2017 (2) TMI 1331 - HC - Customs

Petitions Dismissed, Parties to Pursue Arbitration

M/s. Five Ocean Corporation Pvt. Ltd., M/s. Cho Pyongho, & Others Versus The Commissioner of Customs, New Customs House,

The court dismissed the petitions, directing the parties to pursue arbitration as per their agreements. The port authorities were allowed to relocate the ... Amendment of Import General Manifest (IGM) - Arbitration clause - Held that: - The complexity of the matter is such that the IGM cannot be ordered to be amended or issued based on the version of any one party. On the ground that the Customs Authorities cannot be made parties to the arbitration proceedings, taking steps for the initiation of the arbitration proceedings cannot be avoided. Once the arbitrator adjudicates the disputes and decides, inter alia, as to who is entitled to be the holder of the Bill of Lading, which consignee is entitled to take the cargo, etc. the said order is only to be acted upon by the Customs Authorities. The amendment to the IGM in a case of this nature can only be consequential to the passing of the award by the arbitrator. These petitions are disposed of reserving the liberty to the petitioners to resort to the initiation of the arbitration proceedings in accordance with the relevant clauses of their agreements. Issues Involved:1. Amendment of Import General Manifest (IGM)2. Right to transfer Bill of Lading3. Jurisdiction and maintainability of writ petition4. Suppression of material facts5. Dispute resolution through arbitration6. Port authorities' concerns and public interestIssue-Wise Detailed Analysis:1. Amendment of Import General Manifest (IGM):The petitioners sought a writ of mandamus to amend the IGM to reflect the change of consignee from respondent No. 4 to M/s. JHK Consultancy Private Limited. Alternatively, they requested the respondents to consider their representations for the same. The petitioners argued that the holder of the Bill of Lading has the right to transfer it, citing the Apex Court’s decision in BRITISH INDIA STEAM NAVIGATION CO. LTD. v. SHANMUGHAVILAS CASHEW INDUSTRIES AND OTHERS. However, the respondents contended that the amendment sought falls under major amendments, requiring specific documents and NOC from the first consignee, which were not provided.2. Right to Transfer Bill of Lading:The petitioners claimed the right to transfer the Bill of Lading, supported by the Apex Court’s ruling in UNION OF INDIA AND ANOTHER v. SAMPAT RAJ DUGAR AND ANOTHER, emphasizing that if the importer fails to pay, the exporter should be allowed to deal with or re-export the goods. They also referenced AGRIM SAMPADA LTD. & ANR. v. UNION OF INDIA & OTHERS, asserting that ownership remains with the foreign supplier if the importer abandons the goods. The respondents argued that the petitioner was not the transporter and had not provided necessary documents for the amendment.3. Jurisdiction and Maintainability of Writ Petition:The petitioners maintained that the writ petition was valid despite an arbitration clause, citing several Supreme Court cases, including Union of India v. Tantia Construction Private Limited, which allows writ petitions in certain circumstances. The respondents argued that the petitioner suppressed material facts and engaged in 'chance litigation,' making the writ petition inadmissible. They cited ARUNIMA BARUAH v. UNION OF INDIA AND OTHERS, which disallows equitable reliefs if material facts are suppressed.4. Suppression of Material Facts:The respondents accused the petitioners of suppressing material facts, such as previous arbitration applications and ongoing proceedings, which were not disclosed in the writ petition. They argued that this suppression disqualified the petitioners from seeking any equitable relief, supported by the Apex Court’s judgment in ARUNIMA BARUAH.5. Dispute Resolution through Arbitration:The agreements between the parties contained arbitration clauses requiring disputes to be resolved through the Singapore International Arbitration Centre. The court emphasized that the parties should adhere to these clauses and seek arbitration. The court referenced JOSHI TECHNOLOGIES INTERNATIONAL INC. v. UNION OF INDIA, which discourages the High Court from exercising jurisdiction under Article 226 in contractual disputes with arbitration clauses.6. Port Authorities' Concerns and Public Interest:The port authorities highlighted the prolonged storage of coal, causing fire hazards and financial losses. The court recognized the public interest in resolving the storage issue and permitted the port authorities to shift the coal to a safe location, ensuring safety measures and the presence of representatives from all parties involved. The court cited Section 62 of the Major Port Trusts Act, 1963, to support this decision.Conclusion:The court dismissed the petitions, directing the parties to pursue arbitration as per their agreements. The port authorities were allowed to relocate the coal to prevent further hazards and losses, ensuring the process was conducted safely and transparently. No costs were awarded, and pending applications were dismissed as unnecessary.