Dismissed

M/S. Rashtriya Chemicals and Fertilizers Ltd. v. M/S. Continental Warehouding Corporation Ltd.

Bombay HC25 Jun 2014ARBP/314/2014

Case brief

AI extract

What is this about?

Single judge dismissed an arbitration petition challenging a sole arbitrator's award. The court held that the award, distinguishing short landing from handling loss based on port certificates and contract clauses, did not require judicial interference.

What did the court decide?

Arbitration Petition dismissed; Arbitrator's award upheld.

M/S. Rashtriya Chemicals and Fertilizers Ltd. Vs M/S. Continental… — Arbitration | Bombay HC (2014)

ARBP No.314_2014

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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ARBITRATION PETITION NO.314 OF 2014

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M/s. Rashtriya Chemicals & Fertilizers Ltd. … Vs.

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Petitioner

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M/s. Continental Warehousing Corporation Ltd.

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… Respondent

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Mr. Bomi Patel, Adv. a/w. Mr. Rushabh M. Sheth, Adv. a/w. Mr. Rajesh Dubey, Adv. a/w. Mr. Sheroy M. Bodhanwalla, Adv. i/b. M/s. M.S. Bhodanwalla & Co. for petitioner. Mr. B.S. Mahajan, Adv. for respondent.

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CORAM : MRS. ROSHAN DALVI, J. DATE : 25th June, 2014.

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P.C. :

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The petitioner has challenged the award of the sole arbitrator dated 1^st July, 2013 granting the respondent Rs.75.35 lacs of payment on the premise that the goods were short landed and short received and there was no handling loss.

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The only aspect to be considered in the arbitration was whether the goods was short landed or whether there was handling loss with regard to the discrepancy between the quantity of the goods purchased by the petitioner under a High Sea Sale from a third party and the quantity of goods that landed and which were weighed and verified.

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The Bill of Lading (B/L) and tax invoice in respect of the transaction shows 14,993.610 MTs of goods which were sold and which were held in the ship's hatches as the petitioner's cargo. Upon the ship landing in port the goods were weighed which shows

ARBP No.314_2014

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14,993.610 MTs leaving a balance of approximately 564.880 MTs.

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The petitioner would contend that this was the handling loss. The goods were handled by respondent as petitioner. The handling loss would mean and imply that there was a loss after the goods landed.

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The weight of the goods which landed itself were seen and verified under a certificate. That would be the short landing. The weightment certificate shows 14428.730 MTs of MOP landed from the vessel. The statement of facts for dry cargo certifies the findings for the short landed quantity and shows in the remarks in clause 4 that the 564.880 MTs were short landed. The respondent has applied for refund of excess duty for 564.880 MTs of short landed quantity. The learned Arbitrator has considered that the port trust certified that that shipment landed, the cargo was weighed, the weightment was verified and certified by the surveyor. It was accepted by the seller. Further the physical delivery of the cargo in hatches 1 and 2 which relate to petitioner were weighed in the port weigh bridge inside the port. The respondent herein, who is the claimant, had not split the cargo in the sea when it was discharged from the vessel and no cargo was left in wharf. The learned Arbitrator has considered the report of the surveyor and weightment certificate. He has also considered the B/L showing that the quantity in the B/L could not be taken as conclusive proof as per one of its terms printed in the B/L itself.

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Under the contract between the parties the discrepancy in the quantity delivered and the handling loss are both explained and specified in clause 21 and 22 thereof. The clause states that in case of discrepancy in the B/L quantity and the draft survey quantity and the

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ARBP No.314_2014

actual unloaded quantity the contractor (the respondent herein) was obliged to lodge the claim of the shortage and follow it up for settlement. Under clause 22 the respondent as the contractor was to ensure that the handling loss does not exceed 0.25% of the B/L which manifested the quantity. It shows that the handling loss would mean the difference between the quantity stated in the B/L manifested quantity and the quantity cleared. Hence the petitioner contends that this difference is the handling loss.

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Since the goods were weighed immediately upon being unloaded in the port and a survey report was given, it would only show the discrepancy in the quantity delivered which would be the short landing. If that itself is taken to be handling loss there would be no difference between the two.

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The petitioner applied for refund of excess duty for the short landed quantity of 564.880 MTs. The petitioner explained in the application that this short landed quantity was against manifested quantity of 14,993.610 MTs as per the port weight certificate which showed that the vessel landed quantity of 14428.730. This would show the admission of the short landing of the specified landed quantity made by the petitioner.

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The learned Arbitrator has considered all the aforesaid facts showing how the goods immediately upon unloading were shown to be of lesser weight and came to the conclusion that the goods were short landed. This is a possible conclusion which cannot be interfered with.

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The learned Arbitrator has also fairly considered the duty of the respondent herein as the agent of the petitioner to lodge the

ARBP No.314_2014

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necessary claims and follow then up to settlement. This part of the award has not been challenged by the respondent. The respondent accepts that he has to comply with clause 21 of the contract which he has done.

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The learned Arbitrator has considered all the necessary aspects. The award does not require any interference. 12. Hence Arbitration Petition is dismissed.

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( ROSHAN DALVI, J. )

M/S. Rashtriya Chemicals and Fertilizers Ltd. v. M/S. Continental Warehouding Corporation Ltd.

Case brief

What is this about?

What did the court decide?

M/S. Rashtriya Chemicals and Fertilizers Ltd. v. M/S. Continental Warehouding Corporation Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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