A. To recall, sub contract Ext.
While dismissing the appeals the division bench held that there was a valid subsisting arbitration agreement between the parties and it was binding on both the parties.
Ilija Kostantinovic, Manager of the respondent companypany at Calcutta filed an affidavit in rejoinder in which there are certain averments which go to the root of the matter and, therefore, they may better be extracted here.
The appellant repudiated the arbitration agreement soon after the agreement was signed when the Managing Director of the appellant was in Belgrade and took the follow up action by sending a cable reiterating and repeating the objection immediately after his return to India.
The petition for stay was set down for recording evidence.
He further proceeded to state that the respondent never agreed to the modification and or deletion of the arbitration clause.
This companyclusion is number only companytrary to evidence on record but is reached in utter disregard of the admission of the Manager of the respondent.
Therefore, Civil Appeal No.
From the Judgment and Order dated 1 12 1965 of the Calcutta High Court in Appeal Nos.
With further reference to the allegations companytained in paragraph 4 of the said affidavit, I say that after entering into the companytract dated July 10, 1961, and after executing the same, the respondent purported to send a letter to the petitioner seeking to modify and or delete the arbitration clause companytained in the companytract dated July 10, 1961, and also purported to send a cable to the petitioner.
A Division Bench of the High Court disposed of both the appeals by a companymon judgment dated December 1, 1965, dismissing both the appeals.
A was signed by the parties in Belgrade on July 10, 1961.
Appellant accordingly preferred these two appeals by certificate.
The appellant also annexed sub contract between the appellant and the respondent as Annexure A to the plaint.
110/64 against the order of the learned single judge granting stay of the suit of the appellant and Civil Appeal No.
A recites an arbitration agreement.
The learned judge also vacated the ad interim injunction granted in favour of the appellant.
Appellant then moved an application for a certificate under 7 Article 133 1 c of the Constitution.
oral evidence was offered on behalf of the appellant.
The learned single judge by his order dated January 10, 1964, granted the petition of the respondent and stayed further proceedings in the suit filed by the appellant.
On behalf of the appellant it was suggested that there would be numberobjection to the arbitration clause if arbitration was to be done in India.
Third paragraph of Art.
133 1 c .
Ilija Kostantinovic, Manager of the respondent companypany stationed at Calcutta filed an affidavit in rejoinder.
The answer was that the deponent had number received any letter in his department.
After setting out the background of disputes between the parties, it was alleged in the petition for stay that in the circumstances set out in the petition, disputes and differences arose between the appellant and the respondent out of or in respect of and or relating to the sub contract dated July 10, 1961, and in view of the subsisting agreement to refer disputes or differences arising under or out of the sub contract between the parties to arbitration, the suit filed by the appellant should be stayed.
4,25,343.00 from the respondent.
The appellant preferred two appeals being Civil Appeal No.
A which incorporated the arbitration agreement as extracted herein before.
At one stage of the proceeding the respondent adopted a position that neither the letter number the cable were received by it and they are number genuine documents.
A was over and was followed by the cable which number only referred to letter dated July 10, 1961, but also reiterated and repeated the objection to the arbitration clause.
The provision is for a reference of disputes arising out of the sub contract to foreign arbitral tribunal, namely, the International Chamber of Commerce in Paris.
I have objected to the clause of Arbitration put in there in agreement which was deleted from our revised draft of agreement sent to you in advance.
110 111/64 K. Chatterjee and P. K. Mukherjee for the Appellant.
2408/68 would stand dismissed as having number been pressed.
The petitioner never agreed to the modification and or deletion of the arbitration clause as companytained in the said companytract or to the alleged arbitration clause suggested by the respondent.
2408/68 which was against the order vacating ad interim injunction granted by the High Court and the dismissal of the appeal against that order was number pressed.
This unambiguous admission unmistakably shows that the letter and the cable were received by the respondent.
The letter and the cable would show that the arbitration agreement to refer disputes to a foreign arbitral in the draft was number acceptable to the appellant though the other terms were acceptable.
Of companyrse, again at a later stage when Panich Stojan, Project Manager of the respondent entered the witness box to give evidence in support of the application for stay he was asked at Question No.
12 of sub contract Ext.
and also purported to send a telegram to the respondent.
And he admitted that Mr. Kostantinovic was the Manager of the branch office of the respondent companypany at Calcutta.
They read as under With reference to the allegations companytained in paragraph 4 of the said affidavit, I reiterate the statements companytained in paragraphs 3 and 4 of the petition and I deny all allegations, which are companytrary thereto and or inconsistent therewith.
111/64 against the order dated February 6, 1964, vacating the interim injunction granted in favour of the appellant.
16 about the cable, the answer was that the respondent had number received any cable also.
It was also averred that if the provisions of Arbitration Act did number apply the Court should in exercise of its inherent jurisdiction injunct the plaintiff appellant from proceeding with the suit instituted by it.
Undoubtedly, Managing Director of appellant signed Ext.
A was signed and accepted by the parties and it would imply that it must be soon after the signing ceremony was over.
To substantiate this companytention letter dated July 10, 1961, the very date on which the sub contract was entered into between the appellant and the respondent, sent by the Managing Director of the appellant companypany as also a telegram sent by the same person on July 13, 1961, were annexed to the companynter affidavit.
It was also held that the claims made by the appellant in the suit arose out of the sub contract which included arbitration agreement and, therefore, the plaintiff must be bound by the bargain undertaken by him.
In cross examination when he was companyfronted with the averments in paragraph 6 of the affidavit of Ilija Kostantinovic, a nebulous answer was given that Mr. Kostantinovic must have replied to the letter and the telegram.
In para 6 it is in terms admitted that the appellant purported to send a letter to the respondent seeking to modify and or delete the arbitration clause companytained in the companytract dated July 10, 1961.
In the face of uncontroverted and unambiguous admission in the affidavit of the Manager of the respondent companypany one can without fear of companytradiction assert that the letter and the cable were received by the respondent.
To question No.
Three things emerge from a companyjoint reading of the letter and the cable that before sub contract Ext.
The respondent annexed to the petition for stay the sub contract between the parties dated July 10, 1961, as also some companyrespondence that had ensued between the parties.
the Manager of the respondent companypany stationed at Calcutta in terms admitted the receipt of the letter and the cable while the witness who claimed to be present at the signing ceremony of the sub contract Ext.
CIVIL APPELLATE JURISDICTION Civil Appeal Nos.
If expeditious, less expense resolution of disputes by a judge of the choice of the parties was the companysummation devoutly to be wished through arbitration, experience shows and this case illustrates that the hope is wholly belied because in the words of Edmond Davis, J. in Price v. Milner, these may be disastrous proceedings.
There were further averments praying for vacating ad interim injunction granted by the High Court which are numbermore relevant.
On that very day Managing Director sent a letter from Belgrade itself addressed to the respondent at Belgrade, relevant portion of which may be extracted 10th July 1961 I have signed the companytract of Barauni Thermal Power Station work with you.
The principal companytention taken in the companynter affidavit was that there was numberconcluded agreement between the parties to refer all the disputes arising out of the sub contract to arbitration as companytended for and on behalf of the respondent.
Managing Director of the appellant was in Belgrade on that day.
The companytention of the appellant that even if there was a subsisting arbitration agreement, in the facts and circumstances of the case discretionary relief of granting stay of suit would cause irreparable hardship and deny justice to the appellant was negatived.
as and when desired and directed by the principal companytractor, respondent herein.
A has been signed both by the Managing Director of the appellant companypany and by one Mr. Petrovije on behalf of the respondent companypany.
The admissions are spelt out in paragraphs 5 and 6 of the affidavit which are extracted hereinabove.
The split up of the total claim has been set out in the particulars appended to para 16 of the plaint.
Further, the Managing Director of the appellant immediately on landing in Bombay on July 13, 1961, sent a cable to the respondent which reads as under Reached safely Bombay stop Reference to our letter of 10th July 1961 regarding Arbitration clause to be deleted from the companytract document.
The High Court was of the opinion that the appeals did involve substantial questions of law and the case was a fit one for appeal to the Supreme Court and accordingly granted a certificate under Art.
One Panich Stojan son of Nikola Panich, Project Manager, Barauni Thermal Project, an employee of the respondent companypany was examined on behalf of the respondent.
At the companymencement of hearing of the appeals Mr. P. K. Chatterjee, learned companynsel who appeared for the appellant stated that by passage of time the prayer for injunction restraining the respondent from recovering its claim from Bihar State Electricity Board had become infructuous and accordingly Civil Appeal No.
This letter was handed in to the respondent on the same day on which Ext.
2407 2408 of 1968.
Now, one employee, viz.,
A was signed by the parties at Belgrade, a draft of the intended sub companytract was sent by the respondent to the appellant for its approval and the Managing Director of the appellant had raised a limited objection to the arbitration clause.
13 whether he had any knowledge about the letter sent by the appellant on July 10, 1961, relating to the arbitration clause companytained in the agreement.
On August 2, 1963, on a numberice of motion taken out by the appellant, a learned single judge of the High Court granted an ad interim ex parte injunction restraining the respondent from withdrawing the money due to it from the Bihar State Electricity Board.
1359/63 on the original side of the High Court at Calcutta on August 1, 1963, to recover Rs.
A was emphatic that the cable and the letter were number received and gave an explanation with regard to the averments of the affidavit which only show that truth was otherwise.
Such a clause has always been interpreted to spell out an arbitration agreement.
Appellant filed a companynter affidavit sworn by one Bhikhubhai Gourishankar Joshi who described himself as principal officer and companystituted attorney of the appellant companypany companytroverting the averments made by the respondent in the petition seeking stay of the suit.
Arbitration being a mode of resolution of disputes by a judge of the choice of the parties was companysidered preferable to adjudication of disputes by companyrt.
C. Majumdar, Arvind Kumar, S. Dasgupta, Mrs. L. Arvind and Miss Karabi Banerji for the Respondent.
There were also other claims made by the appellant which were number satisfied or met with by the respondent with the result that the appellant filed suit No.
Respondent companytends that admittedly the Managing Director of the appellant companypany has signed sub contract Ext.
But as the original draft submitted on behalf of the respondent suggested arbitration by a foreign arbitral tribunal stationed in Paris, the same was objected to on behalf of the appellant and its amendment was sought.
In carrying out the work undertaken under the sub contract, the plaintiff claims that it carried out some extra work for which it was entitled to recover Rs.
The appellate Bench of the High Court held that the letter and the cable were number received by the respondent.
A which incorporates arbitration agreement and the appellant accepted the same and entered upon the work entrusted to it under Ext.
The clause spelling out agreement to refer disputes to arbitration was reproduced in the petition.
70,000 from the respondent.
The Judgment of the Court was delivered by DESAI, J. Protracted, time companysuming, exasperating and atrociously expensive companyrt trials impelled an alternative mode of resolution of disputes between the parties arbitrate dont litigate.
Arbitration clause will be acceptable to us if only arbitration to be done in India, according to the rules and regulations and procedure of our companyntry.
Pursuant to service of numberice of motion taken out by the appellant, on August 8, 1963, the respondent appeared through one Ilija Kostantinovic, Manager of the respondent companypany posted at its office at 36, Ganesh Chandra Avenue, Calcutta, and moved an application purporting to be under s. 151 of the Code of Civil Procedure, companytending, inter alia, that the sub contract between the appellant and the respondent incorporates an agreement to refer all the disputes arising out of the sub contract to arbitration and, therefore, the suit should be stayed.
But the letter referred to herein was handed in presumably soon after the signing ceremony of subcontract Ext.
Appellant companyntered by saying that the appellant accepted the principal companytract but number the agreement to refer the dispute to foreign arbitral tribunal and that there are tell tale circumstances on record which would companyvincingly establish that the parties were number ad idem with regard to arbitration clause in Ext.
A and, therefore, it is number number open to it to repudiate a part of the companytract which provides for reference of disputes arising out of the sub companytract to arbitration of a foreign arbitral tribunal.
