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Far East Steamship Line, Vs. the Union of India - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 2044 of 1969
Judge
Reported inAIR1973Mad169
ActsCode of Civil Procedure (CPC), 1908 - Sections 19 and 20; Supreme Court of Judicature (Consolidation) Act, 1925 - Sections 41
AppellantFar East Steamship Line, ;vladivostok and ;u.S.S.R. and ors.
RespondentThe Union of India
Cases ReferredMessrs. Black Sea State Steamship Line v. The Minerals and Metals Trading Corporation of India Limited
Excerpt:
contract-contract containing foreign jurisdiction clause-when and under what circumstances court can give effect to such clause-duty of indian courts indicated; on the question raised as to whether the union of indian should be compelled to have recourse to the russian courts in view of the foreign jurisdiction clause in the contract entered into between the union and the petitioners,; held, clause 27 of the bill of lading provides that all questions and disputes not mentioned in this bill of lading shall be determined according to the merchant shipping code of the u.s.s.r. as to this clause, the parties having deliberately chosen that their mutual rights under the contract shall be determined according to the merchant shipping code of the u.s.s.r., there are no sufficient reasons to..........the union of india should be compelled to have recourse to the russian courts in view of the foreign jurisdiction clause in the contract entered into between the union and the petitioners, far east steamship line, vladivastrk, black sea steamship line, odessa, for 1,60,000 bags of urea from japan. the contract was with the first of them, represented by the second, for the carriage of goods along with 1,600 spare bags. it was a russian ship which when called at the nsgapattinam port, made a short delivery, the value of which is said to be in the region of rs. 4,270-55, excluding the proportionate freight of rs. 332-05. including the freight, insurance charges, survey charges, etc., the total claim for short delivery was r". 4,792-62. the union brought the suit in the court of the.....
Judgment:
1. The question in this Civil Revision Petition is whether the Union of India should be compelled to have recourse to the Russian Courts in view of the foreign jurisdiction clause in the contract entered into between the Union and the petitioners, Far East Steamship Line, Vladivastrk, Black Sea Steamship Line, Odessa, for 1,60,000 bags of urea from Japan. The contract was with the first of them, represented by the second, for the carriage of goods along with 1,600 spare bags. It was a Russian ship which when called at the Nsgapattinam port, made a short delivery, the value of which is said to be in the region of Rs. 4,270-55, excluding the proportionate freight of Rs. 332-05. Including the freight, insurance charges, survey charges, etc., the total claim for short delivery was R". 4,792-62. The Union brought the suit in the Court of the District Munsif of Nagapattinam. The suit was resisted by the Russian Shipping Company on ground, inter alia, that the foreign jurisdiction clause in the contract excluded the jurisdiction of that Court to try the suit. The Munsif did not accept this view, and went upon considerations of Sections 19 and 20 of the Civil Procedure Code. Doubting that the cause of action arose at Nagapattinam, he directed that the claim should be returned for presentation to the City Civil Court, Madras, within whose jurisdiction the defendants reside, including the clearing agent. The civil revision petition against that petition was, in the first instance, before Kailasam, J., who, while referring to Black Sea Statemznship Line v. The Minerals and Metals, Trading Corporation of India Limited (1970) 1 M.L.J. 548, which was decided by one of us, felt that in view of The Eleftheria (P.D.A.) (1969) 2 W.L.R. 1073, and Untertueser Reederei G.m.b.H. v. zapatta Off-Shore Company (The Chaparral) (1968) 2 Lloyd's Rep-158, the matter may be given a fresh look, and as the question was of importance, it might be placid before a Division Bench for disposal. In doing so, the learned Judge observed that while balance of convenience was a matter to be taken into consideration, the effect on international trade was also very important, and that some of the leading shipping and air companies, if the cause in the bill of lading was not given effect to, might not choose to have business at any of the Indian ports. Causes 26 and 27 of the bill of lading provided:

26. All claims and disputes arising under and in connection with this bill of lading shall be judged in the USSR.

27. All questions and disputes not mentioned in this bill of lading shall be determined according to the Merchant Shipping Code of the USSR.

3. As to Clause 27, we shotzld think that the parties having deliberately chosen that their mutual rights under the contract shall be determined according to the Merchant Shipping Code of the U.S.S.R., we do not see sufficient reason to bail the Union of India out of it. That clause is binding on the parties and should be given effect to, irrespective of the forum. But as regards the other clause, we certainly accept that in principle the parties who deliberately chose their forum, should be bound by the contract. This one of us has said in Messrs. Black Sea State Steamship Line v. The Minerals and Metals Trading Corporation of India Limited (1970) 1 M.L.J. 548, which gives full consideration to the question, and we find ourselves in entire agreement with what has been said there as to the law on the subject. As was however observed in that case, we are of the view that while normally parties should be bound by the contract, the rule has exceptions founded not merely on balance of convenience, but On considerations to meet the ends of justice in particular circumstances. In our opinion, the Court has the discretion which will, of course, be exercised after weighing the pros and cons of all the circumstances taken together.

4. In the, English Courts, the question has more often arisen in connection with an application for stay under Section 41 of the Supreme Court of Judicature (Consolidation) Act, 1925, and has been approached as a matter of discretion exercised in granting a stay unless strong cause for not doing so is shown. In The Eleftheria (P.D.A.) (1969) 2 W.L.R. 1073 the Probate Court pointed out that while exercising the discretion, the Court should take into consideration all the circumstances of the particular case, and then proceeded to say:

In particular, but without prejudice to taking into account all the circumstances of the particular case, the following matters, where they arise, may properly be regarded':

(i) in what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial as between the English and foreign Courts;

(ii) Whether the law of the foreign Court applies and, if so, whether it differs from English law in any material respects;

(iii) with what country either party is connected and how closely;

(iv) whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages;

(v) Whether the plaintiffs would be prejudiced by having to sue in the foreign Court because they would, (a) be deprived of security for that claim, (b) be unable to enforce any judgment obtained, (c) be faced with a time-bar not applicable in England, or (d) for political, racial, religious or other reasons be unlikely to get a fair trial.

5. In the view of that Court, therefore, the situation in the conflict of laws and jurisdictions does not demand that a foreign jurisdiction clause should invariably be enforced as always binding on the parties thereto. We do not think that such a view may necessarily hamper or obstruct or impede international trade. The claim in this case is under Rs. 5,000 and the expense involved in driving the Union of India to Russian Courts will far exceed the amount of the claim. That, in our opinion, is one of the circumstances which can legitimately be taken into account in enforcing a foreign jurisdiction clause. Also, we think, that by allowing the Union to sue in this country, no prejudice will be caused to the defendants. It is not suggested before us that the evidence on the issues of fact to be decided will not be available for trial at Madras, and on that account, there will be any relative inconvenience. We dismiss the petition with costs.


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