Case Note & Summary
The dispute arises from a charter party agreement allegedly entered into between defendant no.1 (Golden Ocean Group Limited, appellant) and defendant no.2 (Trustworth Shipping Pvt. Ltd.). The plaintiff (Salgaocar Mining Industries Pvt. Ltd., respondent no.1) claimed that it had given an oral guarantee for the implementation of that agreement. Defendant no.1 contended that the plaintiff was bound by the arbitration clause contained in the charter party agreement. On 6-2-2010, the plaintiff filed Special Civil Suit No.4/2010/A before the Civil Judge, Senior Division, Panaji, seeking a declaration that there was no contract of guarantee between the plaintiff and defendant no.1, and in any case, no arbitration agreement existed between them. The plaintiff also sought an injunction restraining defendant no.1 from initiating or continuing arbitration proceedings before the arbitrator Mr. Simon Gault in London. The trial court granted an ex-parte ad-interim temporary injunction in terms of prayer clauses (i) and (ii) of para 47(D) of the plaint. Defendant no.1 appealed against that order. The High Court of Bombay at Goa heard the appeal and by consent, admitted and heard it forthwith. The court noted that the plaintiff had made out a prima facie case that there was no arbitration agreement between the plaintiff and defendant no.1, and that the balance of convenience was in favor of granting the injunction to prevent irreparable injury. The court also observed that the trial court had not committed any error in granting the ex-parte injunction. Accordingly, the appeal was dismissed and the ex-parte order was upheld.
Headnote
A) Arbitration Law - Existence of Arbitration Agreement - Prima Facie Case - The court considered whether an arbitration clause in a charter party agreement between defendant no.1 and defendant no.2 could bind the plaintiff who was not a party to that agreement, and who allegedly gave an oral guarantee. The trial court found a prima facie case that there was no arbitration agreement between plaintiff and defendant no.1, and granted injunction restraining arbitration proceedings. (Paras 2-6)
B) Civil Procedure - Ex-Parte Injunction - Conditions for Grant - The court examined whether the trial court had properly applied the principles for grant of ex-parte ad-interim injunction, including existence of prima facie case, balance of convenience, and irreparable injury. The appellate court upheld the injunction, noting that the plaintiff sought to restrain arbitration proceedings which would otherwise proceed in London, causing irreparable harm. (Paras 2-6)
Issue of Consideration
Whether the trial court was justified in granting an ex-parte ad-interim temporary injunction restraining the appellant from initiating or continuing arbitration proceedings against the respondent/plaintiff, in the absence of an arbitration agreement between them.
Final Decision
The appeal is dismissed. The ex-parte order dated 13-4-2010 passed by the learned Civil Judge, Senior Division, Panaji in Special Civil Suit No.4/2010/A is upheld.
Law Points
- Arbitration agreement
- Contract of guarantee
- Ex-parte injunction
- Prima facie case
- Balance of convenience
- Irreparable injury
Case Details
2010 LawText (BOM) (05) 47
Appeal from Order No. 14 of 2010
Shri M. P. S. Rao, Senior Advocate with Kaushik Sochennam and Ms. Jimi John, Advocates for the Appellant; Shri A. N. S. Nadkarni, Senior Advocate with Shri D. Pangam, Advocate for Respondent No.1
Golden Ocean Group Limited
Salgaocar Mining Industries Pvt. Ltd., Trustworth Shipping Pvt. Ltd., Howe Robinson & Co. Ltd.
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Nature of Litigation
Appeal against ex-parte ad-interim temporary injunction granted by trial court restraining arbitration proceedings.
Remedy Sought
Appellant (defendant no.1) sought to set aside the ex-parte injunction order dated 13-4-2010 passed by the Civil Judge, Senior Division, Panaji in Special Civil Suit No.4/2010/A.
Filing Reason
The appellant contended that the trial court erred in granting ex-parte injunction without proper application of mind and that there was an arbitration agreement binding the plaintiff.
Previous Decisions
The trial court granted ex-parte ad-interim temporary injunction on 13-4-2010 in Special Civil Suit No.4/2010/A.
Issues
Whether the trial court was justified in granting ex-parte ad-interim temporary injunction restraining the appellant from initiating or continuing arbitration proceedings against the respondent/plaintiff.
Whether there existed an arbitration agreement between the plaintiff and defendant no.1.
Submissions/Arguments
Appellant argued that there was a charter party agreement between defendant no.1 and defendant no.2, and the plaintiff had given an oral guarantee, thus the arbitration clause in the charter party bound the plaintiff.
Respondent/plaintiff argued that there was no contract of guarantee and no arbitration agreement between plaintiff and defendant no.1, and sought injunction to restrain arbitration proceedings.
Ratio Decidendi
The trial court had correctly found a prima facie case in favor of the plaintiff that there was no arbitration agreement between the plaintiff and defendant no.1. The balance of convenience was in favor of granting the injunction to prevent irreparable injury to the plaintiff, as arbitration proceedings would otherwise proceed in London. The appellate court found no error in the exercise of discretion by the trial court.
Judgment Excerpts
This is defendant no.1's appeal and is directed against ex-parte Order dated 13-4-2010 of the learned Civil Judge, Senior Division, Panaji in Special Civil Suit No.4/2010/A.
The defendant no.1(appellant herein) has set up a case that there was a Charter Party Agreement between defendant no.1 and defendant no.2/Trustworth Shipping Private Ltd. and that the plaintiff had given an oral guarantee for implementation of the said agreement.
On 6-2-2010, the plaintiff filed the said civil suit before the learned Civil Judge, Senior Division, Panaji, inter alia, for a declaration that there was no contract of guarantee as between the plaintiff and defendant no.1 as regards the alleged charter party allegedly negotiated between the defendant no.1 and defendant no.2, and in any case there was no arbitration agreement as between the plaintiff and defendant no.1 either in the alleged contract of guarantee or otherwise.
Procedural History
On 6-2-2010, plaintiff filed Special Civil Suit No.4/2010/A before Civil Judge, Senior Division, Panaji. On 13-4-2010, the trial court granted ex-parte ad-interim temporary injunction. On 7-5-2010, defendant no.1 filed Appeal from Order No. 14 of 2010 before the High Court of Bombay at Goa, which was heard and dismissed by oral judgment.
Acts & Sections
- Code of Civil Procedure, 1908 (CPC): Order 39 Rules 1 and 2
