TaxTMI 
TaxTMI 
1987 (1) TMI 482
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....r contract dated April 3, 1980 was entered into between the parties in respect of 4,000 metric tonnes of groundnut kernels. Clause 9 of this contract provided as follows: All other terms and conditions for supply not specifically shown and covered hereinabove shall be as per previous contract signed between us for earlier supplies of H.P.S. 3. The FOSFA-20 contract contains an arbitration clause which is as follows: ARBITRATION: Any dispute arising cut of this contract, including any question of law arising in connection therewith, shall be referred to arbitration in London (or elsewhere if so agreed) in accordance with the Rules of Arbitration and Appeal of the Federation of Oils, Seeds and Fats Association Limited, in force at the date of this contract and of which both the parties hereto shall be deemed to be cognizant. Neither party hereto, nor any persons claiming under either of them shall bring any action or other legal proceedings against the other of them in respect of any such dispute until such dispute shall first have been heard and determined by the arbitrators, umpire or Board of Appeal (as the case may be) in accordance with the Rules of Arbitration and Appeal o....
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....er terms and conditions as per FOSFA-20 contract terms". 6. So far as the second contract dated April 3, 1980 is concerned, it was pointed out by the learned Judge that it did not make any mention of FOSFA-20 contract and all that was stated in Clause 9 thereof was that all other terms and conditions for supply not specifically shown and covered therein should be as per previous contract signed between the parties for similar supply of HPS. The learned Judge took the view that only those terms and conditions which were referred to or connected with and germane to the supply, had been made applicable from the earlier contract that is to say, the first contract dated January 12, 1980. Further, it was observed that a term about arbitration was not incidental to supply of goods and it was difficult to read from the provisions of Clause 9 of the second contract that the arbitration clause was lifted from there and made a part of the same. Upon the said findings, the learned Judge allowed the petition under Section 33 of the Arbitration Act in so far as it related to the second contract dated April 13, 1980. It was held that no arbitration agreement existed between the parties and, as s....
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....stent with the bill of lading they were insensible, and must be disregarded. The bill of lading referred to the charterparty, and therefore, when the condition was read in, 'All disputes under this charter shall be referred to arbitration,' it was clear that that condition did not refer to disputes arising under the bill of lading, but to disputes arising under the charterparty. The condition therefore was insensible, and had no application to the present dispute, which arose under the bill of lading. 8. According to Lord Esher M.R., the arbitration clause in charterparty "all disputes under this charter shall be referred to arbitration", if incorporated into the bill of lading would be quite insensible because of the words "under this charter". The arbitration clause was, therefore, meant only for the charterparty and not for the bill of lading. 9. In a Full Bench decision of the Calcutta High Court in Dwarkadas & Co. v. Daluram Gaganmull AIR 1951 Cal 10 F.B., the said observation of Lord Esher M.R. was considered by Harries, CJ. The learned Chief Justice also took the view that if the arbitration clause in the charterparty was imported into the bill of lading it would be quite ....
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.... germane to the subject-matter of the first contract. In support of his contention he has placed much reliance upon the decision of the Court of Appeal in the case of The Annefield [1971] 1 All.E.R. 394. In that case the question was whether the arbitration clause in the charterparty was incorporated into the bill of lading by virtue of the incorporation clause Clause 39, which was the arbitration clause, contained the words "All disputes from time to time arising out of this contract". In considering the question Lord Denning M.R., referred to the decision in The Njegos [935] All.E.R. Rep. 863, where in the course of the discussion, it transpired that these clauses in the charterparty and bill of lading had been in existence since 1914 and, it had always been held that the arbitration clause was not incorporated in the bill of lading. On behalf of the shipowners in that case it was argued that if the arbitration Clause 39 was incorporated into the bill of lading, the expression "this contract" in Clause 39 would then be the contract evidenced by the bill of lading. In other words, the arbitration clause must be read in its bill of lading context. This contention was made on the ba....
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....tter of which is different from the contract which is being entered into by them, incorporates the terms of the earlier contract by reference by using general words, we do not think there would be any bar to such incorporation merely because the subject-matters of the two contracts are different, unless, however, the incorporation of the arbitration clause will be insensible or unintelligible, as was in Hamilton & Co. v. Mackie & Sons, (supra). In the instant case, the arbitration clause in FOSFA-20 contract will fit in the first contract. In other words, it will not be either insensible or unintelligible. In our opinion, therefore, the High Court was right in holding that the arbitration clause in FOSFA-20 contract was incorporated into the first contract. 13. In the other appeal which has been preferred by Alimenta, it has been held by the High Court that there has been no incorporation of the arbitration clause into the second contract. In the second contract, Clause 9 provides "all other terms and conditions for supply not specifically shown and covered hereinabove shall be as per previous contract signed between us for earlier supplies of HPS". There is a good deal of differe....