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Lakshmi NaraIn Ramnivas Vs. Mannesman Export G.M.B.H. and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberSuit No. 1811 of 1957
Judge
Reported inAIR1960Cal733
ActsArbitration Act, 1940 - Sections 2 and 34
AppellantLakshmi NaraIn Ramnivas
RespondentMannesman Export G.M.B.H. and ors.
Appellant AdvocateSubrata Roy Choudhury and ;Tapas Kumar Banerjee, Advs.
Respondent AdvocateR.C. Deb and ;N. Roy, Advs.
DispositionApplication allowed
Cases ReferredSanday v. Strath Steamship Co.
Excerpt:
- .....was filed on 18-11-1957. the suit arises in respect of a contract of carriage contained in the bill of lading no. 10 dated 8-4-1956 which was issued on behalf of the defendant no. 4. defendant no. 5 was the agent of defendant no. 4. the two petitioners are defendants nos. 4 and 5, namely, lloyd triestino and turner morrison and co. private limited.2. the bill of lading contains the following clause:'all requests for compensation in respect of damage, shortage, deterioration, loss of goods loaded shall be submitted for friendly settlement to the agencies of the shipping company at the place of discharge. failing a friendly agreement both the shipper and the receiver as well as any other party interested in the cargo, if intending to take legal steps against the company, for the above.....
Judgment:

A.N. Ray, J.

1. This is an application for stay of further proceedings in Suit No. 1811 of 1957. The suit was filed on 18-11-1957. The suit arises in respect of a contract of carriage contained in the Bill of Lading No. 10 dated 8-4-1956 which was issued on behalf of the defendant No. 4. Defendant No. 5 was the agent of defendant No. 4. The two petitioners are defendants Nos. 4 and 5, namely, Lloyd Triestino and Turner Morrison and Co. Private Limited.

2. The Bill of Lading contains the following clause:

'All requests for compensation in respect of damage, shortage, deterioration, loss of goods loaded shall be submitted for friendly settlement to the agencies of the Shipping Company at the place of discharge. Failing a friendly agreement both the shipper and the receiver as well as any other party interested in the cargo, if intending to take legal steps against the company, for the above mentioned causes and in general for whatsoever other causes, may summon them before the Judicial Authorities of Trieste or Genoa hereby expressly renouncing the competence of any other Judicial Authorities. No exception must be made to this exclusive competence even if the company is sued party (defendant) by reason or connection of contingency of the Law Suits'.

3. The petitioners in the written statement have taken the plea that by Italian law each of the Courts at Trieste and at Genoa or in the alternative, the Court at Trieste or the Court at Genoa has jurisdiction to entertain and try the issues in this suit beween these defendants. The plaintiff, it is alleged by the defendants in the written statement could according to Clause 31 of the Contract of Carriage have brought the suit in the Court at Trieste or in the Court at Genoa and not in this Court. In other words, the petitioners seek to enforce the covenant for adjudication of disputes by a foreign Court.

4. It is well settled that a covenant containing a Clause 9 this nature by which arbitration of a foreign Court is contemplated is as much enforceable as a covenant containing the clause for arbitration by a foreign Tribunal or a foreign body of arbitrators.

5. Counsel for the respondent relied oil the plaintiff's letter dated 20th November 1956 to Turner Morrison and Co., Ltd., which has the following printed words at the foot 'Subject to jurisdiction at Calcutta only'. It was stated that there were similar letters. An argument was extracted that the plaintiff made it known that Calcutta would be the situs for jurisdiction. I am unable to accept the contention. The plaintiff should have then instructed his shipper or agent not to have any Bill of Lading with any clause for trial of disputes in a foreign Court.

6. Counsel appearing on behalf of the 'respondent took the point that inasmuch as the petitioners Nos. 4 and 5 were riot both parties to the Bills of Lading they could not maintain this application. Ordinarily in an arbitration agreement unless a person is a party to the arbitration agreement he is not entitled to maintain an application under Section 34. I do not see any reason why that limitation should be put upon an application for enforcing a covenant relating to adjudication by a foreign Court. In my opinion, what is contemplated in a clause of this nature is that parties have selected a particular jurisdiction for adjudication of disputes and if the Court comes to the conclusion that the disputes touch the agreement the parties should be asked to adhere to their covenant.

7. The plaintiffs case is that the defendant No. 4 which, was the owner or charterer of the Steamship 'Spuma' was a carrier for reward. The defendant No. 4 issued at Venezia in Italy a freight prepaid Bill of Lading No. 10 dated 9-4-1956 whereby the said defendant acknowledged to have received on Board the steamship 'Spuma' 187 bundles weighing 300,000 kilos of the said goods and agreed to carry and deliver the said goods in full at the port of Calcutta to the Shipper's order or assigns.

8. On or about 20-6-1956 the vessel arrived at the Port if Calcutta. Thereafter it discharged the goods and the same were taken custody by the defendant No. 6 the Commissioners for the Port of Calcutta. The plaintiff's case is that the ship discharged only 164 bundles instead of 187 bundles and that the weight of 164 bundles was 242 tons 17 cwt. 3qr. 0 lb whereas the weight of 187 bundles was 295 tons; 5 cwt. 1 Qr. 0 lb. as mentioned in the Bill of Lading. Between 1-7-1956 and 31-7-1956 the defendant the Commissioners for the Port of Calcutta delivered to the plaintiff 164 bundles and in respect of the balance 23 bundles they issued a short landing certificate No. 14/4 K. G. D. dated 13-8-1956 for 23 bundles as being goods not landed from the steamer.

8A. On or about 4-10-1958 the defendant No. 5Turner Morrison and Co., on behalf of defendantNo. 4 advised the plaintiff that some rods were lyingwith the Port Commissioners landed as unmanifestedcargo and offered the said rods to the plaintiff. Oninspection the said rods were found to be differentto the plaintiff's goods but the plaintiff ultimatelyaccepted the said unmanifested cargo which werefound to be the contents of 7 bundles which weregiven delivery of by the defendants to the plaintiff on or about 10-10-1957.

9. In the premises the plaintiff's suit is for value of 16 bundles and for profits which the plaintiff would have made thereof and for other reliefs.

10. Defendants Nos. 4 and 5 in their written statement do not make any admission as to weight or quantity or volume or contents or value of the goods covered by the Bill of Lading and further do not admit that the Reinforcing Round Bars comprised in the consignment were bundled in 187 bundles either on shipment or on discharge or on delivery. That is paragraph 6 of the written statement. In paragraph 8 of the written statement the defendants deny that the ship discharged only 164 bundles weighing 242 tons 17 cwt. 3 Qr. 0 lb. instead of 187 bundles weighing 295 tons 5 cwt. 1 Qr. 0 lb. The defendants do not further admit the correctness of the number of bundles or of the weight of the bundles and state that the entire cargo received on board the vessel at the time of shipment was duly landed and discharged by the vessel.

11. On these pleadings counsel for the respondent contended that the only material, question in the suit was the landing of goods, namely, as to what was the quantity landed and offered to the plaintiff for delivery. It was also argued that the defendant had admitted that more than 164 bundles were loaded. I am unable to accept the contention of the respondent on the pleadings that there is any admission that more than 164 bundles were loaded. Counsel for the respondent further argued that it was immaterial as to what goods were loaded since it was the defendant's case that unmanifested cargo contained the balance of 23 bundles as would appear from paragraphs 8(c) and 10 of the plaint. The defendant in paragraph 12 of the written statement states that a quantity of round bars carried by the ship was shown by defendant No. 6 as unmanifested excess cargo and the same was offered to the plaintiff but the plaintiff declined to accept the same. The defendants do not admit that the quantity shown as unmanifested excess was different from the goods in which the plaintiff was interested. In short Counsel for the respondent contended that the only important issue in the suit would be as to what were the goods actually discharged and delivered to the plaintiff and evidence thereof would be found in India and therefore, the balance of convenience would be in favour of the suit being tried here.

12. A similar case came up before the Appeal Court in an appeal from an Original Order No. 59 of 1959: : AIR1960Cal155 Lakshinarayan Ramnwas v. Lloyd Triestino Societa. In that case their Lordships of the Appeal Court came to the conclusion that on the materials it was impossible to hold that the balance of convenience was overwhelmingly; in favour of the trial of the suit in Calcutta as against the trial of the suit before the relevant Judicial authority in Italy. The Appeal Court considered that there were four important issues of fact and law in that case. In my opinion all those four issues arise in the present case. The first question is as to what quantity of goods were shipped. For that there will be Bill of Lading but the Bill of Lading is not enough. The evidence as to loading is mostly available in Italy. The next question is as to the quantity of goods landed. As to landing the plaintiff will rely on the short landing certificate and the records of the Commissioners for the Port of Calcutta. There will also be the oral evidence of the plaintiff. On the other hand there will be the papers or documents usually kept on board the vessel and they may also throw light on the question as to what quantity of goods were discharged. That part of the evidence will be available in Italy. The third question which will arise is that on discharge of the goods they were handed over to the Commissioners for the Port of Calcutta and that delivery of the goods to the consignees is the responsibility of the Commissioners for the Port of Calcutta. The shipping company may contend that on delivery to the Commissioners for the Port of Calcutta the company is not thereafter responsible for subsequent shortage. This aspect of the evidence will be in India. The fourth question will be as to the value of the goods According to Clause 28 of the Bill of lading ;

'In the event of damage or loss for which the company is answerable they shall only be liable to the payment of the real and intrinsic value of the goods loaded as proved by proper invoices of origin or as ascertained by a statement of a judicial expert with a maximum, in cases of undeclared value of it. Lira 5000 -- per package, excluding any compensation in respect of damages for lost profits or for increase of value or expenses''.

13. Prima facie it would seem that the value would be determined with reference to proper invoices of origin and the evidence of the value will be available in Italy.

14. The only way in which Counsel for the respondent sought to distinguish the present case from the decision of the Appeal Court was that the present dispute was one relating only to landing of goods/ I have already stated that it appears from the Written statement that the defendants do not admit that 187 bundles were loaded or that more than 164, bundles were loaded. Furthermore, as to unmanifested cargo the shipping company relies on a protection clause that every package must at the time of shipment be in good condition, must be strengthened with iron bands or safety netting properly fixed and they must be indelibly marked. Counsel for the respondent contended that under Section 64(d) of the Sea Customs Act the ship's agent gave a declaration and it would show liability of the ship's agent with regard to short delivery. But that liability of the agent is limited by the liability of the ship as the principal and the principal's liability is to be proved. See Shakoor Gany v. H.E. Hinde and Co. AIR 1932 Bom 330. Counsel for the applicant contended that the bulk of evidence would be available in Italy as to what unmanifested goods were there. In any event, the plaintiff has to establish the number of bundles, the weight of bundles, proper marks, quality of goods and that the plaintiff complied with Clause 7 which affords protection to the shipping companies. There will clearly be an issue as to whether the goods particularly mentioned in the Bill of Lading were actually shipped or not. There will also be the issue whether the shipping company from the time the goods were received till they were discharged were safely and securely carried. In the case reported in Lloyds Triestino Societa Per Azinnidi Navigazione Sede in Triesta v. Messrs. Lakshmi Narayan Ramniwas, : AIR1959Cal669 G. K. Mitter J., said at p. 672.

'If, therefore, the shipping company or the steamer company denies that goods of the weight or the number of packages mentioned in the Bills of Lading were actually shipped, an issue would arise on these questions of fact. As I have already said, the only evidence available at Calcutta would relate to the number of packages and the weight of the goods landed. How many witnesses the steamship company will examine I do not know but it is apparent that quite a few witnesses who are not at Calcutta but probably available either at Genoa or Trieste will have to be called. I cannot take the view that Calcutta would be the more convenient situs for the decision of the suit'.

15. In my view similar considerations apply to the present case.

16. Counsel for the applicant relied on Carver's Carriage of Goods by Sea, 10th edition at pages 58 and 59 in support of the proposition that the bill of lading is not even prima facie evidence of the weight etcetera shipped. Counsel for the respondent relied on the statement of Law of Carver's book at page 62 for the proposition that the person signing the bill is prevented from disputing the accuracy of statement of the kind and quantity of goods shipped. A shipowner can prove that the whole or some part of it was not shipped. In the case of Sanday v. Strath Steamship Co. 1920-26 Com Cas 163 Greer J., said that the shipowner might offer direct evidence that a mistake was made by tallymen from whose tallies the bill of lading was made out.

17. Paragraphs 3 and 15 of the plaint raise, in my opinion, an issue as to non-shipment by the shipper. The shipper, it is alleged, failed to deliver balance quantity of bars which the plaintiff alleges not to have received. That evidence will be available in Italy.

18. As to what law will apply counsel for the applicant contended that the proper law was Italian. It has not been argued to the contrary by counsel for the respondent.

19. On a consideration of the pleadings the issues which arise thereon I am unable to accept the respondent's contention that there is in favour of the respondent plaintiff an overwhelming balance of convenience in favour of the trial of the suit at Calcutta. On the contrary it appears that balance of convenience is in favour of the trial of the suit in Italy for various reasons, first, the question of loading, secondly, the question of damage thirdly, the actual loading by stevedores in accordance with Clauses 6, 9 and 21 of the bill of lading, fourthly, the ascertainment of number, weight marks, quality and packing of the goods, and finally the question of discharge ofcargo.

20. Counsel on behalf of the respondent contended that it would be difficult for the respondent to have foreign exchange facilities. It was argued that the defendant had establishment in Calcutta and therefore, it would be not at all onerous for the defendant to have the trial of the suit at Calcutta. The defendants deny facilities at Calcutta and further contend that freight was charged inter aha on the basis that litigation would be at Trieste or Genoa. On these contentions I am of opinion that it cannot be predicated that the respondents will have no foreign exchange facilities and that the balance of convenience is in favour of the trial in Italy. The verification of the written statement by Leonard Wilfred Balcombe is that the statements contained in paragraphs 1 to 22 are true to knowledge based on information gathered from correspondence, bill of lading and other documents. It was, therefore, contended that there was practically very little oral evidence. I am unable to accept that contention. The written statement has to be proved by documentary as well as by oral evidence. I have already stated that there is good deal of oral evidence to be adduced on behalf of the shipping company.

21. Counsel contended that the application should not be allowed inasmuch as the applicant was guilty of inordinate delay. The suit was filed in the month of November 1957. The written statement was filed on 26th February 1958. The present application was made on 8-6-1959. It is true that there has been some delay but it has not been shown that the respondent has suffered any prejudice thereby.

22. For all these reasons, I am of opinion, that the application should succeed. I therefore make an order in terms of Clause (a) of the Notice of Motion. The applicant is entitled to costs.


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