High Court Division
(Civil Revisional Jurisdiction)
Md Nuruzzaman J
Quazi Reza-ul Hoque J
World Trade Shipping Corporation, New York
… ………………… Appellant
Vs
Sonat International Inc
and others
……….. Respondents
Judgment February 20th, 2012.
Waiver
It is now a well settled principle that if any party by disregarding the arbitration clause institutes a suit, the other party must raise objection before filing of the written statement, otherwise that would be deemed as an waiver of the condition. …….(15)
Government of Bangladesh vs Ekramul Haque, 2 BLC (1997) 411, ref.
M. Ohiullah, Advocate-For the Appellant.
Md Aminul Islam, Advocate-For the respondent No.5
Judgment
Quazi Reza-ul-Hoque J: The instant appeal has been preferred against the judgment and decree dated 31-3-1996 passed by the learned Subordinate Judge, 3rd Court, Chittagong, dismissing the Money Suit No.161 of 1994.
2. The facts, in short, as has been stated by the plaintiff in the plaint, inter alia, is that the plaintiff as desponent owner of MS Safir, a ship, sub chartered it to the defendant No.1 under an uniform General Charter dated 24-10-1988 for carriage of 14,700 M/Ts (metric ton) of Bulk TSP (Tri Super Phosphate) to be delivered to BADC (Bangladesh Agricultural Development Corporation), 5% more or less at the owners option at the port of Chittagong, whilst defendant No.3 was the contractor for supply of the cargo and defendant No.4 was the consignee. The cargo was carried on FLOS basis and the ship ‘MS Safir’ arrived at the Port of Chittagong on 1-2-89. The ship was under the control of the charterer’s agent, the defendant No.2, who arranged for discharge of 4,600 M/Ts of the consignment up to 15-2-79 and thereafter under the instructions and insistance of defendant No. 4, the ship was compelled to proceed on to Mongla Port for discharging the balance cargo. In the charter- party agreement it was specifically mentioned that the goods were to be discharged at the Port of Chittagong only. The B/L (Bill of Lading) issued by the defendant No. I, specified the port of discharge as Chittagong. The defendant No.4 without raising any objection whatsoever negotiated the B/L to the voyage. Due to such deviation of the ship from Chittagong to Mongla, the plaintiff has been subjected to extra port charges at Mongla Port and other incidental expenses, and, as such, the plaintiff claimed reimbursement of the port and other incidental expenses incurred by the ship. The plaintiff further claimed demurrage on account of 20 days detention of the ship altogether amounting to Taka 96,28,140 from the defendants. The plaintiff praved for decree for Taka 96,28,140 against the defendants jointly and severally with cost and interest.
3. Defendant No.1 by filing written statement contested suit and alleged that the suit is not maintainable, as much as, the plaintiff had no locus standi to file the suit and there was cause of action in this suit. It contended that the plaintiff was not a party to the charter party agreement. The USTS Inc. was the desponent owner of the vessel ‘MV Safir’ and USTS Inc. entered into a charter party agreement dated 24-10-1998 with the defendant No.1 and that’s why the plaintiff is not entitled to get any relief against the defendant No.1. clause No. XVI of the said charter party agreement provided that the receiver will have the option of three safe berth anchorage at the port of discharge and shifting expenses will be on the owners account. The discharge of cargo was made in accordance with the terms and conditions of the said charter party agreement. It also contained that any dispute arising out of the said charter party agreement shall be referred arbitration as provided in the said charter party, so the present suit is not maintainable without referring the matter to arbitration.
4. Defendant. No.4 contested the suit by filing written statement stating in brief that it had no relation with the plaintiff in any manner and no concern with the defendant No 1. The suit has been filed by defendant No.3 in connivance with defendant No.1 in the name of the plaintiff to defeat the obligation of defendant No.3. Defendant No.4 who is not a party to the alleged sub-charter of the said ship and is not bound by the terms and conditions of the alleged sub charter party. The plaintiff is apparently not a party to the Sub-Charter dated 24-10-88. The Managers of defendant No. 4 at Chittagong and Khulna are the ultimate consignee of the cargo carried by the ship. As per terms of the contract defendant No. 1 and 3 were required to discharge the cargo at Chittagong and Mongla Port at the option of the defendant No.4 for discharging cargo from the said ship, which was controlled and managed by the defendant Nos. 1 and 3, as sub charterer and agent respectively, and not by the defendant No.4. The contract between defendant No.4 on the one hand are defendant Nos. 1 and 3, the later were required to furnish a performance guarantee in favour of defendant No. 4, as security for supply of 14,700 MTs of fertilizer and accordingly they furnished performance guarantee in the form of Bank Guarantee issued by BCCI Ltd, Dhaka Branch. The defendant No.4 is the beneficiary of the said Bank Guarantee and the plaintiff cannot claim any amount against the said performance bond. Defendant No.4 further alleged that the suit is false, fraudulent, collusive and is intended to protect the interest of defendant Nos. 1 and 3 against the possible claim of defendant No.4 against them. The suit is therefore, liable to be dismissed with cost and compensation.
5. Mr M Ohiullah, the learned Advocate for the appellant has began by referring to the decision passed in Government of Bangladesh vs Ekramul Haque, 2 BLC 411 at page 412, wherein it was observed inter alia that:
“It is by now well settled that in spite of an arbitration clause in the contract made between the parties a party may file a suit against the other party and in that case section 34 of the Arbitration Act provides that other party may apply to the Court to stay further proceedings of the suit, but the defendant who wants to take advantage for an arbitration clause must file such an application before submitting to the jurisdiction of the Court by filing his written statement. In this case defendant Bangladesh Railway filed written statement and contested the suit by adducing evidence. Therefore, it is too late to say that the trial Court proceeded with the suit in violating the provision of Section 34 of the Arbitration Act”.
6. As the instant suit falls within the ambit of Arbitration Act, 1940, so, the provisions of Section 38 of the Act shall be applicable, wherein it has clearly embraced that once any of the party had jumped over the provisions of the arbitration than the other party, if feels aggrieved for not invoking the provision of the arbitration should make prayer for arbitration before the trial Court before submission of the written statement, otherwise, it would be deemed to have been waived and in this regard the above judgment has very clearly observed so.
7. He further submitted that since the defendant respondent No.1 was the time charterer of the ship, so its liability, along with the other respondents are co-extensive due to illegal deviation and detention of the ship for 28 days. The respondent No.1 accepted the extension of time chartar vide letter dated 7-12-1988 without any objection, therefore the present appellant-plaintiff has the locus standi to institute the suit. The said letter also very clearly embraced that all the conditions of the C/P (Charter Party) shall remain unaltered, i.e. the defendants remained obliged to the charter party and also to the owner of the ship, i.e. the appellant-plaintiff.
8. He again submitted that since the Charter Party very precisely mentioned that the port of landing be only at Chittagong Port, so taking the ship to another port, i.e. to Mongla Port was beyond the contractual terms as stated in the Charter Party, i.e. taking the ship to Mongla port and detaining it for another 28 days and rearing extra expenses were unjustified and therefore the appeal is liable to be allowed.
9. Mr Md Aminul Islam, the learned Advocate appearing for the respondent No.5 pointed out that none of the evidences were examined and even the claim of the plaintiff itself had not been supported by witness, so the instant appeal is liable to be dismissed.
10. In reply, Mr Ohiullah, the learned Advocate appearing for the appellant took us to the order dated 27-1-1996 of the trial Court tint both the parties agreed to substantiate respective claims and defence through documentary evidences by waiving oral evidence, as such, the claim that evidences were examined through witnesses is not tenable as the learned Judge of the trial Court accepted the same through pleadings of the learned Advocates of both the parties.
11. On perusal of the memo of appeal, the submissions made by the learned Advocate for the appellant and the learned Advocate for the respondent No.5 and the LC record it transpires that the issues are limited to- (1) who were the parties to the contract, therefore the charter party dated 24-10-1998; (2) whether the plaintiff has the locus standi to file the instant suit; and (3) whether the deviation was justifiable.
12. The Charter Party very clearly shows that the contract was entered for charter of the shin in between USTS Inc. Monrovia, Liberia, Sonat Incorporated (the defendant No.1- respondent No.1). The record clearly reveals that Sonat International Inc. corporate received a letter dated December 7,1988 in the following terms :
“This is to confirm that the cancelling date under above charter party has been extended until December 30th 1988. Owners are nominating the ‘MV Safir’ built 1973-Panameniam Flag- 15,251 dWT- Flash Twin decker. All other terms and conditions under above C/P to remain unaltered.”
13. The letter was addressed to the respondent defendant No. I, Sonat later national Inc, so by accepting the extension of the time charter of the ship and the terms of the charter party, they became amenable to the owners of the ship, i.e. World Trade Shipping Corporation, the present appellant-plaintiff, otherwise the whole voyage would have stood illegal due to expiry of the lime charter. So, the appellant-plaintiff has the lows standi ro institute the present suit.
14. The Charter Party clearly reveals that One safe berth Chittagong, Bangladesh where Charterers guarantee 8 meter water draft fresh” and therefore any deviation from a single port entourage without permission or authority of the ship owner is an unjustified deviation as it was beyond the scope of the charter party.
15. As per terms of the Charter Party any dispute was supposed to be referred to an arbitration, which was not done in the instant case. The learned Judge of the trial Court opined that the dispute ought to have been referred to an arbitration as entailed in the charter party. It is now a well settled principle that if any party by disregarding the arbitration claus institutes a suit, the other party must raise objection before filing of the written statement, otherwise that would be deemed as an waiver of the condition as has been decided in Government of Bangladesh vs Ekramul Haque, 2 BLC 411 (ante).
16. From the discussions made hereinabove, we find that the appellant-plaintiff entered into an agreement of charter with the defendant No. 1 and the other respondents entered into contract with respondent No.1. So, the liability to the appellant-plaintiff remains with the respondent No.1. The deviation was also found not justified and the terms of arbitration has been waived by subsequent act of the respondents and therefore we find part merit in the appeal.
17. In the result, the appeal is allowed in part against the defendant respondent No.1 as responsible and liable for the unjustified deviation and the damage of the cause of the plaintiff. Appeal is dismissed against respondent Nos. 2,3, 4 and 5.
The suit is decreed against the defendant respondent No.1.
