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2018 (10) TMI 1883 - SC - Indian LawsBill of Lading - whether printed conditions annexed to the Bill of Lading would not be binding upon the parties? - HELD THAT - The Bill of Lading makes it clear that the term Merchant (which is defined in the Standard Conditions Governing Multimodal Transport Documents-Clause (1) (e) as meaning shipper consigner or consignee) expressly agrees to be bound by all the terms conditions clauses and exceptions on both sides of the Bill of Lading whether typed printed or otherwise. The Respondent has expressly agreed to be bound by the arbitration Clause despite the fact that it is a printed condition annexed to the Bill of Lading. Secondly it must be remembered that the Respondent has itself relied upon the Bill of Lading as part of its cause of action to recover the sum of 26, 53, 593/- in the suit filed by it. The Respondent therefore cannot blow hot and 23-02-2021 (Page 2 of 3) www.manupatra.com Surender Gupta cold and argue that for the purpose of its suit it will rely upon the Bill of Lading (though unsigned) but for the purpose of arbitration the requirement of the Arbitration Act is that the arbitration Clause should be signed. The present is a clear case where Under Section 7(5) of the Act read with M.R. Engineers and Contractors Pvt. Ltd. (supra) (paras 22 24) the reference in the Bill of Lading is such as to make the arbitration Clause part of the contract between the parties - The fact that the stage of the present suit is that a particular witness is being examined would not come in the way of the Section 8(3) application being allowed inasmuch as the Section 8(3) application was filed in the same year as that of the suit. Appeal allowed - decided in favor of appellant.
Issues:
1. Validity of the arbitration clause in a Bill of Lading. 2. Interpretation of Section 7 of the Arbitration and Conciliation Act, 1996. 3. Application of the Multimodal Transportation of Goods Act, 1993. Issue 1: Validity of the arbitration clause in a Bill of Lading The case involved a dispute where the Respondent filed a Suit to recover a sum of money based on a Bill of Lading. The Appellant, who was the agent facilitating transport, invoked an arbitration clause included in the Bill of Lading. The lower courts dismissed the Appellant's request, stating that the printed conditions of the Bill of Lading were not binding. The High Court upheld this decision, emphasizing that there was no intention to arbitrate and the Respondent was not made aware of the arbitration clause. However, the Supreme Court analyzed the Bill of Lading, which explicitly stated that the Merchant agreed to be bound by all terms, including the arbitration clause. The Court found that the Respondent, by relying on the Bill of Lading as part of its cause of action, could not reject the arbitration clause based on lack of signature, as the law does not require the arbitration agreement to be signed, only in writing. Issue 2: Interpretation of Section 7 of the Arbitration and Conciliation Act, 1996 The Supreme Court referred to Section 7(4) of the Arbitration Act, which requires an arbitration agreement to be in writing but not necessarily signed. It highlighted that the law does not mandate a signature for the arbitration agreement to be valid. The Court emphasized that the reference to the arbitration clause in the Bill of Lading made it a part of the contract between the parties, as per Section 7(5) of the Act. The Court also cited a previous judgment to support its interpretation of the law regarding the validity of the arbitration agreement. Issue 3: Application of the Multimodal Transportation of Goods Act, 1993 The Supreme Court clarified that the dispute resolution mechanism, specifically the arbitration clause in the Bill of Lading, would be governed by the Arbitration Act, regardless of whether the Multimodal Transportation of Goods Act, 1993 applied to the case. The Court highlighted that the presence of an arbitration clause in the agreement established the parties' intent to resolve disputes through arbitration, irrespective of the stage of the ongoing suit. In conclusion, the Supreme Court allowed the appeals, setting aside the judgments of the High Court, and upheld the validity of the arbitration clause in the Bill of Lading, emphasizing the importance of honoring contractual agreements, even if they are printed conditions.
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