satisfied that the emails that did not bounce back gave proper notice to the... RESPONDENTS

of our Orders. If, however, Claimants are concerned that there can be any doubt about that, then they should let us know and arrange further service of our Orders as they consider appropriate. But if you are content to proceed on the basis that our Orders have been properly notified to the... RESPONDENTS

, then as previously indicated we are satisfied that we could and should properly proceed on that basis."

24 By follow-up email of the same day (3 October), Ms Kay for the Tribunal notified the Parties as a “postscript”, that the email she had sent earlier that day, had been returned undelivered to the same two addressees as described under item

2) above, with the reason in the delivery failure notice as "couldn't be found" but stated that "this does not change matters as we have expressed in our email of this morning". notice the other EX.P. 311/2014 Page 10 25. By an email of 3 October 2013, Holmans confirmed to the Tribunal and the Charterers that: “…..we are also satisfied that proper notice of the Tribunal's Orders has been given to the... RESPONDENTS

and that we are content to proceed on the basis that the Orders have been properly notified to the... RESPONDENTS

". 26 Unfortunately, no defence submissions were ever received from or on behalf of the Charterers.” 11. A reading of the above would show that the Tribunal has also made repeated attempts to communicate with the respondent, advising the respondent to file its Statement of Defence, however, the respondent failed to take this opportunity. What is also important to note here is that some of these e-mails were also sent to two additional e-mail addresses of [email protected] and [email protected] These e-mail addresses were in addition to the five addresses where earlier correspondence was being sent and these e-mail addresses were taken from an e-mail dated 27.09.2013 addressed by the respondent to the petitioner as also to the broker. There is no submission made by the learned counsel for the respondent on the correctness of these two e-mail addresses nor any justification is being given for the respondent not responding to the e- mails sent by the Arbitral Tribunal at these e-mail addresses.

12. In view of the above, in my opinion, the Arbitral Tribunal has made more than sufficient efforts to serve the respondent and inform it of the pendency of the arbitration proceedings before it, as well as give an opportunity to the respondent to defend the same. The respondent EX.P. 311/2014 Page 11 in spite of such opportunity being given, decided to maintain silence and, therefore, cannot now be heard to complain about non grant of opportunity to file its defence or claim violation of the Principles of Natural Justice.

13. In Shri Lal Mahal Limited v. Progetto Grano Spa, (2014) 2 SCC433 the Supreme Court has held that the application of “public policy of India” doctrine for the purpose of Section 48(2)(b) is more limited than the application of the same expression in respect of the domestic Arbitral Award in Section 34(2)(b)(ii). I would quote paragraphs 27 to 29 of the judgment as under:-

"that “27. In our view, what has been stated by this Court in Renusagar with reference to Section 7(1)(b)(ii)of the Foreign Awards Act must equally apply to the ambit and scope of Section 48(2)(b) of the 1996 Act. In Renusagar it has been expressly exposited the expression “public policy” in Section 7(1)(b)(ii) of the Foreign Awards Act refers to the public policy of India. The expression “public policy” used in Section 7(1)(b)(ii) was held to mean “public policy of India”. A distinction in the rule of public policy between a matter governed by the domestic law and a matter involving conflict of laws has been noticed in Renusagar. For all this there is no reason why Renusagar should not apply as regards the scope of inquiry under Section 48(2)(b). Following Renusagar, we think that for the purposes of Section 48(2)(b), the expression “public policy of India” must be given narrow meaning and the enforcement of foreign award would be refused on the ground that it is contrary to public policy of India if it is covered by one of the three categories enumerated in Renusagar. Although the same expression “public policy of India” is used both in Section 34(2)(b)(ii) and Section 48(2)(b) and the concept of “public policy in India” is same in nature in both the Sections but, in our view, its application differs in degree insofar as these two EX.P. 311/2014 Page 12 Sections are concerned. The application of „public policy of India‟ doctrine for the purposes of Section 48(2)(b) is more limited than the application of the same expression in respect of the domestic arbitral award.

28. We are not persuaded to accept the submission of Mr. Rohinton F. Nariman that the expression “public policy of India” in Section 48(2)(b) is an expression of wider import than the “public policy” in Section 7(1)(b)(ii) of the Foreign Awards Act. We have no hesitation in holding that Renusagar must apply for the purposes of Section 48(2)(b) of the 1996 Act. Insofar as for setting aside an award under Section 34 is concerned, the principles laid down in Saw Pipes would govern the scope of such proceedings. the proceeding 29. We accordingly hold that enforcement of foreign award would be refused under Section 48(2)(b) only if such enforcement would be contrary to (i) fundamental policy of Indian law; or (2) the interests of India; or (3) justice or morality. The wider meaning given to the expression “public policy of India” occurring in Section 34(2)(b)(ii) in Saw Pipes is not applicable where objection is raised to the enforcement of the foreign award under Section 48(2)(b).” 14. In LDK Solar HI-Tech(Suzuhou) Co. Ltd. v. Hindustan Cleanenergy Limited, MANU/DE/2327/2018, this Court had held as under:-

"technical justice. “27. It has been repeatedly held that natural justice is no unruly horse. It cannot be put in a straightjacket formula. It cannot be put into rigid rules and there is no such thing as mere The requirement of natural justice must depend upon the facts and circumstances of the case and some real prejudice must be shown to have been suffered by the party complaining of the violation of Principles of Natural Justice……” infringement of natural EX.P. 311/2014 Page 13 15. In National Ability S.A. vs. Tinna Oil & Chemicals Ltd. & Ors., (2008) 105 DRJ446 this Court has also considered and rejected the plea of violation of Principles of Natural Justice in arbitration proceedings with the following observation:-

"“27(c)….One cannot be oblivious of the nature of such international arbitration proceedings. The schedule fixed by the arbitral tribunals is strictly adhered to and only in exceptional circumstances adjournments are given. There is a rational and justification for the same. In respect of disputes relating to international commercial dealings, such arbitral tribunals ensure they are decided with utmost alacrity and promptness. Such proceedings are not allowed to be dragged on unnecessarily causing delays. In fact, this is the culture which needs to be set-in in all kinds of arbitration proceedings, whether international or domestic. that It is stated by the petitioner that proceedings were conducted in accordance with the established practice in England and procedure followed there. This is an important fact which cannot be lost sight off. If such procedure is followed as prevalent in the country where the arbitration took place, it cannot be said that the same would be in violation of principles of natural justice when considered on the touchstone of law prevailing in India.” 16. Applying the above principles, it cannot be said that there was any violation of the Principles of Natural Justice in the present case.

17. In view of the above I find no merit in the objections raised by the respondent to the enforcement of the Awards. EA2332015 and EA6072015 are accordingly dismissed. EX.P. 311/2014 Page 14 EX.APPL.(OS) 832/2015 This application has been filed by the petitioner praying for condonation of delay in re-filing of the application under Order 6 Rule 17 of the Code of Civil Procedure, 1908 seeking amendment in the enforcement petition. The amendment application has already been allowed by this Court by its order dated 15.09.2015. In view thereof, the said application has become infructuous. EX.P. 311/2014 As the objections of the respondent against the enforcement of the Impugned Awards have been dismissed by this Court, the respondent shall pay the awarded amount to the petitioner within a period of six weeks from today, failing which its Managing Director shall remain personally present on the next date of hearing. List on 20th March, 2019 before the Roster Bench. NAVIN CHAWLA, J JANUARY24 2019/rv EX.P. 311/2014 Page 15


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