2008 (9) TMI 996 - SC - Companies Law

Supreme Court affirms arbitration clause in Charter Party Agreement, dismisses appeal.

The Supreme Court dismissed the appeal, affirming the existence of a Charter Party Agreement with an arbitration clause between the parties. The Court ... - Issues Involved:1. Existence of Arbitration Agreement2. Jurisdiction of Courts3. Applicability of Section 45 of the Arbitration and Conciliation Act, 19964. Validity of Charter Party AgreementSummary:Existence of Arbitration Agreement:The appellant contended that the trial court did not provide a finding on the existence of an Arbitration Agreement, making the invocation of Section 45 of the Arbitration and Conciliation Act, 1996 unjustified. The appellant argued that even if a Charter Party Agreement existed, it did not cover the shipment of 1,100 MT of bagged cargo. The Supreme Court noted that the appellant had signed the first page of the Charter Party Agreement and that subsequent correspondences indicated the existence of such an agreement. The Court referred to Section 7 of the Act, which allows an arbitration agreement to be inferred from signed documents or exchanges of communication.Jurisdiction of Courts:The appellant raised the issue of jurisdiction, arguing that the Delhi High Court had already concluded the existence of a Charter Party Agreement with an arbitration clause. The Andhra Pradesh High Court affirmed this finding, noting that the appellant had previously withdrawn an appeal challenging this conclusion. The Supreme Court upheld this view, stating that the Delhi High Court's findings were explicit and binding.Applicability of Section 45 of the Arbitration and Conciliation Act, 1996:The appellant argued that the respondent did not file the original Charter Party Agreement, as required u/s 8 of the Act. The Supreme Court clarified that Section 45, which deals with international commercial arbitrations, was applicable and does not require the original agreement to be filed. The Court emphasized that the appellant had admitted to signing the first page of the Charter Party Agreement and had not questioned its authenticity.Validity of Charter Party Agreement:The appellant claimed that the loading of the cargo was done under a bill of lading and not a Charter Party Agreement. The Supreme Court found this argument unconvincing, noting that the appellant had agreed to pay compensation to the respondent, indicating the existence of an agreement. The Court also referred to a fixture note that mentioned arbitration in London, further supporting the existence of a Charter Party Agreement. The Court concluded that the Charter Party Agreement was valid and enforceable, and the matter should be referred to arbitration in London as per the agreement.Conclusion:The Supreme Court dismissed the appeal, affirming the concurrent orders of the High Court and the trial court. The Court found no reason to interfere with the findings that a Charter Party Agreement existed between the parties, which included an arbitration clause. The appeal was dismissed with no order as to costs.