Case Note & Summary
The judgment concerns two interconnected proceedings: Arbitration Petition No. 446 of 2003 filed by Mitsui OSK Lines Ltd. (petitioner) under Section 45 of the Arbitration and Conciliation Act, 1996 seeking referral of disputes to arbitration, and Suit No. 2570 of 2003 filed by Orient Ship Agency Pvt. Ltd. (respondent) seeking declarations and monetary claims. The parties entered into an agency agreement on 1 April 1964, under which the petitioner appointed the respondent as its agent for shipping business on the Western Coast of India. Article 17 of the agreement contained an arbitration clause providing for settlement of disputes by arbitration in Tokyo. The respondent filed the suit alleging that the agency agreement had come to an end by efflux of time and had been novated/substituted, and sought recovery of various amounts. The petitioner filed the arbitration petition contending that all disputes, including those raised in the suit, were covered by the arbitration clause and should be referred to arbitration. The court examined the scope of the arbitration clause and the nature of the disputes raised in the suit. It held that the arbitration clause was broad enough to cover all disputes arising out of the agreement, including claims of termination and novation. The court rejected the respondent's argument that the arbitration agreement had ceased to exist or was not binding. Consequently, the court allowed the arbitration petition and directed the parties to refer their disputes to arbitration in Tokyo in accordance with Article 17. The suit was disposed of accordingly.
Headnote
A) Arbitration Law - Referral to Arbitration - Section 45 of Arbitration and Conciliation Act, 1996 - Agency Agreement - Disputes regarding termination and novation of agency agreement - Court held that the arbitration clause in Article 17 of the agency agreement covers all disputes arising out of the agreement, including claims of termination and novation, and directed referral to arbitration in Tokyo (Paras 1-22).
Issue of Consideration
Whether the disputes raised in the suit are covered by the arbitration agreement contained in Article 17 of the agency agreement dated 01/04/1964 and whether the parties should be referred to arbitration under Section 45 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court allowed the arbitration petition and directed the parties to refer their disputes to arbitration in Tokyo in accordance with Article 17 of the agency agreement. The suit was disposed of accordingly.
Law Points
- Section 45 of Arbitration and Conciliation Act
- 1996
- arbitration clause
- referral to arbitration
- novation of contract
- termination of contract
- scope of arbitration agreement
