BHARAT PETROLEUM CORPORATION LTD. v. THE GREAT EASTERN SHIPPING CO. LTD

Citation: [2007] 11 S.C.R. 117

Court: Supreme Court of India

Bench: TARUN CHATTERJEE, D.K. JAIN

Case summary

BHARAT PETROLEUM CORPORATION LTD. v. THE GREAT EASTERN SHIPPING CO. LTD.pdf

Judgment text

J.. BHARAT PETROLEUM CORPORATION LTD. v. THE GREAT EASTERN SHIPPING CO. LTD. OCTOBER 12, 2007 [TARUN CHATTERJEE AND D. K. JAIN, JJ. ] -1 Arbitration-Arbitration agreement-Applicability-Time " Charter Party agreement-For letting on hire vessels-To Oil Corporation-Disputes arose between parties-After expiry ofthe agreement-Reference ofdispute to Arbitral Tribunal-Tribunal refused to adjudicate on the ground that the arbitration clause could not be invoked after expity ofthe agreement-:-High Court set aside the award of the Tribunal-On appeal, held: Arbitration clause contained in the agreement could be invoked even after expiry ofthe p agreement-Notwithstanding the expiry ofthe time fixed for the ; agreement, the same did not get extinguished for the purpose of determination ofthe disputes arising thereunder. ,.

Contract-Acceptance ofoffer-Manner of-Held: General rule that offer is not accepted by mere silence does not mean that it has to be given in so many words-In certain circumstances, offeree's silence coupled with his conduct taking form ofpositive act, may constitute an acceptance sub silentio. Doctrines/Principles-Principle ofSub Silentio-Applicability of -- finalization of the new Charter Party, the existing terms and conditions ofCharterParty continued to apply. Itwas also suggested ---, that agreement could be signed for the period from September 1, 1998 until the matter was finally decided on the existing terms and conditions. There was no response by the appellant, to this letter also. There was no further exchange ofcorrespondence between the parties,- during the year. The Writ Petition was disposed ofon August 20, 1999. Appellant continued to use the vessel under the Charter Party May 6, 1997 till August 31, 1999.

IOC informed the respondentabout the evaluation ofthe tenders as per the High Court --\ order. Respondent accepted the proposed rates except for two vessels. They requested for revision of rates in respect ofthese two ). vessels, but the same was turned down. Pursuant to some notices and some subsequent correspondence, an Arbitral Tribunal was constituted. ArbitralTribunal came to the conclusion that the Tribunal had no jurisdiction to decide the reference because the Charter Party dated May 6, 1997, arbitration clause whereofwas invoked, was valid only tipfo August 31, 1998 and the dispute related to the period ';subsequent to August 31, 1998; and that Charter Party dated May y 6, 1998was superseded by fresh agreement according to which the Charter hire rates were to be determined by the Oil Co-ordination Committee. Single Jμdge ofHigh Court set aside the Award holding that the Tribunal had the jurisdiction to adjudicate the dispute; and that Tribunal failed to consider clauses 4.

1and23 ofCharter Party I dated May 6, 1997, according to which Charter party was to come -1 to an end only on re-delivery of vessel and admittedly re-delivery did not take place after August 31, 1998 and thus it continued to be EASTERN SHIPPING CO. LTD. hired in terms of Charter Party dated May 6, 1997. Hence the present appeal. The question for determination was whether on expiry ofthe extended period ofcharter hire on August 31, 1998, Charter Party dated May 6, 1997 come to an end and the arbitration agreement perished with it. __, Dismissing the appeal, the Court HELD: 1. The general rule is that an offer is not accepted by " mere silence on the part ofthe offeree, yet it does not mean that an acceptance always has to be given in so many words. Under certain circumstances, offerree's silence, coupled with his conduct, which takes the form of a positive act, may constitute an acceptance of an agreement sub silentio.

Therefore, the terms of a contract between the parties can be proved not only by their words but also by their conduct. [Para 19] [128-E-F] >- 2. The principle ofsub silentio is clearly attracted in the present case. The conduct ofthe parties, as evidenced in the correspondence -~ between the parties, and in particular appellant's silence on respond-ent's letters dated 5th November, 1998 and 4th January, 1999, coupled with the fact that they continued to use the vessel, manifestly goes to show that except for the charter rate, there was no other dispute between the parties. They accepted the stand of the respondent sub silentio and thus, continued to bind themselves by other terms and conditions contained in the Charter Party dated 6th May, 1997, which obviously included the arbitration clause. ----1 [Para 20) [128-G; 129-G-H; 130-A] y 3. On a conjoint reading ofclauses, 4.

1and23 ofthe Charter Party dated 6th May, 1997, it is plain thatthe appellant was under an obligation to re-deliver the vessel as per the procedure contemplated in the afore-noted clauses. Indisputably, the vessel 1 in question had not been re-delivered at least during the relevant period and the appellant continued to use the vessel beyond 31st August, 1998. Having failed to re-deliver the vessel in terms of ·-- --·- -·-·- ·-- + Clause 4. 1 ofthe Charter Party, the appellant cannot plead that the Charter Party had been fully worked out. It is clear from the pleadings and the issue framed by the Arbitral Tribunal, that it was respondent's consistent stand that since the hired vessel had not been re-delivered at the end of the time charter party, the vessel would be governed by the terms and conditions in the Charter Party dated 6th May, 1997. However, the Arbitral Tribunal. answered the said issue against the respondent.

Even the question in regard to the effect and consequences of non-delivery of the vessel in terms ofthe Clause 4. 1and23 would by itself be a dispute arising under the said 'Charter Party'. A,rbitral Tribunal overlooked this aspect ofthe matter. [Para 22] (130-H; 131-A-C) 4. Though performance ofthe Charter Party agreement dated 6th May, 1997 may have come to an end on 31st August, 199~i; but it was still in existence for some purposes, viz. the effect ofvessel's non re-delivery as per the prescribed mechanism and its continued use beyond the stipulated time and, thus, the arbitration clause in the said Charter Party operated in respect ofthese and other allied purposes. Therefore, the factual scenario in the instant case !

cads to an inescapable conclusion that notwithstanding the expiry ofthe period fixed in the time charter party dated 6th May, 1997, the said charter party did not get extinguished, inter alia, for the purpose of determination ofthe disputes arising thereunder and the arbitration clause contained therein could be invoked by the respondent. p [Para23] (131-D-F] 5. Itwould be proper and expedient to constitute a fresh Arbltral Tribunal. Accordingly, an Arbitral Tribunal is constituted consisting ofthree former Judges ofthis Court to adjudicate upon the claim/ counter claim by the parties, subject to their consent and such terms and conditions as they may deem fit and proper. (Para 25] [132-A-B] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4829 of 2007. From the Judgment and final Order dated 1. 3. 2005 of the High Court at Bombay in Arbitration Petition No. 331 of2003. Sudhir Chandra, Parijat Sinha, S. C.

Ghosh, Soumitra Ghose Chaudhuri, Reshmi Rea Sinha and Snehasish Mukherjee for the AppeHant. Shyam Divan, Mahesh Agarwal, Rishi Agrawala, E. C. Agrawala, Gaurav Goel, Amit Sharma and Neha Aggarwal for the Respondent. The Judgment ofthe Court was delivered by D. K. JAIN, J. 1. Leave granted. 2. This appeal by Special Leave arises out ofa judgment and order dated 1st March, 2005 rendered by the High Court of Judicature at Bombay, whereby the learned Single Judge has set aside the order passed by the Arbitral Tribunal, holding that they did not have jurisdiction to entertain and try the claim and counter claim made by the parties. 3. In order to appreciate the issue, requiring determination, a few relevant facts may be stated. The appellant - Mis. Bharat Petroleum Corporation Limited is Government oflndia Undertaking, under the administrative control ofthe Ministry ofPetroleum & Natural Gas and is engaged in refining, distributing and selling ofpetroleum products all over the country.

The respondent- M/s. Great Eastern Shipping Company Limited is engaged in the business of shipping and allied activities and owns a fleet of tanker vessels for charter, including the vessel known as "JAG PRAJA". 4. An agreement, called the "Time Charter Party" in legal parlance, was entered into between the appellant and the respondent on 6th May, 1997 for letting on hire vessels for a period of two years from 22nd September, 1996 to 30th June, 1997 and from lst July, 1997 to 30th June, 1998, on the tenns and conditions set out in the said agreement.

However, before the Charter Party was to come to an end, on 29th Jw1e, 1998, the Indian Oil Corporation Limited (for short 'IOC'), acting as agent ofthe appellant, issued a fax to various ship owners, including the respondent herein, requesting them to extend the validity ofthe Charter Party Agreement dated 6th May, 1997 beyond 30th June, 1998 for a period of one month from 1st July, 1998 with option for two further extensions of 15 days each. The respondent agreed to the said proposal. Accordingly, on 29th June, 1998 an addendum was signed between the parties wh~reby the validity period of Charter Party was extended for one month with an option for two further extensions for a period of 15 days each. The terms and conditions; exceptions and exemptions contained in the Charter Party dated 6th May, 1997 remained unaltered. The parties are ad idem that the Charter Party dated 6th May, 1997 was extended till 31st August, 1998. 5.

It appears that since Charter Party dated 6th May, 1997 was coming to an end on 31st August, 1998, the Oil Companies sought permission ofthe Oil Co-ordination Committee, a wing ofthe Ministry ofPetroleum and Natural Gas for further extension ofthe Charter Party. However, the Oil Coordination Committee, by their fax message dated 26th August, 1998, declined the request ofthe Oil Companies, including the appellant, for further extension ofCharter Party beyond 31st August; 1998. The said fax mt! ssage was an internal communication between the Oil Coordination Committee and the Oil Companies. :~ 6. Thereafter, in September, 1998, the IOC for and on behalf of the Oil Industry, floated a fresh tender for carriage ofpetroleum products along the Indian coast on time charter basis·for a period of one year commencing from 1st September, 1998 to 31st August, 1999, on the terms and conditions set out in the tender document.

In response to the said tender, the respondent and other vessel owners submitted their bids. It seems that being aggrieved ofthe decision ofthe IOC to invite revised price bids after opening ofthe sealed tenders, one of the bidders filed a writ petition in the Bombay High Court, questioning the said decision. The appellant intervened in the said matter. The writ petition was disposed of vide order dated 20th August, 1999.

While disapproving in principle, the action ofthe IOC in inviting fresh price bids after opening the bids, but without recording final opinion on the merits ofthe issues raised in writ petition, the Court disposed of the petition, inter alia, directing that (i) the charter hire rates should be fixed by the Tender Evaluation Committee and (ii) as the tender was for the period ending 31st August, 1999 and the writ petition was being decided on 20th August, 1999, the IOC will not be required to enter into a contract for the period from 1st September, 1998 to 31st August, 1999. It is not in dispute that the vessel "JAG PRAJA", with which we are concerned, continued to be chartered by the appellant till 31st August, 1999. 7. It appears that pending finalization of a new charter party for the · period commencing 1st September, 1998, certain meetings took place between the Oil Companies and the Ship Owners, including the respondent herein.

On 12th October, 1998, the respondent informed the IOC that if all its nine vessels, mentioned in the letter, are used at a fair and reasonable rate for one year, from 1st September, 1998 to 31st August, 1999 for which the tender had been floated, they were agreeable to apply the new agreed rates for use ofthe said nine vessels from 1st July, 1998. On 31st October, 1998 the IOC faxed to the respondent relevant portion of the message received by them from Oil Co-ordination Committee, extending the period of usage ofthe existing coastal tanker fleet for the month of October, 1998, at 80% charter hire rates, prevailing till 30th June, 1998, on provisional basis, subject to adjustment ofprovisional charter hire with retrospective date from 1st September, 1998 against the revised charter hire, to be finalised by the Oil Industry in response to the tender floated by IOC on 1st September, 1998. Respondent's consent was asked for.

The respondent responded immediately vide their letter dated 5th November, 1998, agreeing in principle that revised charter hire rates, as and when finalized in response to tender floated by the IOC on 1st September, 1998, would be applicable to the vessels which are selected under the tender, retrospectively from 1st September, 1998. It was pointed out that the vessels which are not chartered under the tender floated would be at a disadvantage. It was clearly stated that since the tender was not finalized, the owners will be guided by the existing terms and conditions. Some other objections, not relevant at this stage, were also indicated. As such, all said and done, Oil Co-ordination Committee's proposal was not accepted. Nevertheless, some suggestions to resolve the controversy were given. 8. Thus, the proposal by the Oil Co-ordination Committee was not accepted by the respondent.

In the alternative, it was suggested by the respondent that the charter period be extended by six months on the existing terms and conditions at a mutually discussed time charter rate. Admittedly, the vessels continued to be chartered by the appellant beyond the date ofthis letter. 9. Thereafter, for almost two months, there was no communication between the parties. It was only on 31st December, 1998 when the IOC issued a fax to the respondent, enclosing draft letter regarding charter party agreement to be signed between the charterers and owners (with minor modification, if necessary), requesting the respondent to sign as per f proposal by the 4th January, 1999, on which date the respondent expressed its disinclination, stating in reply fax that as per usual practice, pending finalization ofnew charter, the existing terms and conditions of the charter party continue to apply.

Finally, it was suggested that: "We, therefore, suggest that we sign an agreement with you for the period from 1st September, 1998 until the matter is finally decided by you under the tender on the existing terms and conditions with the charter hire being provisionally paid on an ad hoc basis at 90% ofthe rate ·which was prevailing under the existing Charter Party. Kindly confirm in order to draw up a suitable agreement accordingly. " [Emphasis supplied] 10. Vide letter of even date, i. e. 4th January, 1999, the appellant suggested to the respondent that in the absence ofa formal charter party with effect from 1st September, 1998, a provisional arrangement for a period offour months eftective from 1st September, 1998 with an option for extension ofone month may be mutually agreed to by payment at the rate of 80% on charter hire prevailing on 30th June, 1998, as ad hoc ' hire. The respondent \:vas asked to convey their acceptance· to the said suggestion.

It appears that the respondent did not respond to the said suggestion by the appellant but all the same its vessel continued to be on charter with the appellant. 11. The writ petition was ultimately disposed of on 20th August, f 1999. It was only after a gap ofabout seven months that on 15th March, 2000, the IOC informed the respondent about the evaluation ofthe tenders in terms ofthe order passed by the High Court. Charter hire rate worked out by the Committee for vessel 'JAG PRAJA' for the period from 1st September, 1998 to 31st August, 1999 was communicated to the respondent. In response, the respondent, while expressing their disappumunent with the rate but purportedly, in view oftheir long business -'\ relations with the appellant conveyed their acceptance ofthe proposed rate in respect ofeach ofthe vessels' named in separate letters, all dated '"\ 1st May, 2000, with the expectation that their outstanding balance ofthe hire shall be paid to them at the earliest.

However, the respondent did not convey their acceptance ofthe charter hire rates for two vessels, viz. "JAG PRAJA" and "JACiPRAYOG". It appears that the respondent wrote various letters to the appellant for upward revision ofthe rate in respect ofthese two vessels but seemingly their request was ultimately tumed down on 2nd November, 2000, on receipt ofwhich, the respondent slammed a legal notice dated 6th November, 2000, on the appellant, inter r alia, re4uesting them to revise the rates on the basis ofmutual discussions and settle the accounts. Having failed to receive any reply to the said notice, ~ by another legal notice dated 1st December, 2000, the respondent called upon the appellant to pay balance amount ofRs. 43,947,517/- to them E. as charter hire in respect of vessel "JAG PRAJA" for the period from 1st September, 1998 to 31st August, 1999 within 15 days from date of receipt ofthe said notice or treat it as an arbitration notice.

The name of the arbitrator was also communicated to the appellant. It seems that pursuant to the said notice and some subsequent correspondence exchanged between the parties, an Arbitral Tribunal was constituted. --; 'y 12. Clain1s and counter claims were filed before the Arbitral Tribunal. On the basis ofthe pleadings ofthe parties, the Arbitral Tribunal framed as many as eight issues. However, arguments were heard only on the following three issues: "Issue No. I:- Whether the Hon'ble Arbitral Tribunal has no jurisdiction to adjudicate upon the dispute between the Claimant and the Respondent for the period September, 1998 to August, 1999 in respect of the vessel Jag Praja for the reasons stated in ~ --" para 1 ofthe written statement? Issue No. 2:- Whether there is any common practice that if the vessel is not re-delivered at the end of the period mentioned in ~... the time charter the vessel would be governed by the charter party under which originally it was chartered? Issue No.

5:- Whether the time charter party dated 6th May, 1997 )-. came to an end by eftlux oftime on 30th August, 1998? " -r 13. Vide order dated 12th May, 2003 the Arbitral Tribunal came to the conclusion that the appellant having invoked the arbitration clause contained in charter party agreement dated 6th May, 1997, which was valid upto 3lst August, 1998 and as the dispute between the parties related to the period subsequent to 31st August, 1998, they had no jurisdiction to decide the Reference. The learned Tribunal found issue No. 2 in the negative and issue No. 5 in the affmnative. According to the Tribunal on and after 1st September, 1998, charter party agreement dated 6th May, 1997 was superseded by a fresh agreement and a term of the -( agreement was that the charter hire rate would be determined by the Oil ~ Co-ordination Committee ofthe IOC. In nutshell, the Tribunal was ofthe view that with the performance, original charter party dated 6th May, 1997 got extinguished. 14.

The respondent challenged the said Award before the High Court. By the impugned order, the learned Single Judge has set aside the said Award, inter alia, holding that Arbitral Tribunal has the jurisdiction to adjudicate the disputes between the parties as the vessel continued to be hired by the appellant for the period subsequent to 31st August, 1998 'r on the same terms and conditions, as were contained in the charter party y dated 6th May, 1997, only subject to the revision or modification ofthe rate of hire to be determined by the Oil Co-ordination Committee. The learned Judge also felt that the Tribunal had erred in totally excluding from its consideration clauses 23 and 4. 1 ofthe charter party dated 6th May, 1997, whereunder the chatter party was to come to an end on re-delivery ~ ofthe vessel.

Admittedly, after 3lst August, 1998, re-delivery ofvessel did not take place and, therefore, in terms of clause 23, the vessel continued to be hired on the same terms and conditions except the term t as to the hire charges, on which there was disagreement between the parties. It was thus, held that. the charter party dated 6th May, 1997 did not come to an end by efflux oftime and it was extended by the parties on the same terms and conditions except the rate ofhire. Correctness of this order ofthe High Court is questioned in this appeal. 15. Mr.

Sudhir Chandra, learned senior counsel appearing on behalf ofthe appellant has assailed the impugned order on the sole ground that the Charter Party dated 6th May, 1997 having come to an end by efflux oftime on 31st August, 1998, the arbitration clause contained in it also perished and, therefore, in the absence ofa fresh arbitration agreement, claim of the respondent relating to the period 1st September, 1998 to 31st August, 1999 could not be referred to arbitration by invoking arbitration clause in Charter Party dated 6th May, 1997. Laying emphasis on the fax message dated 26th August, 1998 addressed by the Oil Coordination Committee to the oil companies, including the appellant, inter alia, informing them that no further extension ofthe 'Current Charter Hire Rate' will be allowed, learned counsel submitted that the said message made it clear to all concerned that Charter Party dated 6th May, 1997 would not be extended under any circumstance. 16. Mr.

Shyam Divan, learned senior counsel appearing on behalf ofthe respondent, on the other hand, submitted that notwithstanding the fact that the period fixed originally under the Charter Party or under the Addendum dated 29th June, 1998 had come to an end, the subsequent conduct of the parties goes to show that charter of the vessel by the appellant beyond 31st August, 1998 continued to be governed by the te1ms and conditions stipulated in charter party dated 6th May, 1997 and, therefore, an arbitration agreement did exist between the parties. Learned counsel argued that even otherwise till the vessel was not re-delivered in terms of Clauses 4 and 23 of Charter Party dated 6th May, 1997, the said agreement could not come to an end. It was pointed out that all the obligations of the owners as well as ofthe charterers during the period G the vessel was in use continued to be discharged under the Charter Party j dated 6th May, 1997 even after the expiry ofthe period ofthe Charter Party.

In support ofthe proposition that the concurrence of a party can be gathered from his conduct, like continued user of the vessel in the ( + present case, without any objection to respondent's letter dated 4th January, 1999, reliance is placed on a decision ofthis Court m The Godhrc: 1 Electricity Co. Ltd. & Anr. v. The State ofGujarat & Anr. • It was also submitted that the view taken by the High Court being a plausible view, interference m exercise ofextra-ordmary jurisdiction under Article 136 ofthe Constitution is unwarranted. 17. Thus, the short question for determination is whether on the rexpiry of the extended period of charter hire on 31st August, 1998, Charter Party dated 6th May, 1997 came to an end and the arbitration -r "' agreement between the parties perished with it? 18.

Before we proceed to examine the rival stands, we may note, at the outset, that neither the Arbitral Tribunal nor the High Court have gone into the question whether the claim made by the respondent wpuld otherwise fall within the ambit ofthe arbitration clause in the Charter Party ' or not. What is in dispute is whether the arbitration agreement between I · the parties had got extinguished after 31st August, 1998, i. e. the date of "· . expiry of the e>. 1ended period ofthe Charter Party. Therefore, we refrain from expressing any opin. ion on the scope and ambit ofthe arbitration clause though, prime facie, it appears to be quite widely worded. 19. It is, no doubt, true that the general rule is that an offer is not accepted by mere silence on the part ofthe offerree, yerit does not mean that an acceptance always has to be givenin so many words.

Under certain circumstances, offerree's silence, coupled 'vith his conduct, which takes the form of a positive act, may constitute an acceptance - an agreement sub silentio. Therefore, the tem1s ofa contract between the parties can be proved not only by their words but also by their conduct. }-- 20. In our view, the principle of sub silentio is clearly at. ~acted in the present case. As noted above, after the extended period of Charter Party dated 6th May, i997 had come to an end on 31st August, 1998 and the bids received pursuant to fresh invitation were pending finalization, vide their letter dated 12th October, 1998, the respondent had informed the appellant that they were agreeable to apply new rates for use ofthe vessel from lst July, 1998 provided all the nine vessels are used. However, on 31st October, 1998, the appellant faxed IbC's message informing BHARAT PETROLEUM CORPORATION LTD. v.

GREAT 129 them ofthe extension ofthe existing coastal tanker fleet for the month of A October, 1998 at reduced rates, viz. 80% of the Charter Party rates prevailing till 30th August, 1998. On receipt of the said letter, the respondent vide their letter dated 5th November, 1998, protested against the revision ofthe rates for the vessel not being considered under the new bid and stated in unequivocal terms that it was not possible for them to accept the proposal ofthe Oil Co-ordination Committee, communicated to them vide letter dated 12th October, 1998.

Yet again while responding to appellant's fax dated 31st December, 1998, whereby the respondent was required to sign a provisional charter party by 4th January, 1999, vide their letter dated 4th January, 1999, the respondent, pointed out to the appellant that usual practice is that pending finalization ofthe new Charter, the existing terms and conditions ofthe Charter Party continue to apply and, therefore, they were willing to sign the agreement as contemplated by the appellant based on the existing terms and conditions. It was suggested that an agreement may be signed between them for the period from 1st September, 1998 until the matter was finally decided by the appellant under the tender, on the existing terms and conditions with· the charter hire being provisionally paid on ad hoc basis at 90% ofthe • • rate which was prevailing under the existing Charter Party.

As noted hereinabove, there was no response by the appellant to respondent's letter dated 4th January, 1999 though it appears that vide their letter ofeven date, the appellant did suggest to the respondent that as a token offormal agreement the said letter may be jointly signed by the charterers and the vessel owners. Admittedly, no such agreement was signed between the parties. Indubitably, there was no further exchange of correspondence between the parties - during the year. Nevertheless, the appellant continued to use the vessel on hire with them under the time charter dated 6th May, 1997. The conduct of the parties, as evidenced in the said correspondence and, in particular appellant's silence on respondent's letters dated 5th November, 1998 and 4th January, 1999, coupled with the fact that they continued to use the vessel, manifestly goes to show that except for the charter rate, there was no other dispute between the } parties.

They accepted the stand ofthe respondent sub silentio and thus, continued to bind themselves by other terms and conditions contained in the Charter Party dated 6th May, 1997, which obviously included the arbitration clause. 21. We may examine the issue from another angle, based on respondent's stand that charter party dated 6th May, 1997 continues to be in vogue till the chartered vessel is re-delivered. In this context, it would be appropriate to refer to Clauses 4 and 23 ofthe Charter Party dated 6th May, 1997. These are in the following terms: f- "4. Delivery & Redelivery . ,. 4. 1. The vessel shall continue to be on charter to charterers in direct y ... continuation from 2348 hrs. 22. 09. 1996 to 30. 06. 1998. The vessel shall be re-delivered by charterers to owners on dropping last outward pilot at any port on west coast oflndia at charterers option. Charterers to give owners 15 days notice to probable port ofre-delivery. 4.

2 Charterers to load last three cargoes clean and re-deliver the vessel in clean condition. -\ 23. Final Voyage Should the vessel be on her voyage towards the port ofredelivery f '" at the time ofpayment ofhire is due, payment ofhire shall be made for such length oftime as Owners and Charterers may agree upon as being estimated time necessary to complete the voyage, less any disbursements made or expected to be made or expenses incurred or expected to be incurred by Charterers for owners account and less the estimated amount ofbunker fuel remaining at the tennination ofthe voyage and when the vessel is redelivered any overpayment '>shall be refunded by the owners or underpayment paid by y Charterers.

Notwithstanding the provisions of clause 4 hereof should the vessel be upon voyage atthe expiry of the period of this charter, Charterers shall have the use of vessel at the same rate and conditions for such extended time as may be necessary for the completion of the round voyage on which she is engaged and her return to a port ofredelivery as provided by the Charter. " ~ ' 22. On a conjoint reading of the said clauses, it is plain that the appellant was under an obligation to re-deliver the vessel as per the EASTERNSHIPPINGCO. LTD. [D. K. JAIN,J. ] procedure contemplated in the afore-noted clauses. Indisputably, the vessel in question had not been re-delivered at least during the relevant period and the appellant continued to use the vessel beyond 31st August, 1998. Having failed to re-deliver the vessel in terms ofClause 4. 1 ofthe Charter Party, the appellant cannot plead that the Charter Party had been fully worked out. It is clear from the pleadings and issue No.

2, framed by the Arbitral Tribunal, that it was respondent's consistent stand that since the hired vessel had not been re-delivered at the end ofthe time charter party, the vessel would be governed by the terms and conditions in the Charter Party dated 6th May, 1997. However, the Arbitral Tribunal answered the said issue against the respondent. It appears to us that even the question in regard to the effect and consequences ofnon-delivery ofthe vessel in terms ofthe Clause 4. 1and23 would by itselfbe a dispute arising under the said 'Charter Party'. With respect, the learned Arbitral Tribunal overlooked this aspect ofthe matter. 23. We are, therefore, ofthe opinion that though performance of the Charter Party agreement dated 6th May, 1997 may have come to an end on 31st August, 1998 but it was still in existence for some purposes, viz.

the effect ofvessel's non re-delive1y as per the prescribed mechanism and its continued use beyond the stipulated time and, thus, the arbitn,ltion clause in the said Charter Party operated in respect of these and other allied purposes. Therefore, the factual scenario in the instant case leads to an inescapable conclusion that nomithstanding the expiry ofthe period fixed in the time charter party dated 6th May, I997, the said charter party did not get extinguished, inter alia, for the purpose ofdetermination of the disputes arising thereunder and the arbitration clause contained therein could be invoked by the respondent. 24. In view ofthe foregoing discussion, we do not find any infirmity in the view taken by the High Court that Charter Party dated 6th May, 1997 had not come to an end by efflux oftime and it got extended by the conduct ofthe parties, warranting interference. 25.

Having come to the conclusion that an arbitration agreement } existed between the parties, the question which remains to be considered is whether the disputes between the parties should be referred to the same Arbitral Tribunal which had come to the conclusion that in the absence of H any arbitration agreement it did not have jurisdiction to entertain and try the claims and counter claims. We feel that it would be proper and expedient to constitute a fresh Arbitral Tribunal. Accordingly, we constitute an Arbitral Tribw1al consisting ofJustice M. Jagannadha Rao_ (Presiding Arbitrator), Justice D. P. Wadhwa and Justice S. N. Variava, former Judges ofthis Court to adjudicate upon the claim/coWlter claim by the parties, subject to their consent and such terms and conditions as they may deem fit and proper. It goes without saying that the learned Tribunal shall deal with the matter uninfluenced by any observations in this order on the respective stands ofthe parties. 26.

Resultantly, the appeal being devoid ofany merit is liable to be dismissed, which we do, leaving the parties to bear their own costs. 27. The Registry is directed to communicate this order to the learned Members of the Arbitral TribWlal to enable them to enter upon the Reference and decide the ~atter as expeditiously as practicable. K. K. T. Appeal dismissed. r y