Supreme Court of India
M/S. CARAVEL SHIPPING SERVICES PVT. LTD. versus M/S. PREMIER SEA FOODS EXIM PVT. LTD. on 29 October 2018
2018 INSC 1008[2018] 14 S.C.R. 289
M/S. CARAVEL SHIPPING SERVICES PVT. LTD.
v.
M/S. PREMIER SEA FOODS EXIM PVT. LTD.
(Civil Appeal Nos. 10800-10801 of 2018)
OCTOBER 29, 2018
[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Arbitration and Conciliation Act, 1996: ss.7(3), 7(4), 8 – Billof lading – Suit for recovery by respondent-consignor in Kochicourt – Application filed by appellant, who is agent to facilitatetransport under s.8 of AC Act on the basis of arbitration clause inBill of Lading – In the application, it was pointed out that s.11application was also filed in Chennai court – Kochi court dismisseds.8 application on the ground that the printed conditions annexedto the Bill of Lading would not be binding upon the parties andalso that as no part of cause of action arose in Chennai, applicationwas not maintainable – High Court dismissed the Original Petitionfiled under Art.227 of the Constitution of India accepting the viewof Kochi court – On appeal, held: Respondent expressly agreed tobe bound by the arbitration clause despite the fact that it was aprinted condition annexed to the Bill of Lading – Further, respondentitself had filed recovery suit by relying upon the Bill of Lading aspart of its cause of action – Therefore, respondent cannot blow hotand cold and argue that for the purpose of its suit, it will rely uponthe Bill of Lading (though unsigned) but for the purpose ofarbitration, the requirement of the Arbitration Act that the arbitrationclause should be signed is not fulfilled – The order of High Court isset aside.
Allowing the appeals, the Court
HELD:1. The Bill of Lading makes it clear that the term“Merchant” (which is defined in the Standard conditionsGoverning Multimodal Transport Documents - Clause (1) (e) asmeaning shipper, consigner or consignee) expressly agrees tobe bound by all the terms, conditions, clauses and exceptions onboth sides of the Bill of Lading whether typed, printed orotherwise. A perusal of the arbitration clause, which is Clause25 being a printed condition annexed to the Bill of Lading, shows
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290 SUPREME COURT REPORTS [2018] 14 S.C.R.
Athat the respondent has expressly agreed to be bound by thearbitration clause despite the fact that it is a printed conditionannexed to the Bill of Lading. Secondly, it must be rememberedthat the respondent has itself relied upon the Bill of Lading aspart of its cause 5 of action to recover the sum of Rs.26,53,593/-in the suit filed by it. The respondent, therefore, cannot blow hotBand cold and argue that for the purpose of its suit, it will relyupon the Bill of Lading (though unsigned) but for the purpose ofarbitration, the requirement of the Arbitration Act is that thearbitration clause should be signed. [Paras 7, 8][292-E-F;293-A-B]C2. The fact that the arbitration agreement shall be in writingis continued in the 1996 Act in Section 7(3) thereof. Section 7(4)only further adds that an arbitration agreement would be found inthe circumstances mentioned in the three sub-clauses that makeup Section 7(4). This does not mean that in all cases an arbitrationDagreement needs to be signed. The only pre-requisite is that itbe in writing, as has been pointed out in Section 7(3). This beingthe case, the present is a clear case where,under Section 7(5) ofthe Act the reference in the Bill of Lading is such as to make thearbitration clause part of the contract between the parties.[Paras 9, 10][293-D-E]EM.R. Engineers and Contractors Private Limited v. SomDatt Builders Limited (2009) 7 SCC 696 : [2009] 10SCR 373 ; Jugal Kishore Rameshwardas v. Mrs.Goolbai Hormusji AIR 1955 SC 812 : [1955] SCR 857
– relied on.FCase Law Reference
[2009] 10 SCR 373relied onPara 5[1955] SCR 857relied onPara 9
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 10800-10801 of 2018.G
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From the Judgment and Order dated 08.09.2015 of the HighCourt of Kerala at Ernakulam in OP(C) No. 522 of 2013 (O) andJudgment and Order dated 14.06.2016 in R.P. No. 135 of 2016.
Ms. Liz Mathew, M. F. Philip, Advs. for the Appellant.
P. A. Noor Muhamed, Sunny P. Markose, Ms. Giffara S., HBilal Niamathulla, Advs. for the Respondent.
The Judgment of the Court was delivered by
R. F. NARIMAN, J.
1. Leave granted.
2. The present appeals arise out of a document styled as“Multimodal Transport Document/Bill of Lading” dated 25.10.2008.This Bill of Lading states that the Consignor/Shipper is one M/s PremierSeafoods Exim Private Limited of Kerala, and that Caravel ShippingServices Private Limited, who is the appellant before us, is the agentwho facilitates transport. The very opening Clause of the Bill of Ladingspecifies:
“In accepting this Bill of Lading the Merchant expressly agreesto be bound by all the terms, conditions, clauses and exceptionson both sides of the Bill of Lading whether typed, printed orotherwise.”
3. The Respondent filed a Suit being O.S. No. 9 of 2009 beforethe Sub-Judge’s Court in Kochi to recover a sum of Rs. 26,53,593/- inwhich the Bill of Lading was expressly stated to be a part of cause ofaction. Soon after the Suit was filed, an I.A. being I.A. No. 486 of 2009was filed by the appellant under Section 8 of the Arbitration andConciliation Act, 1996 (hereinafter referred to as “the Act”) in which itwas pointed out to the Court that an arbitration clause was included inthe printed terms annexed to the Bill of Lading. The I.A. also pointedout that a Section 11 petition to appoint an Arbitrator in accordance withClause 25, being the printed term in question, has also been filed inChennai. The Sub-Court, Kochi, by its judgment dated 08.01.2013dismissed the I.A., stating that printed conditions annexed to the Bill ofLading would not be binding upon the parties, and also that as no part ofthe cause of action arose in Chennai, the I.A. would have to be dismissed.
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4. In the Original Petition filed under Article 227 of the Constitutionof India, the High Court referred to certain provisions of the MultimodalTransportation of Goods Act, 1993, and also stated that the arbitrationclause, being in a printed condition, there being no intention to arbitrateand nothing to show that Clause 25 was brought to the notice of therespondent, agreed with the learned Sub-Judge and dismissed the OriginalPetition. A Review filed against the said judgment was also dismissedby a judgment dated 14.06.2016.
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A5. Ms. Liz Mathew, learned counsel appearing on behalf of theappellant pointed out that printed conditions of the Bill of Lading wereexpressly referred to in the Bill of Lading and both parties were statedto be bound by the same. This being so, in accordance with Section 7(5)of the Arbitration Act read with this Court’s judgment inM.R. Engineersand Contractors Private Limitedvs.Som Datt Builders Limited, (2009)B7 SCC 696 would make it clear that there was a reference in the contractto the arbitration clause, and since it is in writing and the reference issuch that the arbitration clause formed part of the contract, according toher, both the courts were in error. She also pointed out to us that, in themeanwhile, the Madras High Court, by order dated 09.01.2015, hasCreferred to the Kerala proceeding, but nonetheless applied the arbitrationclause and appointed a Senior Advocate to arbitrate between the partiesin that proceeding.
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6. On the other hand, Mr. P.A. Noor Muhamed, learned counselfor the respondent, invited our attention to Section 7(4) of the Act andDargued that Section 7(4)(a) requires an arbitration agreement to be in adocument that is signed by the parties. Since the Bill of Lading was notsigned by his client, according to him, he is, therefore, not bound by thearbitration clause contained in that document. Further, he has also arguedthat at present the stage of the suit is that issues have been struck andone witness is being examined.E
7. Having heard learned counsel for both parties, we are of theview that the Bill of Lading makes it clear that the term “Merchant”(which is defined in the Standard Conditions Governing MultimodalTransport Documents - Clause (1) (e) as meaning shipper, consigner orconsignee) expresslyagrees to be bound by all the terms, conditions,Fclauses and exceptions on both sides of the Bill of Lading whether typed,printedor otherwise. The arbitration clause, which is Clause 25 being aprinted condition annexed to the Bill of Lading, reads as under:
“25. Jurisdiction/Arbitration:
The contract evidenced by the Bill of Lading shall be governed byGthe laws of India, and subject to the exclusive jurisdiction of courtin Chennai only. Disputes/difference arising out of this contractand/or connection with the interpretation of any of its clausesshall be settled by arbitration in India in accordance with theArbitration & Conciliation Act, 1996. The No. of Arbitrators shallbe three, the Arbitrators shall be commercial persons the venueHfor arbitration shall be Chennai.”
8. A perusal of the same shows that the respondent has expresslyagreed to be bound by the arbitration clause despite the fact that it is aprinted condition annexed to the Bill of Lading. Secondly, it must beremembered that the respondent has itself relied upon the Bill of Ladingas part of its cause of action to recover the sum of Rs.26,53,593/- in thesuit filed by it. The respondent, therefore, cannot blow hot and cold andargue that for the purpose of its suit, it will rely upon the Bill of Lading(though unsigned) but for the purpose of arbitration, the requirement ofthe Arbitration Act is that the arbitration clause should be signed.
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9. In addition, we may indicate that the law in this behalf, inJugalKishore Rameshwardasvs. Mrs. Goolbai Hormusji, AIR 1955 SC812, is that an arbitration agreement needs to be in writing though it neednot be signed. The fact that the arbitration agreement shall be in writingis continued in the 1996 Act in Section 7(3) thereof. Section 7(4) onlyfurther adds that an arbitration agreement would be found in thecircumstances mentioned in the three sub-clauses that make up Section7(4). This does not mean that in all cases an arbitration agreement needsto be signed. The only pre-requisite is that it be in writing, as has beenpointed out in Section 7(3).
10. This being the case, the present is a clear case where, underSection 7(5) of the Act read with M.R. Engineers and ContractorsPvt. Ltd. (supra) (paras 22 & 24), the reference in the Bill of Lading issuch as to make the arbitration clause part of the contract between theparties.
11. The fact that the stage of the present suit is that a particularwitness is being examined would not come in the way of the Section8(3) application being allowed inasmuch as the Section 8(3) applicationwas filed in the same year as that of the suit. We may also add that wehave not gone into the Multimodal Transportation of Goods Act, 1993for the reason that whether the present Bill of Lading is governed by theprovisions of the Act (Section 26 in particular) or not would not makeany difference to the position that an arbitration clause forms part of anagreement between the parties, and would, therefore, be governed bySection 7 of the Arbitration Act.
12. We, therefore, allow the appeals and set aside the judgmentsof the High Court.
Devika Gujral
Appeals allowed.
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