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Mitsui Bussan Kaisha, Ltd. Vs. Hogarth Shipping Co. Ltd. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1926Cal722,94Ind.Cas.182
AppellantMitsui Bussan Kaisha, Ltd.
RespondentHogarth Shipping Co. Ltd.
Cases Referred and Ram Prasad Surajmull v. Mohan Lal Lochminarain
Excerpt:
arbitration act (ix of 1899), section 19 - stay of suit or proceeding--arbitration, taking place, of. - .....(at a date to be mentioned later that) this was a mistake and the owners of the vessel were the hogarth shipping company, ltd., a company having its registered office in glasgow.14. the learned judge stated in his judgment that he was informed that h. hogarth & sons were the agents. there is no evidence on the record as to the position of h. hogarth & sons or their connection with the limited company or the vessel, and i assume from what the learned judge said in his judgment that the information, to which he referred, was given to him in the course of the hearing of the application.15. the appellants, on the 26th march 1924, gave notice of an application for an order that the suit should be stayed under section 19 of the arbitration act, 1899 and that the matters in dispute should be.....
Judgment:

Lancelot Sanderson, C.J.

1. This is an appeal by Mitsui Bussan Kaisha, Ltd., against the judgment of my learned brother Mr. Justice C. C. Ghose delivered on the 18th May 1925.

2. The judgment was delivered in respect of an application by the appellants that an award dated 14th March 1925 should be declared null and void and that it be set aside, cancelled and taken off the file of this Court.

3. The learned Judge dismissed the application and having regard to the peculiar circumstances of the case, he made no order as to costs.

4. Against this order of dismissal the appellants have appealed.

5. The facts are as follows:

By a charter party dated the 26th November 1920 made between Messrs. Graham & Co. acting as agents for the owners of the good steamer called a first class steamer to carry 6,500 tons cargo 10 per cent. more or less and the appellants (charterers) it was agreed that the steamer should load at Calcutta a full and complete cargo of coal in bulk and being so loaded should proceed to Colombo and there deliver the cargo.

6. Clause II of the charter party provided for the time within which the cargo should be shipped at Calcutta and discharged at the port of destination and Clause 13 provided for the rate to be paid for demurrage, viz., Rs. 2,000 per running days.

7. Clause 19 provided as follows: 'Any dispute that may arise under this charter to be settled by arbitration at Calcutta or if mutually agreed at the place where the dispute occurs, each party appointing an arbitrator, and should the arbitrators be unable to agree the decision of an umpire selected by them to be final. Arbitrators and umpire are all to be commercial men and resident in Calcutta or the place where the arbitration is held. This submission may be made a rule of the High Court of Justice by either party.' Clause 21 provided as follows: 'For the non-performance of this agreement proved damages not exceeding the estimated amount of freight to be paid as liquidated damages.'

8. It is to be noted that the steamer was not specifically mentioned in the charter party nor were the owners of the vessel mentioned by name.

9. It appears that by a letter dated the 18th January 1921, Messrs. Graham & Co. acting as agents for the owners declared the steamship. 'Baron Jedburgh.'

10. This declaration was accepted by the appellants and the vessel having arrived at Calcutta notice was given that she was ready to load on 1st February 1921. It was alleged that the appellants were not ready with the cargo and that the vessel was detained in consequence thereof and that the loading and unloading occupied more than the lay days allowed by the charter party. The result was that a claim was made for damages for detention and demurrage amounting to Rs. 42,000.

11. A suit was instituted on the 1st February 1924 for the purpose of recovering this sum from the appellants. In that suit the plaintiffs were, S.C. Hogarth, H. Hogarth, B. Hogarth and J. B. Henderson carrying on business in Glasgow in co-partnership as shipowners under the style and Firm of H. Hogarth & Sons.

12. In the plaint the plaintiffs were alleged to be the owners of the vessel 'Baron Jed-burgh.'

13. It appeared subsequently (at a date to be mentioned later that) this was a mistake and the owners of the vessel were the Hogarth Shipping Company, Ltd., a Company having its registered office in Glasgow.

14. The learned Judge stated in his judgment that he was informed that H. Hogarth & Sons were the agents. There is no evidence on the record as to the position of H. Hogarth & Sons or their connection with the limited Company or the vessel, and I assume from what the learned Judge said in his judgment that the information, to which he referred, was given to him in the course of the hearing of the application.

15. The appellants, on the 26th March 1924, gave notice of an application for an order that the suit should be stayed under Section 19 of the Arbitration Act, 1899 and that the matters in dispute should be referred to arbitration in terms of the reference between the parties.

16. On the 8th April 1924, the Court made an order in the terms of the application viz., that the suit should be stayed until the further order of the Court and that the matters in dispute be referred to arbitration in terms of the reference between the parties.

17. It is to be noted that the latter part of the order is not in accordance with the provisions of Section 19 of the Arbitration Act; that section provides that if the Court is satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission and that the applicant was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary for the proper conduct of the arbitration, the Court may make an order staying the proceedings.

18. It is material to mention this because it appears that one of the parties subsequently dealt with the matter as if the Court had ordered a reference to arbitration.

19. The power of the Court under Section 19 is to stay the suit or proceedings, if the conditions referred to in the section are fulfilled. If a stay is granted the arbitration then takes place by reason of the submission contained in the contract and in accordance with the provisions of the Arbitration Act.

20. It appears that the plaintiffs in the suit appointed Mr. L. Edwards as arbitrator and the appellants appointed Mr. A.O. Brown. We have not the terms of the appointments before us, but it is clear from the materials, which are before us, that the dispute was regarded by both parties as a claim by the owners of the vessel against the appellants, the charterers of the vessel, for demurrage and damages for detention of the vessel.

21. We were informed by the learned Advocates who appeared in the appeal, that the arbitrators held two sittings in September 1924, and I assume that the owner's claim, the answer thereto and the reply had been filed by that time.

22. On or about the 25th September, 1924 the appellants' attornies informed the plaintiffs' attornies that they had inspected the register of the S.S. 'Baron Jedburgh'? and that the register showed that the owners were the Hogarth Shipping Company Ltd.

23. Apparently, some discussion took place before the arbitrators as to the position, created by this discovery, and the matter was adjourned until January 1925.

24. In the meantime correspondence passed between the parties and Messrs. Pugh and Company, acting, for the owners, stated that they were authorised to represent the Hogarth-Shipping Company Ltd., and that any award made in favour of the claimants would be accepted by the Company and they expressed the hope that the appellants would abandon the point which they had taken.

25. The appellants' attornies declined to agree to this and stated they were instructed to press the point that the proper parties were not before the arbitrators.

26. The result was that on the 8th January 1925 notice was given by Messrs. Pugh and Company of an application to the Court for an order that the 'Hogarth Shipping Company, Ltd.' be either added as co-plaintiff in the suit or substituted as plaintiffs in the place of the plaintiffs, S.C. Hogarth and Sons and that the cause title be amended accordingly. The appellants appeared on the hearing of the summons and opposed the amendment.

27. On the 14th January 1925, an order was made by my learned brother Mr. Justice C. C. Ghose that the plaint and the register of the suit be amended by striking out from the cause title the names and descriptions of the plaintiffs and substituting in lieu thereof the words 'Hogarth Shipping Company Ltd.,' and by making such other amendments in the body of the plaint as might be necessary in consequence of the aforesaid amendment.

28. On the 14th January 1925 Messrs. Pugh and Company on behalf of the owners sent the following letter to the arbitrators Messrs. Edwards and Brown.

On our application to-day to the High Court in the suit; filed by S.C. Hogarth and the other partners in Messrs. H. Hogarth and Sons. v. Mitsui Bussan Kaisha, Ltd., it has been ordered that 'The Hogarth Shipping Company Limited a Company registered under the English Companies Acts and having its registered office at 24 St. Enoch Square in the city of Glasgow in Scotland, should be substituted as plaintiffs in place of S.C. Hogarth and others.

On 8th April last the High Court on the application of Messrs. Mitsui Bussan Kaisha, Ltd., ordered that all further proceedings in the suit should be stayed until the further order of the Court and that the matter in dispute be referred to arbitration in terms of the reference between the parties. The effect of the order of the High Court which had been made to-day is that the Hogarth Shipping Co., Ltd., has been substituted as plaintiffs and the order of 8th April last for reference to arbitration is now an order for reference as between the Hogarth Shipping Co., Ltd., and Mitsui Bussan Kaisha, Ltd.

We ask you to substitute in the arbitration the name of the Hogarth Shipping Co., Ltd. in place of Messrs. H. Hogarth & Sons and to treat the claim for arbitration and the reply which we have already filed with you as filed on behalf of the Hogarth Shipping Co., Ltd.

We are ready to proceed with the arbitration and shall be glad to know when you and your co-arbitrator propose to hold the next sitting.

29. It is to be noted that the writers of this letter refer to the order of 8th April 1924 by which the suit was stayed, as being an order for reference, and that, the amendment in the cause title having been made, it was now an order for reference between the Hogarth Shipping Company Ltd., and the appellants, I have already mentioned that this attitude apparently arose from a misunderstanding of Section 19, which merely gives power to the Court to stay the suit and that which thereafter governed the rights of the parties and the arbitration proceedings was the submission to arbitration contained in the charter party taken together with the provisions of the Arbitration Act, which relate to the various steps and proceedings which may be taken.

30. A copy of this letter was sent to the attornies for the appellants; and, on the 15th January 1925 they sent the following reply: 'We are in receipt of your letter of the 14th instant enclosing copies of your letters to the two arbitrators. We do not agree with the construction placed by you on the effect of the substitution order passed yesterday by Mr. Justice Ghose. The course suggested can only be done by a fresh reference to arbitration or by the new plaintiff obtaining an order from Court for making the alterations in the submission.'

31. To this Messrs. Pugh & Co. replied by the letter of the 16th January which is as follows, ''We are in receipt of your letter No. SP-38401 of the 15th instant.

The arbitrators have acknowledged receipt of our letters to them of the 14th instant and have fixed the date of the next meeting.

At the last meeting you stated before the arbitrators that the claimants should be the Hogarth. Shipping Co., Ltd., and not S.C. Hogarth and others. To meet this technical objection we have obtained the order of substitution.

We do not agree with your views and shall attend before the arbitrators on the date fixed by them.

We also enclose copies of our letters to the two arbitrators of to-day's date.

32. It is not clear when the arbitrators held their next sitting, but I think it was on the 30th January 1925. In the meantime it appears that on the 24th January notice on behalf of the appellants was given to Pugh and Co. on behalf of the plaintiff Company of an application for an order that the suit be expedited in terms of the prayer in the petition.

33. The prayers in the petition were, among others, as follows: 'That the written statement be filed by the 31st January 1925. That affidavit of documents of both parties be filed by the 7th February 1925 and mutual inspection be given immediately thereafter.

That the suit do appear on the top of the Commercial Cause Warning List on 1st March 1925.

34. Upon the hearing of the application an order, which in my experience is unusual and which on the face of it seems to be inconsistent, was made.

35. It is dated the 28th January 1925 and is as follows: 'It is ordered that the application of the defendant Company pursuant to the said Master's Summons be and the same is hereby dismissed. And it is further ordered that the defendant Company do pay to the plaintiff Company its costs of and incidental to this application to be taxed by the Taxing Officer of this Court. And it is further ordered that the defendant Company be at liberty to file their written statement subject to all just exceptions and the Warrant of Attorney in favour of Messrs. Orr. Dignam and Company.'

36. It is clear that the application of the appellants for leave to file the written statement and for expedition of the trial of the suit was dismissed with costs, yet the same order contains a provision that the appellants should be at liberty to file the written statement and the Warrant of Attorney in favour of the appellants' attornies subject to all just exceptions.

37. The terms of the order are inconsistent and, in my judgment, the last portion of the order ought not to have been made. The application to file the written statement was dismissed with costs: presumably on the ground that the suit had been stayed; and, in view of that order, the provision giving leave to the appellants to file the written statement contained in the latter part of the order, in my opinion, was wrong and without any meaning.

38. The arbitrators then proceeded with the arbitration and made their award on the 14th March 1925.

39. The award is as follows: 'The Hogarth Shipping Company, Ltd., Mitsui Bussan Kaisha, Limited. We, having been appointed arbitrators to decide the disputes between the parties in respect of the claim of the owners for demurrage and detention of the S.S. 'Baron Jedburgh', under charter party dated the 29th of November 1920, and having read the papers filed before us, and having heard the Solicitors for both parties and the evidence of the witnesses called before us, and having extended the time for our award to the 15th of March 1925, do hereby award as follows.

That the charterers pay the owners of the steamer Rs. 42,000 (forty-two thousand rupees) plus Solicitors' costs at Rs. 1,200 (one thousand two hundred rupees) and arbitrators' fees and expenses at Rs. 2,969 (two thousand nine hundred and sixty-nine rupees).

40. It is to be noted that it is headed 'The Hogarth Shipping Co. Ltd. v. Mitsui Bussan Kaisha, Ltd.' and recites that the arbitrators had been appointed by the parties in respect of a claim by the owners of the steamship for demurrage and detention.

41. The appellants applied to have the award set aside, and the application was dismissed as already stated.

42. Three main points have been urged on behalf of the appellants in this Court.

43. The first is that no arbitrators were appointed to decide any dispute between the present parties to the suit, i.e., as between the Hogarth Shipping Co., Ltd., and the appellants. As far as the Shipping Company is concerned, I am of opinion that the letter of the 14th January 1925 from Pugh and Company to the arbitrators involved an appointment of the Shipping Company's arbitrator to decide the dispute between the Shipping Company and the appellants and even if any confirmation of the original appointment was required, which I do not think was necessary, it was supplied by the above-mentioned letter. It was, however, urged that the appellants had never appointed an arbitrator to act in any dispute between the Hogarth Shipping Co., Ltd., and themselves.

44. In my judgment the contention is not sound. I have already mentioned that the name of the owners of the vessel was not mentioned in the charter party. It was Graham & Company who declared the 'S.S. Baron Jedburgh' and in so doing they were acting as agents for the owners of the vessel; this declaration was accepted by the appellants.

45. The dispute which arose, was undoubtedly as to the claim for demurrage and detention. This claim could only be made by or on behalf of the owners of the vessel, having regard to the terms of the charter party. This was the only dispute between the parties. I am of opinion (hat when the suit was instituted and when the arbitrators were appointed, the dispute was recognized by both parties as one between the owners of the vessel and the appellants.

46. When the suit was stayed, the arbitrators were appointed by both parties to decide the only dispute which had arisen, viz., the dispute as to demurrage and detention between the owners of the vessel and the appellants. But through a 'bona fide' mistake, under which both parties were labouring the owners were wrongly described as the Firm of Hogarth & Sons.

47. When the mistake was discovered, this was corrected. I am not concerned to say, whether the steps taken by the plaintiffs' advisers to amend the cause title of the suit were necessary or correct.

48. I am satisfied on the evidence that though the appellants protested against the arbitrators proceeding with the arbitration on another ground, to which I shall refer presently, they did not protest at the time that the arbitrators had not been appointed in the dispute between the owners of the vessel, viz., the Hogarth Shipping Co., Ltd. and the appellants.

49. Further, I am prepared to hold that even if they had protested, the protest would have been of no avail, for as I have already said, the dispute, as to which the arbitrators had been appointed by both parties, was a dispute between the parties to the charter party, viz., the owners of the vessel on the one hand, and the appellants on the other; and, if that be the true view of the position, the power of the arbitrators could not be revoked when they had been once appointed except by leave of the Court, unless a different intention was expressed in the submission. It should be noted in connection with this part of the case, that our attention has not been drawn to any evidence showing that the appellants purported to revoke the appointment of their arbitrators.

50. In my judgment the appointment of the arbitrators in the dispute between the owners of the vessel and the appellants remained a valid and binding appointment after the discovery was made that the names of the owners have been wrongly stated. In my opinion, therefore, the first point fails.

51. The second ground on which reliance was placed on behalf of the appellants was that a suit by the Hogarth Shipping Co., Ltd., against the appellants was pending in the High Court which had not been stayed and that consequently the arbitrators were functi officio and had no jurisdiction to proceed with the reference. There is no doubt that this objection was taken on behalf of the appellants before the arbitrators, and it remains to be considered whether this is a sufficient ground for setting aside the award.

52. Reliance was placed on the decisions in Doleman & Sons v. Ossett Corporation (1912) 3 K.B. 257 : 81 L.J.K. B. 1092 : 107 L.T. 581 : 76 J.P. 457 : 10 L.G.R. 915 and Ram Prasad Surajmull v. Mohan Lal Lochminarain 60 Ind. Cas. 895 : 47 C. 752 38 C.L.J. 67. The argument was to the effect that though the suit, brought in the name of the Firm of. H. Hogarth & Sons, had been stayed by an order of the Court, the suit, in which the Hogarth Shipping Co., Ltd., were the plaintiffs had not been stayed and was pending in January 1925 and that consequently the arbitrators were functi officio.

53. I am not able to accept this contention.

54. There was one suit only: viz., No. 358 of 1924: it was brought in the name of H. Hogarth & Sons, it being alleged that they were the owners of the vessel 'Baron Jed-burgh,' the claim was made on the basis that the owners of the vessel were entitled to demurrage and damages for detention of the vessel.

55. It was then discovered that the owners of the vessel had been wrongly described. There is no doubt that this was due to a 'bona fide' mistake, and consequently Order 1, Rule 10 (1912) 3 K.B. 257 : 81 L.J.K.B. 1092 : 107 L.T. 581 : 76 J.P. 457 : 10 L.G.R. 915 of the C.P.C. would apply and the Court had jurisdiction to amend the cause title by substituting the Hogarth Shipping Co., Ltd., for the Firm of H. Hogarth & Sons. The sub-section provides that this may be done at any stage of the suit and on such terms as the Court thinks fit.

56. It was argued that when the order of amendment was made, the suit became a new suit and that it had not been stayed. In my judgment it would be contrary to reason on the facts of this case to hold that the suit had not been stayed or that the Hogarth Shipping Co., Ltd., were desirous of prosecuting their claim in this Court, or that the Court when making the order for substitution intended that the suit should proceed. In my opinion the order of the 14th January 1925 was merely an order for the correction of a bona fide mistake by means of amendment of the cause title and by substituting as plaintiffs the real owners of the vessel, in the Suit No. 358 of 1924 which was to remain stayed until further order of the Court by reason of the order of the 8th April 1924. That this was the intention is clear from the subsequent order of the Court, when it dismissed the application of the appellants for direction as to the filing of their written statement and for the expeditions of the trial of the suit. This application must have been dismissed on the ground that the suit had been stayed. As already stated, the addition to that order that the appellants should have liberty to file the written statement subject to all just exceptions was wrong, meaningless and of no avail, in view of the dismissal of the appellants' application with costs.

57. In my judgment, therefore, the suit had been stayed and was not pending so as to deprive the arbitrators of jurisdiction in the reference; and, the second, point, on which the appellants relied, fails.

58. The third ground, on which the appellants relied, was that the arbitrators were guilty of misconduct in deciding the question of damages without taking any evidence. The arbitrators were the final Judges of questions of law and fact, and there is nothing on the face of the award to show that they made any mistake either in fact or law.

59. It was argued that the arbitrators had awarded damages for detention at the rate which had been agreed upon in the charter party for the demurrage days.

60. I do not know, whether this is so, for there is nothing on the face of the award to show that this was the principle on which the arbitrators acted. Even if the arbitrators did so act, I am not prepared to hold that they are guilty of misconduct.

61. In Carver on Carriage By Sea (Section 109), the following passage occurs:

Damages for detention are generally calculated at the rate which has been agreed upon for the demurrage days if any are provided for. But either party may show-that that is not the true measure of the loss to the ship-owners by the detention and in that case that rate ought not to be adopted. The shipowner should have a just compensation for his loss, and not more or less.' In my opinion, that is a correct description of the position.

62. There is no evidence before us to which we are entitled to refer, which goes to show that the arbitrators were guilty of any misconduct and, in my opinion, there is no substance in the third point on which the appellants relied.

63. In my judgment, therefore, this appeal must be dismissed with costs.

Buckland, J.

64. I agree with the judgment delivered by the learned Chief Justice and only desire to add a few observations on one of the points argued.

65. Apart from the question whether the jurisdiction of the arbitrator was ousted by a suit all that need be considered is whether the provisions of the law in relation to arbitrations to which the Arbitration Act applies were observed.

66. Not only do I agree that there was no pending suit ousting the jurisdiction of the arbitrator, a point which I do not propose to deal with further, but one may go on to say that the suit had nothing to do with the reference. References to the suit have, I think, somewhat obscured the correct principles of law which govern this part of the case.

67. The suit was stayed and except the application and order made for that purpose the law admits of no contract between proceedings in Court and proceedings before arbitrators for the purpose of arriving at a decision of a dispute between parties.

68. Whatever was done in the course of the suit may, therefore, be ignored for the present purpose, and all that need be considered is whether there were (1) a submission by the parties to the dispute, (2) a reference before arbitrators duly appointed by them under the submission, and (3) an award properly made by such arbitrators.

69. The dispute was between the owners of the vessel and the defendants. That the charter party contains a submission is indisputable. That the defendant Company appointed their arbitrator to decide such dispute is also indisputable. The defendant Company might have argued, had the point arisen, that they never appointed their arbitrator to decide any dispute between themselves and H. Hogarh & Sons, seeing that the latter were not and are not the owners and, therefore, there was no dispute between themselves and that firm, but they cannot contend that the arbitrator had no jurisdiction to decide a dispute between themselves and the other party to the submission. The letter of the 14th January 1925 from Messrs. Pugh & Co. to the arbitrators is, in my opinion, evidence of the appointment, which need not be in writing, if not the actual appointment, of Mr. Edward as the respondent Companys' arbitrator. The second of the conditions to which I have referred was, therefore, fulfilled and in due course the arbitrators made their award.

70. If the point is shorn of surplusage and presented, as I have endeavoured to do, in its simplest form it seems to me that all necessary conditions were fulfilled.

71. On the 3rd point, viz., the alleged misconduct of the arbitrator I have nothing to add to what my Lord has said and I agree that this appeal should be dismissed with costs.


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