IN THE HIGH COURT AT CALCUTTA ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL SIDE E.C.448 of 2013 Jaldhi Overseas Pte.
Ltd -VsAmbo Exports Limited Before: Hon’ble Justice Harish Tandon Date: 13/06/2016 Appearance: Mr.K.Thaker, Mr.Chayan Gupta, Ms.Divya Singhania, Mr.Amitabh Ray.
….
For the Petitioner / Award Holder.
Mr.R.K.Chowdhury, Ms.Saswati Joardar, Mr.Protyush Chatterjee.
….
For the Respondent / Award Debtor The Court: The Execution Application is filed to enforce a foreign award dated 7th January, 2013 under Section 46 of the Arbitration and Conciliation Act.
The enforcement is further sought to the final award for costs dated 1st March, 2013.
The salient facts as would emerge from the affidavit in support of the tabular statement are that the petitioner chartered the vessel for carriage of the cargo from Haldia and Sagar to a port in China.
The said vessel was chartered for shipment of the iron ore fines to the respondent under the Fixture Note dated 30th March, 2011.
The vessel arrived at Haldia on 1st April, 2011 and tendered Notice of Readiness (N.O.R) to the respondent.
After having loaded the goods on the said vessel the respondent utilized time in excess of laytime allowed under the said Fixture which attracted the demurrage and therefore the respondent became liable to the petitioner to pay an aggregated sum of USD28068.82/-.
On failure to pay the demurrage the petitioner invoked the arbitration agreement and requested the respondent to agree on sole arbitrator.
Since, there was no agreement on such appointment an application was made before the Hong Kong International Arbitration Centre (HKIAC) which appointed the sole arbitrator who intimated the parties of his appointment on 18th June, 2012.
Subsequently, the Claim Submissions with supporting documents were filed by the petitioner and the copy thereof was served on the respondent.
The respondent did not file the Defence Submissions.
The arbitrator extended the time and communicated the same to the respondent.
The time to file Defence Submissions was extended from time to time until the request was made by the petitioner to proceed with the arbitral proceeding for making and publishing the award.
The arbitrator published the final award whereby and whereunder the claim of the petitioner was accepted with interest and costs.
The arbitrator, however, reserved his power to tax the costs and subsequently make a final award on costs.
Both the awards are sought to be enforced through the instant Execution Application.
It is stated in the said affidavit that the award was served on the respondent but the failure to pay the awarded sum the award becomes enforceable.
In the opposition to the Execution Application several points are raised but the respondent ultimately based his objection on interpretation of Clause 13 of the Fixture Note.
For the purpose of convenience, Clause 13 is quote herein below:“13.
DEMURRAGE/ DESPATCH IF ANY AT THE LOADPORT TO BE SETTLED WIN5BANKING DAYS AFTER COMPLETION OF LOADING AGAINST PRESENTATION OF FULL DOCS CHRTRS/OWNERS LAYTIME CALCULATION ALONG WITH SUPPORT DOCS SUCH AS NOR SOF DEMURRAGE/DESPATCH IF ANY AT DISPORT TO BE SETTLED WITHIN10BANKING DAYS ACo.AGAINST PRESENTATION OF FULL DOCS CHRTRS/OWNERS LAYTIME CALCULATION ALONGWITH SUPPORT DOCS SUCH AS NOR, SOF.” It is sought to be contended by the respondent that the said clause is a time barred clause and failure to strict adherence thereof defeats the claim of the petitioner.
The respondent further says that the arbitrator have misinterpreted the said clause holding that the petitioner have acted in terms thereof and erred in awarding the claim amount on account of demurrage.
The respondent put much emphasis on Clause 13 of the Fixture Note that unless the full documents with laytime calculation in support thereof pertaining to N.O.R and statement of facts are presented and settled within 5 banking days at the load port or 10 banking days at the destination port the claim on account of demurrage is not entertainable and the right shall not be fructified.
According to the respondent, the time barred clause in relation to the commercial documents are to be construed strictly as any departure therefrom would render the claim liable to fail.
On the other hand, the petitioner says that the arbitrators have interpreted the said clause and recorded categorical findings that there is no departure therefrom and proceeded to award the claim put forth by the petitioner in his Claim Submissions.
It is further contended that the interpretation of an agreement is within the competence of the arbitrator and the Court should be slow in interfering with such award.
It is submitted that the arbitrator have recorded the relevant dates which is in conformity with Clause 13 of the Fixture Note and no ambiguity can be seen nor such interpretation can be faulted with at the stage of execution.
In other words, it is submitted that the foreign award cannot be challenged on merit unless the ground set forth in S.48 of the Arbitration and Conciliation Act, 1996 are made out.
It would be appropriate at this stage to notice the judgment cited by the respondent in support of his contention that Clause 13 is restrictive and a prohibitory clause and strict adherence thereof is sine qua non for determination of the disputes raised before the arbitrator.
In case of Waterfront Shipping Company Limited –versus Trafigura AG reported in (2008) 1 Lloyd’s Rep 286 the Queen’s Bench Division, Commercial Court, England and Wales High Court held that the time bar provision is nearly analogous to a limitation clause and should be given their ordinary and natural meaning.
The clause which fell for consideration before the Queen’s Bench Division was explicit in the sense that if a claim in writing is not presented to the charters together with the supporting documentation within 90 days of the completion of discharge of the cargo, the charter shall be discharged and released from all liabilities in respect of any claim for demurrage.
The said clause cannot be equated with the Clause 13 of the Fixture Note as it does not contain any restriction that the noncompliance would either waive or destroy the right to claim demurrage.
It would not be wrong to say that the time bar clause must be clear and unambiguous and does not leave any residual doubt.
Even in case of Kassiaopi Maritime Co Ltd –versus Fal Shipping Co.Ltd reported in (2015) EWHC318(Comm) the Queen’s Bench of England and Wales High Court (Commercial Court) was considering the time barred clause which clearly provides that no claim by the owner in respect of additional time used in cargo operations shall be considered by the charterers unless it is accompanied by the supporting documents indicated therein.
Clause 20 thereof provides that the charterers shall be discharged and released from all liabilities in respect of any claim for demurrage unless the claim in writing has been presented to the charterers together with supporting documents within 90 days of the completion of discharge of cargo carried under.
It was held that the requirements are pre-requisite as the claim would be considered as wholly barred for its failure.
In case of Axios Navigation Company Limited –versus Indian Oil Corporation Limited (Arbitration Petition No.132 of 2009 decided on 4th January, 2012) the Bombay High Court interpreted the restrictive clause in a contract and held that if the things are required to be done in a particular manner the same should be done in such manner and not otherwise.
In the said report the challenge was made to an arbitral award under Section 34 of the Arbitration and Conciliation Act where the arbitrator could not unanimously concur the interpretation of the restrictive clause.
Clause 34 of the charter party agreement clearly provides that the charter shall in no event be liable for demurrage unless the claim includes any elaborate details of facts upon which such claim is based and is presented to the charters in writing within 45 days upon completion of discharge.
The majority view was that the said clause is mandatory in nature as the language suggests that unless the claim in writing is made within 45 days upon completion of discharge the charter shall not be liable for demurrage.
The descending arbitrator held that the said clause is not binding and therefore the period enshrined therein is not mandatory.
In the above perspective it is held that such restrictive clauses are regularly followed in national and international contracts specifically referring to the claims of demurrage in charter party agreements in maritime law which should be acted and the parties are bound by such restrictive clause.
The aforesaid judgment in my view is not pointer to an issue involved herein.
The clause contained in the charter party agreement does not contain the words in negative form that unless the claim is made within a specified time it would exonerate or relieve the charters from any liability for demurrage.
The Clause 13 of the fixture note provides that the demurrage if any at the load port to be settled within five banking days after completion of loading against presentation of full documents with load time calculation along with the supporting document and to be settled within ten banking days at the destination port.
The arbitrator expressly recorded the full details when the claim of demurrage was made and held that it was strictly in conformity with the said clause.
The arbitrator is a sole authority to interpret the contract and the challenge can be made only on the grounds enumerated under Section 48 of the Arbitration and Conciliation Act.
The scope of enquiry by the Court before whom the award is sought to be enforced is limited to such grounds as mentioned in Section 48 of the Act and restricted scrutiny within the four corners of the said provision which does not imbibe any grounds that the foreign award can be impeached on merits.
Though an element of public policy is sought to be brought by the Respondent but could not demonstrate how the award can be interfered with being opposed to public policy as held in Renusagar Power Company Ltd –VsGeneral Electric Company reported in (1994) Supp.1 SCC644 A distinction is drawn by applying the rule of public policy between the matter governed by domestic law and a matter involving conflict of laws.
It is further held that application of doctrine of public policy in the field of conflict of laws is more limited than that in the domestic law and the Courts are slower to invoke public policy in cases involving foreign element when a purely municipal local issues are involved.
In a subsequent decision rendered in case of Shri Lal Mahal Limited –versus Progetto Grano Spa reported in (2014).SCC443the concept of public policy was further advanced in relation to Section 34 of the Act and was given a limited interpretation in case of enforcement of the foreign award in these words:“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 (1) 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).30.
It is true that in Phulchand Exports a two-Judge Bench of this Court speaking through one of us (R.M.Lodha, J.) accepted the submission made on behalf of the appellant therein that the meaning given to the expression “public policy of India” in Section 34 in Saw Pipes must be applied to the same expression occurring in Section 48(2)(b) of the 1996 Act.
However, in what we have discussed above it must be held that the statement in para 16 of the Report that the expression “public policy of India used in Section 48(2)(b) has to be given a wider meaning and the award could be set aside, if it is patently illegal” does not lay down correct law and is overruled.” This Court, therefore, does not find the objection put forth by the Respondent against the enforceability of the foreign award has any substance.
There shall be an order in terms of Prayer ‘a’ in Column 10 of the Tabular Statement.
The persons named in Prayer ‘d’ in Column 10 of the Tabular Statement are directed to file Affidavit of Assets in Form 16A of Appendix ‘E’ of the Code of Civil Procedure within 4 (four) weeks from this date and shall also remain personally present for examination on the returnable date.
The Execution Application shall appear after 4 (four) weeks for examination of the judgment debtors in the supplementary list.
(Harish Tandon, J.)