Monday, 9 November 2015

Rule for construction of commercial contract in arbitration

It was at the stage of enforceability of the said award that the plaintiff has filed this application under Section 48 of the 1996 Act. I have carefully considered the fixture note and the two apparently conflicting clauses. There cannot be dispute that the parties have intended to resolve their dispute through arbitration. The only dispute appears to be the mechanism that is required to be followed for appointment of arbitrator. The petitioner disputes that the fixture note only contains commercial terms. Both the documents contain signatures of the petitioner. In fact, the signature in the fixture note is all that important to find out if any contract has been executed by and between the parties. The petitioner cannot resile from the terms agreed upon and contained in the fixture note. In the event there are two conflicting clauses in two documents it would be the endeavour of the Court to harmonize the two apparently conflicting clauses and to ascertain the intention of the parties. The fixture note as well as the proforma charter party must be read as a whole and every attempt shall be made to harmonize the terms thereof, keeping in mind that the rule of contra preferentem does not apply in case of commercial contract for the reason that a clause in commercial contract is bilateral and has mutually been agreed upon. The jurisdiction of the Tribunal was not questioned on the ground that the said agreement was entered into by coercion or duress. The plaintiff is not disputing their signature on the fixture note or the existence of the fixture note. Even if a plea is taken that the agreement was a product of fraud, the tribunal has jurisdiction to decide this issue. 
Calcutta High Court
Cliff Navigation S. A vs Lmj International Limited on 23 July, 2015

Author: Soumen Sen
Citation;AIR 2015(NOC)1089 Cal
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