Delhi High Court
M/S C & C Maritime Pte Ltd vs Advance Surfactants India Ltd on 24 January, 2019
* 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 ..... Decree Holder
Through: Mr.Arun Khosla and
Mr.K.Gangadharan, Advs.
versus
ADVANCE SURFACTANTS INDIA LTD.....Judgment Debtor
Through: Mr.Pankaj Seth and
Mr.Shoumik Mazumdar, Advs.
alongwith Mr.Vishal Sharma,
AR.
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 USD 19,170.05 in favour of the petitioner
against its claim for demurrage and a further sum of USD 11,483.50
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 USD 11,483.50 and the same rate of interest on USD
19,170.05 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
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
USD 31,687,55.15 ( USD 20203.55 demurrage +USD 11483.50
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"
7. 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
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."
9. 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:
"From: Mail Delivery System Delivery
[email protected]
Sent: Monday, September 2013 4:21:36 PM
To: [email protected]
Subject: Undeliverable..
Delivery has failed to these recipients or groups:
[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.
The following organization rejected your message:
[103.13.98.25].
Diagnostic information for administrators:
...........
[email protected]
.......
.....Unknown address error.....
21 Ms Kay received a message in similar terms on the same
day and at the same time, in respect of:
[email protected]
EX.P. 311/2014 Page 9
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. The failure notice 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. One failure notice named
[email protected]: and the other 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".
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
SCC 433, 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:-
"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 that 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 the proceeding for setting aside an award
under Section 34 is concerned, the principles laid down in Saw
Pipes would govern the scope of such proceedings.
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:-
"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 technical infringement of natural justice. 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......"
EX.P. 311/2014 Page 13
15. In National Ability S.A. vs. Tinna Oil & Chemicals Ltd. &
Ors., (2008) 105 DRJ 446, 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 that 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.
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. EA 233/2015 and
EA 607/2015 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
JANUARY 24, 2019/rv
EX.P. 311/2014 Page 15
