Pakistan Case Law← Search
PLD 2012 Sindh 114

NOBLE CHARTERING INC through Attorney vs AWAN TRADING COMPANY

CitationPLD 2012 Sindh 114
CourtSindh High Court
Judge(s)Syed Hassan Azhar Rizvi
ResultSuit decreed

1. ' SYED HASAN AZHAR RIZVI, J.---The plaintiff has filed the instant Suit under Section 5 of the Arbitration (Protocol and Convention) Act, 1937 against the defendant praying therein that the Final Award dated 9-2-2004 given by the Arbitrators be filed in this Court and the judgment be pronounced in terms of the said Final Award.

2. ' The facts of the case are that in the month of March 2003, the defendant chartered from the plaintiff the Vessel "Pacific Acadian" for carriage of a cargo of 40,000 tons of coal from Tanjung Permukan, Indonesia for discharging the same at Karachi. The Vessel arrived at the port on 9-4- 2003 and some cargo was loaded on 21-4-2003. Thereafter, the defendant failed to load any, cargo or to provide evidence to show that the cargo was available to be loaded.

3. ' The Clause 44 of the Charter Party provided that any dispute arising under the Charter, which was to be referred to three persons for settlement in accordance with English Law, one Arbitrator to be appointed by each of the parties and the third by the two so chosen.

4. ' On 20-6-2003 the plaintiff appointed Mr. David Farrington of Fairwind Shipping Limited and on 11- 7-2003, the defendant appointed Mr. Robert Gaisford of Bramdean Stonegate, Wadhurst, East Sussex TN5 7EP to act as Arbitrators.

5. ' The parties made their written submissions and also filed documents before the Arbitrators through their legal representatives. Neither party asked for a Reasoned Award in accordance with para. 22 of the LMAA Terms (2002). After taking into consideration of the same, Arbitrators made their Final Award whereby, the defendant was required to pay demurrage in the sum of USD 246,700.00 as claimed; interest on the said amount at the rate of 4% per annum compounded every three months from 1-6-2003 till the date of payment; cost of the owners together with interest at the rate of 6% compounded every three months from the date of the Final Award till payment and cost of the arbitration at 3,900.00 together with interest thereon at the rate of 6% per annum compounded every three months from the date of payment by the Owners to the Tribunal till the date of reimbursement. The counterclaim of damages and additional cost of substitute vessel of the defendant has been dismissed ' It is, inter alia, contended by the learned counsel for the plaintiff that repeated requests and reminders, the Defendant has failed to make payment to the plaintiff in terms of the Final Award.

6. According to the learned counsel for the plaintiff, the remedy was available to the defendant to file any appeal or challenge the Final Award in any proceedings in United Kingdom. He further contended that the plaintiff and the defendant had entered into a Contract which provided Clause 44 according to which, in case a dispute arises between the parties which will be referred to three persons for settlement in accordance with English Law, one Arbitrator to be appointed by each of the parties and the third by the .Two so chosen. Learned counsel for the plaintiff further contended that the scope to examine the Final Award is limited and the questions of act would not be looked into as this. Court would not sit in Appeal against the Foreign Award sought to be filed.

7. ' On the other hand, Mr. Agha Zafar, learned counsel appearing on behalf of the defendant, has raised preliminary legal objection that since the plaintiff itself stated in the plaint as well as in the title and the body of the plaint that it is a company incorporated under the laws of Hong Kong, 1:2retore, the suit, filed under Section 5 of the Arbitration (Protocol and Convention)" Act, 1937, is liable to be dismissed on this score alone, as under the notification issued by the late Central Government of British India on 8-1-1938, Hong Kong or China is not Mentioned in the said notification, therefore, neither China nor Hong Kong is a party to the Convention under the Second Schedule of the Arbitration (Protocol and Convention) Act, 1937. According to the learned counsel for the defendant, the plaintiff changed its written and duly verified version and stated that the plaintiff is a company incorporated under the laws of British Virgin Island. In the said notification issued in the year 1938, the Central Government of British India neither declare the Pakistan as one of the powers nor declare as a party to the Convention set forth in the Schedule of the Arbitration (Protocol and Convention) Act, 1937. According to the learned counsel, the Final Award is not a foreign award, as the condition set out in section 2,' subsection (1)(b) of the Arbitration (Protocol and Convention) Act, 1937 did not satisfy, since in the Notification issued in the year 1938 the names of China and Hong Kong has not been mentioned. No notification has been issued declaring China and Hong Kong as party to the Convention set forth in the Schedule of the Arbitration (Protocol and Convention) Act, 1937. Learned counsel further contended that when the vessel arrived at the loading port, the cargo could not be made available as various disputes between the suppliers and mines owners, which caused delay to load the cargo at the relevant time. He further stressed that the time for loading has been extended with mutual consent of the plaintiff many times. Lastly the time was mutually extended for loading up to 7-5-2003 subject to the payment of Rs,60,00,000, but the vessel sailed on 5-5-2003 before expiry of the three days, this fact was also brought to the knowledge of the defendant that when the shippers went to load the cargo they found (shippers) that the vessel already sailed away on 6-5-2003. In support of his case, learned counsel for the defendant has placed reliance upon the case of Alfred C. Toepfer International GMBH vs. Pakistan Molasses Company (2003 CLD 1666) and Messrs Continental Grains Co., v. Messrs Naz Brothers (1982 CLC 2301).

8. ' In rebuttal to the version of the defendant in its objection, learned counsel for the plaintiff replied- that while the plaintiff is administered from Hong Kong, it is found and registered in the British Virgin Island where it has its registered office. The learned counsel for the plaintiff referred to 3rd Edition, Volume 6 of the Laws of England by the late the Right Honourable the Earl of Halsbury, Page No,113 wherein it is" interpreted that that "The nationality (m) and domicile (o) of a company is determined by its place of registration". He Further argued that upon resumption of sovereignty of China extended the territorial application of the Convention to Hong Kong, Special Administrative Region of China, subject to the statement originally made by China upon accession to the Convention. On 19-7-2005, China declared that the Convention shall apply to the Macao Special Administrative Region of China subject to the statement originally made by China upon accession to the Convention. In reply to the objection of the learned counsel for the defendant, with respect to the implementation of notification in Pakistan issued in the year 1938, learned counsel for the plaintiff has referred to subsections (1) and (2) of section 4 of the Arbitration (Protocol and Convention) Act, 1937. Learned counsel for the plaintiff further contended that at this forum the defendant is raising objection that the Final Award is not a foreign award, but from the day one the defendant fully participated in the arbitration proceedings without raising any objection. Even the defendant did not file any appeal against the Final Award before the Competent Forum and/or raised any objection against thereto.

9. ' I have heard the arguments advanced by the learned counsel. For the parties and perused the entire record placed before me as well as the case law cited.

10. ' Before this Court comes to the conclusion, it is pertinent to reproduce the Subsections (1) and (2) of Section 4 of the Arbitration (Protocol and Convention) Act, 1937, which reads as under:-- "4. Effect of foreign awards.-(1) A foreign award shall, subject to the provisions of this Act, be enforceable in Pakistan as if it were an award made on a matter referred to arbitration in Pakistan.

(2) any foreign award which would be enforceable under this Act shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in Pakistan and any references in this Act to enforcing a foreign award shall be construed as including references to relying on an award."

11. ' Against the objections raised by the learned counsel for the defendant that the Final Award impugned herein is not a "foreign award" and even in the notification issued in the year 1938, the Central Government of British India neither declare the Pakistan as one of the powers nor declare as a party to the Convention set forth in the Schedule of the Arbitration (Protocol and Convention)

12. Act, 1937, it would be significant to reproduce the Section 2 of Subsections (1), (a), (b) and (2) of the Arbitration (Protocol and Convention) Act, 1937, which reads as under:-- "2. Interpretation:- (1) In this Act 'foreign award" means an award on differences relating to matters considered as commercial under the law in force in Pakistan made after the 28th day of July, 1924-

(a) In pursuance of an agreement for arbitration to which the protocol set forth in the First Schedule applies, and

(b) between persons of whom one is subject to the jurisdiction of some one of such powers as the [Federal Government, being satisfied that reciprocal provisions have been made, may, by notification in the official Gazette, declare to be parties to the Convention set forth in the Second Schedule, and of whom the other is subject to the jurisdiction of some other of the powers aforesaid, and

(c) ____________________________

(2) For the removal of doubt it is hereby declared that any notification issued under this Section by the late Government of India before the fifteenth day of August, 1947, and in force on that day for the purpose of enforcement of foreign awards in British-India, declaring any power to be a party to the said Convention or any territory to be the territory to which the Convention applies, shall be deemed to be a notification issued by the [Federal Government] for the purpose of enforcement of foreign awards in Pakistan). "

13. ' Learned counsel for the plaintiff, in support of his version and in rebuttal to the objection raised by the learned counsel for the defendant, filed a Certificate of Incorporation dated 28-7-1993 issued to the plaintiff-Company by the Deputy Registrar, Victoreen Rommey - Varlack, in respect of Territory of the British Virgin Islands, the International Business Companies Ordinance (No,8 of 1981) along with his statement dated 4-5-2010, which is self-explanatory.

14. In view of the discussion made hereinabove, I am of the opinion that this Court is not an Appellate Forum to re-examine and reappraise the evidence and other material and would only confine to examine the Final Award within the parameters of the provisions made available under the Arbitration (Protocol and Convention) Act, 1937 and the interference, if any, could only be warranted if the condition surfaced the Arbitration (Protocol and Convention) Act, 1937. The defendant should have availed the remedy in appeal available to it, which the defendant did not avail. I am of the considered view that this Court by exercising the powers can pass an executing order, which could not be travelled beyond the Final Award. Since the Final Award has already been filed and I am satisfied with the same, therefore, the Final Award is made Rule of the Court. The Suit is decreed in terms of the Final Award dated 9-2-2004.

For educational and research use only — not legal advice. Verify against the official report before relying on it. See our Disclaimer.
Disclaimer·Privacy·Terms·Search