Calcutta High Court
R. Piyarelall Import & Export Limited vs Glencore Grain B. V on 25 April, 2011
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
1
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
(Original Side)
Present:
The Hon'ble Mr. Justice Bhaskar Bhattacharya
And
The Hon'ble Mr. Justice Sambuddha Chakrabarti
A.P.O.T. No.611 of 2010
C.S. No.173 of 2009
R. Piyarelall Import & Export Limited
Versus
Glencore Grain B. V.
For the Appellant: Mr. A. K. Mitra,
Mr. S. N. Mookherjee,
Mr. B. Basak,
Mr. R. Banerjee,
Ms. Pooja Roychowdhury.
For the Respondent: Mr. S. K. Kapoor,
Mr. Ranjan Deb,
Mrs. Mousumi Bhattacharya,
Mr. T. Aich,
Mrs. Ravela D'Sauza.
Heard on. 24.03.2011
Judgment on: 25th April, 2011.
Bhaskar Bhattacharya, J.:
This appeal is at the instance of a plaintiff in a suit for declaration and injunction and is directed against an order dated 6th October, 2010 passed by a learned Single Judge of this Court by which the learned Single Judge dismissed 2 an application for interlocutory injunction after vacating the interim order earlier passed by the Court.
Being dissatisfied, the plaintiff has come up with the present appeal. The appellant before us filed in the Original Side of this Court a suit being C.S. No.173 of 2009 and thereby praying for the following reliefs:
"a) Decree for declaration that there is no contract dated 10th June, 2008 or 17th April, 2008 between the plaintiff and the defendant as claimed by the defendant;
b) Decree for delivery up and cancellation of the alleged contracts dated 10th June, 2008 and 17th April, 2008 and the same be adjudged as null and void;
c) A decree for declaration that there is no arbitration agreement as claimed by the defendant;
d) A decree for declaration that the defendant is not entitled to proceed in arbitration as against the plaintiff;
e) A decree for perpetual injunction restraining the defendant from proceeding any further with arbitration or from taking any further steps on the basis of the notice dated 16th June, 2009; 3
f) A decree for perpetual injunction restraining the defendant from proceeding in arbitration as against the plaintiff before the Grain & Feed Trade Association;
g) A decree for perpetual injunction restraining the defendant from taking any steps or any further steps on the basis of the alleged contract dated 10th June, 2008 and 17th April, 2008;
h) A decree for perpetual injunction restraining the defendant from taking any steps or any further steps on the basis of the purported claim for arbitration as against the plaintiff;
i) Attachment before judgment;
j) Receiver;
k) Injunction;
l) Costs;
m) Further and other reliefs;"
The case made out by the plaintiff in the plaint may be summed up thus:
a) The plaintiff carries on business as dealer of peas and pulses and the defendant is an exporter of French Yellow Peas. In the usual course 4 of business, the plaintiff had entered into an agreement dated 19th May, 2008 with the State Trading Corporation of India Limited (STC) for the purpose of purchase of a quantity of 21,500 M.Ts, 5% more or less, of French Yellow Peas. Such contract was made pursuant to a prior contract entered into between STC and the defendant on 17th April, 2008 for the purpose of purchase of 21,500 M.Ts, 5% more or less, of French Yellow Peas in bulk to be sold by the defendant to the STC.
b) The contract dated 19th May, 2008 was entered into between the plaintiff and the STC at the office of the STC at 11, R.N. Mukherjee Road, Kolkata, within the jurisdiction of this Court. The contract of 17th April, 2008 was accepted by the STC at its office at 11, R. N. Mukherjee Road, Kolkata.
c) Under the contract dated 19th May, 2008, it was agreed by and between the plaintiff and the STC that the goods should be sold on high sea sale basis by the STC to the plaintiff and any claim as regards the quality or quantity was to be lodged and pursued by the STC at the cost of the plaintiff and the claim proceeds were to be reimbursed to the plaintiff and no claim would lie against the STC by reason of any claim as regards the quality or quantity of the goods.
d) According to the plaintiff, the STC in performance of the terms of the contract dated 17th April, 2008 opened a letter of credit on 22nd May, 5 2008 and the defendant, from time to time, shipped several quantities of French Yellow Peas in bulk in the containers on diverse dates, the particulars of such shipment, was specifically stated in the plaint.
e) 18,106.698 M.Ts of goods in seven consignments were shipped from the port of Rouen, France, for carriage to Navaseva and the said goods were discharged at the Port of Navaseva. The defendant obtained payment for the entire quantity of 18,106.698 M.Ts of French Yellow Peas by the operation of the letters of credit and by presenting documents as required.
f) In terms of the said contract, the defendant was under a duty and obligation to supply French Yellow Peas of the quality as had been agreed and under the aforesaid agreement, seven consignments which were shipped, a total of 18,106.698 M.Ts of French Yellow Peas had been shipped by the defendant and those goods have been received by the plaintiff under the contract dated 19th May, 2008.
g) Upon arrival of the first consignment on 26th July, 2008, the plaintiff at the time of de-stuffing the first container, became apprehensive that the quality was not as per the specification of the contract and the surveyor was appointed for survey of the consignment and from the survey report submitted by the surveyor, it was evident that the 6 quality of the goods shipped by the defendant was not in accordance with contractual specifications.
h) The fact that those goods were not in accordance with the contractual specifications was intimated to the defendant through the broker and the defendant expressly accepted the appointment of SGS India to survey the goods at the discharge port.
i) From the report of SGS India, it appeared that out of seven consignments only one consignment covered by the Bill of Lading was within the contractual specifications and the remaining six consignments were not in accordance with the contractual specifications.
j) Out of the quantity of 16084.982 M.Ts of French Yellow Peas covered by the six consignments, the plaintiff with great effort has only been able to sell 19.920 M.Ts of the goods at a lower price of 18,410/- per M.Ts and the goods under the aforesaid six consignments were of un-merchantable quality and by reason thereof, the plaintiff had suffered loss and damages being the price paid for the entire balance quantity of 16084.982 M.Ts French Yellow Peas. The expenses incurred by the plaintiff for the said goods is US$1156460.65 which is equivalent to Indian Rs.47,41,53,190/- at the prevailing exchange rate.7
k) By reason of the breach of the terms of the contract by the defendant, the plaintiff had suffered loss and damages for the sum of Rs.47,41,53,190/-.
l) The plaintiff on 16th June, 2009 received a notice from the defendant at its office at 12, Government Place (East), Kolkata to a claim for arbitration and in the said notice, there is reference to an alleged contract dated 10th June, 2008 allegedly replacing another alleged contract dated 17th April, 2008. By the said notice, the defendant has informed the plaintiff that they were claiming arbitration in accordance with the rule of Grain & Feed Association in respect of the alleged contract dated 10th June, 2008 for the same of 21,000 M.Ts, 5% more or less, of French Yellow Peas and one Mr. Libre has been appointed as Arbitrator by the defendant.
m) There is no contract dated 10th June, 2008 between the plaintiff and the defendant and there is a contract dated 17th April, 2008 between STC and the defendant for the sale of 21,500 M.Ts, 5% more or less, of French Yellow Peas pursuant to which 18106.698 M.Ts of French Yellow Peas have been shipped and payment has been obtained under the said letter of credit for such quantities.
n) There is no agreement dated 10th June, 2008 between the parties as alleged and no goods have been shipped into India pursuant to any contract between the plaintiff and the defendant and claim for 8 arbitration in the notice dated 16th June, 2009 is illegal, null and void.
o) On the basis of the aforesaid notice dated 16th June, 2009, on 18th June, 2009 and 19th June, 2009, the defendant has by various e-
mails of the abovementioned dates sought to serve on the plaintiff a copy of an application for obtaining order of injunction along with other documents in connection with the arbitration proceedings. Subsequent to serving such documents, an order of injunction has been obtained on 19th June, 2009 to restrain the plaintiff from proceeding with C.S. No.151 of 2009 except for the purpose of obtaining security for any claim.
p) The proceeding initiated by the defendant is an afterthought and has been filed with mala fide intention and is a counter-blast to the suit of the plaintiff. The defendant has no cause to go to arbitration as there is no contract or contract of arbitration between the plaintiff and defendant in which any French Yellow Peas have been shipped to India. The only subsisting contract is the contract dated 17th April, 2008 between the defendant and STC. The defendant is threatening to plaintiff with malicious proceeding by way of arbitration. Hence the suit.
9On the basis of the abovementioned averments made in the suit, the plaintiff filed an application before the learned Single Judge praying for an order of injunction restraining the defendant from taking any steps and/or further steps on the basis of notice dated 16th June, 2009 and from proceeding with arbitration on the basis of the alleged contract dated 10th June, 2008 or 17th April, 2008.
A learned Single Judge of this Court on such application initially on 7th July, 2009 passed an interim order for six weeks which was extended from time to time and thereby restraining the defendant, its servants and agents from proceeding with the arbitration against the plaintiff in any manner.
The defendant entered appearance and filed affidavit-in-opposition to the aforesaid application for injunction and the defence taken by the defendant may be summed up thus:
a) The defendant was approached by a broker, namely, H.S. Global stating that the plaintiff was desirous of purchasing French Yellow Peas. There were three contracts between the plaintiff and the defendant, being contract No.623507 dated 14th March, 2008, contract No.623579 dated 14th March, 2008 and contract No.624202 dated 11th April, 2008. Those contracts were entered into between the plaintiff and the defendant and those contracts were subsequently cancelled and replaced by a contract bearing 10 No.624330 dated 17th April, 2008 between the plaintiff and the defendant.
b) Prior to the execution of the contract dated 17th April, 2008, e-mails were exchanged between the parties or the said H.S. Global as regards the terms of the contract. By an e-mail dated 15th April, 2008, the defendant forwarded to H.S. Global a draft of the proposed contract. The reference to "RPI" in the subject was a reference to the plaintiff. By en e-mail dated 17th April, 2008, H.S. Global wrote to the defendant and suggested certain changes in the contract to be entered into. H.S. Global requested the defendant to make these changes and to forward the signed contract to enable them to get it countersigned by "RP", which was a reference to the plaintiff.
Accordingly, the changes were incorporated and the contract was forwarded to the plaintiff for its counter signature. By an e-mail dated 23rd April, 2008, H.S. Global forwarded to the defendant the contract countersigned by the plaintiff and it was stated in the e-mail that LC and import permit would follow soon.
c) By another e-mail dated 17th April, 2008, H.S. Global wrote to the defendant and on behalf of the plaintiff nominated a vessel for shipment under the said contract No.624330 dated 17th April, 2008. Further e-mail dated 2nd May, 2008, 5th May, 2008 and 13th May, 2008 were exchanged between the defendant and the plaintiff and/or 11 H.S. Global and Sidharth Agarwal of the plaintiff. It is apparent from the said correspondence that the defendant was dealing only with the plaintiff and the broker H.S. Global. It was the plaintiff who was nominating the vessels.
d) The plaintiff and H.S. Global on their behalf informed the defendant that the plaintiff needed to fund the purchase under the contract and that it had approached the STC, a large State body, to provide finance to the plaintiff and M/s. H.S. Global informed the defendant that in accordance with the finance arrangement, the letter of credit would be opened by the STC.
e) However, all discussions even as regards the opening of the letter of credit and the terms of the letter of credit were discussed and negotiated by the defendant with H.S. Global and the plaintiff. The aforesaid fact would be apparent from the e-mail dated 15th May, 2008 addressed by Mr. Subrata Ganguly of the plaintiff to KBC Bank, e-mail dated 15th May, 2008 addressed by H.S. Global to the plaintiff, e-mail dated 22nd May, 2008 addressed by the plaintiff's representative to H.S. Global and also the e-mail dated 23rd May, 2008 addressed by H.S. Global to the defendant.
f) Therefore, it is apparent that even the opening of the letter of credit in the name of the STC was being pursued and followed by the plaintiff who had a contract with the defendant. It is further 12 apparent that even as regards the opening of the letter of credit, the defendant did not deal with the STC and had dealt only with the plaintiff and/or H.S. Global. Accordingly, a letter of credit was opened by Vijaya Bank on 22nd May, 2008 and the letter of credit stated that the applicant was the STC. The letter of credit by the STC was represented to the defendant to be some financing arrangement between the STC and the plaintiff and documents including invoice were accordingly made.
g) In view of the fact that the rates in the freight market were at that point of time very high, the plaintiff found it difficult to nominate a vessel. At that request of the plaintiff made through H.S. Global, the shipment period was extended till 15th June, 2008 and such fact was recorded by H.G. Global by e-mail dated 28th May, 2008. In the said e-mail, it was clearly acknowledged that the extension of time was due to the failure on the part of the plaintiff to nominate the vessel and the plaintiff was trying their best to book the freight for loading the cargo. H.S. Global even sought a confirmation as to whether the letter of credit was in order.
h) By an e-mail dated 4th June, 2008, H.S. Global once again referring to the plaintiff as the buyer forwarded a copy of the import permit in the name of the STC and the defendant was given to understand that the goods were being imported in the name of the STC, as a result of 13 certain internal arrangement inter se between the plaintiff and the STC.
i) In or about June, 2008, the plaintiff and the defendant agreed to alter the shipment permit to CNF from the original FOB. The defendant addressed a letter dated 6th June, 2008 to the plaintiff suggesting that the shipment should be made in containers at a price of US Dollars 565.70 PMT CNF Nhava-Sheva. The defendant requested the plaintiff to confirm the same and make necessary amendments to the letter of credit so as to enable the defendant to prepare for the shipment. Such proposal was accepted by the plaintiff. In the meantime, it was also agreed that the shipment period should be extended till 31st August, 2008.
j) By e-mail dated 27th August, 2008, the defendant forwarded details of shipment made with a request to forward the same to the buyers. Similar advice was also forwarded on 9th September, 2008. The cargo was shipped in total of 8(eight) different consignments. The first 7(seven) consignments of cargo were shipped as original agreed to Nhava-Sheva (a total of 18,106,698 MT) and the last consignment was shipped to Kolkata (3,340,495 MT).
k) As per the contract, the quality and conditions of the goods were to be final at loading port as per the certificate issued by the SGS for seller's account and accordingly, the defendant fulfilled the quality 14 requirement and the quality and conditions were certified by the SGS.
l) On 8th July, 2008, 28th July, 2008, 6th August, 2008, 8th August, 2008, 15th August, 2008, 26th August, 2008, 8th September, 2008 and 16th September, 2008, the defendant presented documents under the letter of credit to Deutsche Bank and received payment in the aggregate sum of US Dollars 12,132,677.07 under the letter of credit opened under the aforesaid contract dated 10th June, 2008.
m) In or about the beginning of September, 2008, certain issues were raised as regards the quality of the goods supplied. By e-mails dated 8th September, 2008 and 9th September, 2008, H.S. Global alleged that the plaintiff had got the goods inspected by the SGS in India. It was sought to be alleged that the SGS's survey in India was pursuant to a mutual understanding between the plaintiff and the defendant and it was alleged that as per the SGS's survey done in India, the goods were not as per the quality which was agreed.
n) By e-mail dated 10th September, 2008, the defendant replied to the same and raised objections to the e-mail. It was denied that there was any mutual agreement to arrange for quality survey in India. The defendant clarified that though the receivers had a right to have a surveyor appointed at the place of discharge, the same did not in any manner alter the contract conditions which provided that the 15 quality would remain final at the time of loading as per the SGS survey. It was clarified that the different in the result between the Load Port and the Destination Analysis could be caused by numerous elements including extra-manipulation of the commodity, different sampling methods, different analysis methods, different definition of quality elements, etc.
o) The defendant confirmed that the quality conformed to the contract agreement. By e-mail dated 10th September, 2008, H.S. Global responded to the said e-mail and made various allegations. From the said e-mail also it is apparent that the contract had always been between the defendant and the plaintiff and never between the defendant and STC.
p) By a letter dated 11th November, 2008, the plaintiff wrote to the defendant and stated that 150 containers were yet to arrive at Kolkata. It was alleged that the import permit was valid only up to 22nd October, 2008 and that the consignment would arrive after the expiry of the import licence and as a result, was likely to be re- exported and/or destroyed by the authorities. The plaintiff sought refund of all the moneys which had been recovered under the letter of credit.
q) It was apparent that even at that stage, it was the plaintiff who was directly dealing with the defendant. By an e-mail dated 20th 16 November, 2008, the defendant responded to the said allegation and pointed out that the import licence for the goods shipped into India were the responsibility of the buyers and the defendant cannot in any manner hold responsible for the same. The defendant confirmed that the defendant had shipped all the goods between the contractual shipment period and was not in any manner liable for the same.
r) On 23rd December, 2008, the STC and the plaintiff filed a suit, being C.S. No.266 of 2008 in this Court, inter alia, seeking for a perpetual injunction restraining the Vijaya Bank from making any payment under one of the letters of credit. The said suit was filed on a false basis that contract dated 17th April, 2008 was allegedly entered into between the defendant and the STC.
s) On 22nd May, 2009, the plaintiff and the STC filed another suit being C.S. No.151 of 2009 in this Court claiming damages, inter alia, on the ground that the cargo shipped by the defendant was of un- merchantable quality. The said suit was also on the alleged basis that it was the STC who had entered into the contract allegedly dated 17th April, 2008.
t) In those two suits, the plaintiff and the STC accepted that the contract contained an arbitration clause and it was alleged that the arbitration agreement had become incapable of being performed in 17 the facts and circumstances and the plaintiff was not able to proceed with the arbitration in respect of the subject-matter of the said suit. u) On 16th June, 2009, the defendant addressed a notice to the plaintiff and commenced the arbitration proceedings against the plaintiff under contract No.624330 dated 10th June, 2008 pursuant to the arbitration clause contained therein which provided for arbitration in accordance with the Arbitration Rules of GAFTA in London and appointed Mrs. Libre as one of the Arbitrators.
v) By another notice dated 16th June, 2009 addressed to STC the defendant commenced arbitration against the STC under the alleged contract dated 17th April, 2008 without prejudice to its contentions that the defendant had never entered into any such contract. It was contended by the defendant that without prejudice to their contentions that they never entered into any contract with the STC, if the STC sought to rely upon the alleged contract, it must bring the claim in arbitration as per arbitration clause contained therein. w) Despite commencement of the arbitration proceedings, the plaintiff and the STC wrongfully continued to pursue the said two suits and the interim proceedings therein. In these circumstances, the defendant's lawyers, the United Kingdom addressed a letter to the plaintiff and called upon the plaintiff to discontinue the proceedings in Court. The plaintiff was put to notice that if the said proceedings 18 were continued they were instructed to apply to the Court in England to obtain an anti-suit injunction against the plaintiff in order to restrain the Indian proceedings. Despite the same, the plaintiff and the STC persisted with the proceedings in this Court and in these circumstances, the defendant filed proceedings before the High Court of Justice, Queens Bench Division, Commercial Court in U.K. seeking a restraint order, inter alia, restraining the plaintiff and STC from proceeding with or taking any steps in respect of the proceedings in this Court since the defendant had already invoked the arbitration.
x) On 18th June, 2009, the Court in U.K. passed an order of injunction against the plaintiff and STC.
y) In spite of notice of the order, the plaintiff is still proceeding to apply for interim relief and after the order of the Court in U.K. was pointed out to this Court, Dipankar Datta, J. adjourned the matter to 23rd June, 2009.
z) On 23rd June, 2009, the defendant filed an affidavit in C.S. No.151 of 2009 and pointed out the order of the U.K. Court and on the very same day, the plaintiff filed the present suit alleging that there was no contract between the plaintiff and the defendant as asserted and that the claim for arbitration in notice dated 16th June, 2009 is illegal, null and void.
19As pointed out earlier, the learned Single Judge by the order impugned herein has vacated the interim order earlier granted and has dismissed the application for injunction.
Being dissatisfied, the plaintiff has come up with the present appeal. Mr. Mitra, the learned senior Advocate appearing on behalf of the appellant, has laboriously contended before us that the learned Single Judge in rejecting the application for injunction misread the materials on record and erroneously arrived at the conclusion that the plaintiff had failed to establish a strong prima facie case. Mr. Mitra contends that his client has produced sufficient materials to prove that there existed no agreement between the parties dated April 17, 1998 or June 10, 1998 between the parties and the so called agreement between the parties put forward by the defendant was an outcome of fraud. Mr. Mitra submits that the question of fraud can be effectively decided only by a civil court and thus, it is a fit case where during the pendency of the suit filed by his client, the defendant should be restrained from proceeding with the arbitral proceedings. Mr. Mitra, therefore, prays for setting aide of the order passed by the learned Single Judge and for restoration of the interim order earlier granted in the suit.
20
Mr. Kapoor, the learned senior Advocate appearing on behalf of the respondent, has on the other hand, opposed the aforesaid contentions of Mr. Mitra and by reference to the various letters written on behalf of the appellant addressed to his client and sent through e-mail contended that it has been well established that the plaintiff was very much party to the agreements between the parties dated April 17, 2008 and June 10, 2008 and thus, has filed the suit with a mala fide intention to avoid the clause of arbitration and the learned Single Judge in the facts of the present case rightly dismissed the application for injunction after being satisfied that there was no prima facie case of the plaintiff. Mr. Kapoor contends that no particular of the alleged fraud has been disclosed by the plaintiff and as such, the learned Single Judge was quite justified in vacating the interim order earlier obtained by the plaintiff on suppression of material fact. Mr. Kapoor, thus, prays for dismissal of this appeal.
Therefore, the only question that arises for determination in this appeal is whether the learned Single Judge in the facts of the present case rightly exercised better discretion in dismissing the application for injunction.
Before entering into merit, we should keep in mind the scope of investigation at the instance of an appellate Court dealing with an appeal against a discretionary order like temporary injunction, appointment of receiver etc. It is now settled law that in such an appeal, the Appellate Court generally does not interfere with the discretion exercised by the Trial Court unless it appears that while exercising such discretion, the learned Trial Judge has wrongly applied the 21 principles for grant of such discretion or unless it is established that such discretion has been unreasonably or capriciously exercised. In dealing with such an appeal, the appellate Court would not be justified in interfering with the discretion under the appeal solely on the ground that if it considered the matter at the trial stage, it might have come to a contrary conclusion (See Uttar Pradesh Co-operative Federation Ltd. Vs. Sunder Bros. Delhi reported in AIR 1967 SC
249). In a subsequent case of Manjunath Anandappa Urf Shivappa Hansi Vs. Tammanasa and others, reported in AIR 2003 SC 1391, the Apex Court reiterated the aforesaid principles which are required to be followed while hearing an appeal against a discretionary order by observing that "an appellate power interferes not when the order appealed is not right but only when it is clearly wrong. The difference is real, though fine."
In the case before us, after going through the materials on record we are prima facie convinced that there existed agreements between the parties dated April 17, 2008 and June 10, 2008 as would appear from various letters written on behalf of the parties through e-mail. Although Mr. Mitra, tried to convince us that the letters alleged to have been sent by e-mail did not contain the usual seal of his client, we are not at all impressed by such submission. For the purpose of verifying the aforesaid allegation, we directed the respondent to produce the original copy of the e-mail and the same was produced before us. We find from other admitted letters sent by the appellant through e-mail copy of which are annexed to the affidavits of the parties that the appellant used various types of 22 its official seals in different communications and thus, there is no reason to prima facie disbelieve the existence of the agreement between the parties dated June 10, 2008 by describing the same as a manufactured one.
From the huge number of communications between the parties coupled with various steps taken by the parties, we are of the view that the learned Single Judge rightly held that there is no prima facie case of the appellant. It is impossible to even prima facie believe that the goods were supplied to the plaintiff pursuant to the agreement between the STC and the defendant and that there was no agreement between the parties.
It appears from record that at the request of the plaintiff made through H.S. Global, the shipment period was extended till 15th June, 2008 and such fact was recorded by H.G. Global by e-mail dated 28th May, 2008. In the said e-mail, it was clearly acknowledged that the extension of time was due to the failure on the part of the plaintiff to nominate the vessel and the plaintiff was trying their best to book the freight for loading the cargo. H.S. Global even sought a confirmation as to whether the letter of credit was in order. By an e-mail dated 4th June, 2008, H.S. Global once again referring to the plaintiff as the buyer forwarded a copy of the import permit in the name of the STC and the defendant was given to understand that the goods were being imported in the name of the STC, as a result of certain internal arrangement inter se between the plaintiff and the STC.
23
It further appears from record that the plaintiff and the defendant agreed to alter the shipment permit to CNF from the original FOB. The defendant addressed a letter dated 6th June, 2008 to the plaintiff suggesting that the shipment should be made in containers at a price of US Dollars 565.70 PMT CNF Nhava-Sheva. The defendant requested the plaintiff to confirm the same and make necessary amendments to the letter of credit so as to enable the defendant to prepare for the shipment. Such proposal was accepted by the plaintiff. In the meantime, it was also agreed that the shipment period should be extended till 31st August, 2008.
By a e-mail dated 27th August, 2008, the defendant forwarded details of shipment made with a request to forward the same to the buyers. Similar advice was also forwarded on 9th September, 2008. The cargo was shipped in total of 8(eight) different consignments. The first 7(seven) consignments of cargo were shipped as original agreed to Nhava-Sheva (a total of 18,106,698 MT) and the last consignment was shipped to Kolkata (3,340,495 MT).
In the beginning of the month of September, 2008, certain issues were raised as regards the quality of the goods supplied. By e-mails dated 8th September, 2008 and 9th September, 2008, H.S. Global alleged that the plaintiff had got the goods inspected by the SGS in India. It was sought to be alleged that the SGS's survey in India was pursuant to a mutual understanding between the plaintiff and the defendant and it was alleged that as per the SGS's survey done in India, the goods were not as per the quality which was agreed. 24
By a e-mail dated 10th September, 2008, the defendant replied to the same and raised objections to the e-mail. It was denied that there was any mutual agreement to arrange for quality survey in India. The defendant clarified that though the receivers had a right to have a surveyor appointed at the place of discharge, the same did not in any manner alter the contract conditions which provided that the quality would remain final at the time of loading as per the SGS survey. It was clarified that the different in the result between the Load Port and the Destination Analysis could be caused by numerous elements including extra- manipulation of the commodity, different sampling methods, different analysis methods, different definition of quality elements, etc. The defendant confirmed that the quality conformed to the contract agreement. By e-mail dated 10th September, 2008, H.S. Global responded to the said e-mail and made various allegations. From the said e-mail also it is apparent that the contract had always been between the defendant and the plaintiff and never between the defendant and STC.
We, therefore, find that in this case, the plaintiff has failed to prove any prima facie case that there was no agreement between the parties or consequently, there was no arbitration clause for resolving the disputes by way of arbitration. In the absence of any prima facie case, the other two factors for grant of injunction become redundant. In this case, the plaintiff has also nominated its 25 arbitrator pursuant to the agreement and at the same time, is trying to avoid arbitration agreed to by the parties.
We, therefore, find that the learned Single Judge, in the facts of the present case, rightly refused the prayer for injunction restraining the defendant from proceeding with the arbitration and we find no reason to interfere with the discretion exercised by her.
Any reasonable individual having regard to Section 3 of the Evidence Act would in the facts of the present case arrive at the same conclusion that the plaintiff has failed to prove prima facie case. We have pointed out that even no particular of any fraud has been alleged for avoiding the agreement dated June 10, 2008 which substituted the earlier agreement of April, 2008.
The appeal is thus devoid of any substance and is consequently dismissed with costs which we assess at Rs. 20,000/-.
(Bhaskar Bhattacharya, J.) I agree.
(Sambuddha Chakrabarti, J.) 26