Supreme Court of India
GREAT OFFSHORE LTD.versusIRANIAN OFFSHORE ENGINEERING & CONSTRUCTION COMPANY
- Citation
- 2008 INSC 975
- Decided
- 25 August 2008
- Disposal
- Appeal(s) allowed
- Bench
- DALVEER BHANDARI
Holding
A faxed charter party agreement that is signed by both parties satisfies the "in writing" requirement of Section 7 of the Arbitration and Conciliation Act, 1996, making it a valid arbitration agreement and justifying the appointment of an arbitrator.
Summary
Great Offshore Ltd. filed an arbitration petition asserting that a charter party agreement (CPA) faxed on 22 August 2005 contained a valid arbitration clause. Iranian Offshore Engineering & Construction Co. contested the existence of a binding contract, alleging the faxed CPA was a forged copy, lacked the respondent's seal, and was not an original. The Court held that the petitioner bore the initial burden to prove a valid arbitration agreement, which was satisfied by the faxed CPA’s apparent legitimacy and supporting correspondence; the burden then shifted to the respondent to prove forgery, which it failed to do. The Court interpreted Section 7 of the Arbitration and Conciliation Act, 1996 to accept faxed documents as "in writing" and required only signatures, not original copies, seals, or signatures on every page. Consequently, the faxed CPA was deemed a valid arbitration agreement, and the petition for appointment of a sole arbitrator was allowed.
Issues considered
- The existence of a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996.
- Whether a faxed document satisfies the statutory requirement of being "in writing" and signed by the parties.
- Whether the alleged lack of original, seal, or signatures on each page defeats the validity of the agreement.
- Whether the respondent proved that the faxed CPA was forged.
Legislation cited
- Arbitration and Conciliation Act, 1996s. 7(3), s. 7(4)(a), s. 7(4)(b)
- UNCITRAL Model Law on International Commercial Arbitration (1985)
Subjects
Arbitration agreementSection 7Faxed contractWritten formSignatureForgeryContract formationUNCITRAL Model LawAutonomy of willArbitration petitionCharter party agreement
Judgment
[2008] 12 S.C.R. 515
../
GREAT OFFSHORE LTD. A
II.
IRANIAN OFFSHORE ENGINEERING &
CONSTRUCTION COMPANY
(Arbitration Petition No.1 O of 2006)
AUGUST 25, 2008 8
Arbitration and Conciliation Act, 1996:
s. 7 - Petition for appointment of arbitrator - On the
basis of arbitration agreement faxed by petitioner - Claim of c
respondent that there was no conclu(led agreement between
parties and signatures on FAX agreement were forged -
Held: Initial burden to prove that valid arbitration agreement
existed was on petitioner - Fax header prima facie suggested
that agreement was genuine - Burden shifted to respondent
D
to prove that the signatures on agreement were forged w~ich
it failed to discharge - Thus valid arbitration agreement
_,.. existed - Petition for appointment of arbitrator allowed -
UNCITRAL Model Law on International Commercial
Arbitration (1985).
E
s. 7(4)(a) - Arbitration agreement - Essential elements
of - Held: Arbitration agreement has to be in writing and
signed by both the parties, though no need for parties to
sign every page of the arbitration agreement - Also no
requirement that it has to be original - The Act defines the F
,....,_
term 'in writing' - Court is precluded from adding another
term to the definition - Adding technicalities disturbs parties
autonomie de la volonte - Interpretation of statutes - Adding
or reading words into the statute.
s. 7(4)(a) - FAX agreement - AcceptabHity of, under s. 7.,... G
r-___. Held: FAX falls under 'other means of telecommunication' -
Hence acceptable under s. 7 - Court to view the legislative
intention especially in the light of Act's main objectives of
minimizing the supervisory role of Courts in the arbitral process.
515 H
(
516 SUPREME COURT REPORTS [2008] 12 S.C.R.
A Words and phrases: 'Fax' - Meaning of
The parties had done business with each other in
2004. They expressed mutual interest for doing business
for the second time. On June 23rd, 2005, the applicant-
petitioner faxed an offer to the respondent. In turn, the
8 respondent faxed a letter of intent on the same day.
Applicant acknowledged the award of contract in favour
of respondent.
On August 13th, the respondent faxed a letter to
c the respondent, suggesting that additional provisions
be incorporated in a new draft of the contract and further
asked the applicant to pay the outstanding amount from
the preceding contract.
On August 22nd, the applicant allegedly sent the
D faxed Charter Party Agreement (CPA) to the respondent.
Both parties signed the faxed CPA, and it bore the
applicant's seal. However, it did not bear the
respondent's seal. On October 26, the respondent
originally asserted that it never signed the faxed CPA
E and that the document was forged.
The applicant filed the present petition seeking
appointment of sole arbitrator. The respondent
contended that the two parties had not progressed
beyond the stage of negotiation and that there was no
F concluded contract between them and hence there was
no question of referring the dispute to arbitration; and
the "faxed CPA" of August 22nd was (1) a copy, not the
original; (2) was stamped by one, not by both parties;
(3) one of the parties did not sign every page; and (4) it
G was first sent vide fax.
Allowing the petition, the Court
HELD: 1.1. The burden to prove that a valid contract
containing an arbitration clause existed first rested on
H the applicant, as it was the applicant who moved this
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 517
ENG. & CONST. COMPANY
v Court. The faxed CPA, on its face, appears legitimate, A
thus the onus shifted to the respondent to prove that it
was forged. It appears, prima facie, to be legitimate
because it bears the heading "08-SEP-2005 13:52 FROM
IOEC HEAD OFFICE TO ALLAHVER[)I" (the "fax
header"). This is an important piece of evidence that s
makes its genuineness more probable. Hypothetically,
the applicant could have fabricated the fax header. But
that is highly unlikely and presumes much more than
what is expected in normal human conduct especially
when that conduct concerns the forgery of an executive c
officer's signature. It should not be forgotten that this
case is between sophisticated companies, not warring
family members that dispute the authenticity of a Will.
[Para 55] [536-F-H, 537-A]
Dresser Rand S.A. v. Mis. Bindal Agro Chemical Ltd. D
& Another, AIR 2006 SC 871 - relied on.
May & Butcher Limited v. The King (1934) 2 KB 17; Ml
s. Rickmers Verwaltung Gimb .H v. Indian Oil Corporation
Ltd., AIR 1999 SC 504 - referred to.
E
Chitty on Contracts [29th Edn. Vol.1] - referred to.
1.2. There is no evidence· to suggest that the faxed
CPA was forged. To the contrary, the evidence is the
faxed CPA bearing the parties' signatures coupled with
correspondence between the parties. The F
correspondence, as it is more than just a pleading, adds
additional weight to the applicant's story. The applicant's
letter of 21st October corroborates the allegation that
respondent's official delivered the faxed CPA to the
applicant on 12th September. The date of delivery of G
12th September fits the timeline provided on the fax
t- "· header, as the respondent could only have delivered
the faxed CPA after 8th September. Moreover, it appears
that having received the faxed CPA on 12th September,
the applicant was prompted to ask for the original vide H
....
518 SUPREME COURT REPORTS [2008] 12 S.C.R.
A email on 14th September. Once again, the dates match ·"*
up. [Para 57] [537-C-E]
2.1. In terms of Section 7(3) and 7(A)(a) of Arbitration
and Conciliation Act, 1996, the arbitration agreement has
to be in writing and signed by the parties. There is no
B requirement that the arbitration agreement has to be an
original. Where the statute has gone to great lengths to
define exactly what is meant by the term "in writing,"
the Court is precluded from adding another term to
definition. Indeed, "it is contrary to all rules of
c construction to read words into an Act unless it is
absolutely necessary to do so." An exception to this I
rule can be made. But before adding words to a statute, ~
the Court must be abundantly clear of three matters: (1)
the intended purpose of the statute or provision in
question, (2) that by inadvertence the draftsman and
D Parliament failed to give effect to that purpose in the
provision in question; and (3) the substance of the
provision Parliament would have used, had the error in
the Bill been noticed. One of the main objectives of the
Arbitration and Conciliation Act, 1996 is to minimise the
E role of the Court; adding additional requirements to the
Act is antithetical to such a goal. [Paras 61- 64] [539-
E,G-H, 540-A,B]
Bihar State Mineral Development Corporation & Another
v. Encon Builders (1) (P) Ltd., (2003) 7 SCC 418; K.K. Modi
F v. K.N. Modi & Others, (1998) 3 SCC 573; Renula Bose
(Smt.) v. Rai Manmathnath Bose, AIR 1945 PC 108;
Assessing Authority-Cum-Excise and Taxation Officer,
Gurgaon & Another v. East India Cotton Mfg. Co. Ltd.,
Faridabad (1981) 3 SCC 531 - relied on.
G Stock v. Frank Jones (Tiptan) Ltd., (1978) 1 All ER 948,
p.951;
Justice G.P. Singh's Principles of Statutory
Interpretation, 11th Edition, 2008 - referred to.
H 2.2. Section 7 does not require that the parties stamp
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 519
ENG. & CONST. COMPANY
the agreement. It would be incorrect to disturb the A
Parliament's intention when it is so clearly stated and
when it in no way conflicts with the Constitution. [Para
65] [540-C]
2.3. Nothing in Section 7 suggests that the parties
must sign every page. Even if the faxed CPA is construed 8
as a "document," it need only be "signed by the parties"
pursuant to Section 7(4)(a). Every page does not need
to be signed. If it is considered a "document," then this
requirement would be met. Both parties signed the faxed
CPA in the signature box at the bottom of Part I. That C
said, the faxed CPA more closely fits within Section
7(4)(b)'s requirements. [Para 66] (540-D-F]
2.4. Section 7(4)(b) states that an agreement is in
writing if it is contained in "an exchange of letters, telex,
0
telegrams or other means of telecommunication which
a
provide record of the agreement." This section covers
agreements that are sent via facsimile ("fax") as they are
"other means of telecommunication". "Fax" is defined as
"a machine that scans documents electronically and
transmits a photographic image of the contents to a E
receiving machine by telephone line'' or "a document
received by such a machine." This definition clearly provides
that a fax falls under "other means of telecommunication."
Thus, faxed agreements are acceptable under Section 7 of
the Act. [Para 67] [540-F-H, 541-A] F
Chambers 21st Century Dictionary - referred to.
2.5. With no evidence to indicate that the
respondent's signature was forged, the faxed CPA
stands on its own as the record of agreement. Likewise, G
Section 7(4)(b) stands satisfied. The court has to
translate the legislative intention especially when viewed
in light of one of the Act's "main objectives": "to minimise
the supervisory role of Courts in the arbitral process.
Adding technicalities disturbs the parties' "autonomy of H
520 SUPREME COURT REPORTS [2008] 12 S.C.R.
A the will" (I' autonomie de la volonte}, i.e., their wishes. If
this Court adds a number of extra requirements such as
stamps, seals and originals, then ·the parties' intention
to arbitrate would be foiled by formality. Such a stance
would run counter to the very idea of arbitration, wherein
B tribunals all' over the world generally bend over
backwards to ensure that the parties' intention to
arbitrate is upheld. [Paras 68- 71] [541-8,C,E,F]
2.6. Technicalities like stamps, seals and even
signatures are red tape that have to be removed before
C the parties can· get what they really want - an efficient,
effective and potentially cheap resolution of their dispute.
The autonomie de la volonte doctrine is enshrined in the
policy objectives of the United Nations Commission on
"
i
International Trade Law ("UNCITRAL") Model Law on
D International Commercial Arbitration, 1985, on which
Indian Arbitration Act is based. The courts must
implement legislative intention. It would be improper and
undesirable for the courts to add a. number of extra
formalities- not envisaged by the legislation. The courts
E directions should be to achieve the legislative intention.
[Para 71, 72] (541-H, 542-A-C]'
Law and Practice of International Commercial
Arbitration, Alan Redfern and Martin Hunter, Street & Maxwell,
London, 1986; · Model Law on International Commercial
F Arbitration, 1985 - referred to.
3.1. Once it is established that the faxed CPA is
valid, it follows that a valid contract and a valid arbitration
clause exist. This contract, the faxed CPA, does not suffer
G from a conditional clause, as did the Letter of Intent.
Thus, the respondent's argument that the parties were
not ad idem must fail. [Para 74] (542-G]
3.2. The charter party agreement that had been
signed by the applicant and the respondent clearly
H indicated that the parties have entered into a valid and
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 521
ENG. & CONST. COMPANY
~f concluded contract. The other correspondence between · A
the parties also leads to a definite conclusion: the parties
have entered into a valid contract containing an
arbitration clause. Since a dispute has arisen between
the applicant and the respondent, it needs to be referred
to the arbitrator. On consideration of the totality of the B
y
·, facts and circumstances, the applicant is entitled in law
to an order for appointment of a sole arbitrator.
Consequently, Hon'ble Justice S.N. Variava, the retired
Judge of the Supreme Court is requested to accept this
arbitration. [Para 75, 76] [542-H, 543-A,C] c
Case Law Reference
AIR 2006 SC 871 relied on Para 51
AIR 1999 SC 504 referred to Para 51
{2003) 1 sec 418 relied on Para 61 D
(1998) 3 sec 573 relied on Para 61
AIR 1945 PC 108 relied on Para ?3
(1981) 3 sec 531 relied on Para 63
ORIGINAL CIVIL JURISDICTION : Arbitration Petition No. E
10 of 2006
S.K. Mukherjee, Vivek Kishore, Sangeeta Bharti, Ruchi
Gaur Narula and S.R. Setia for the Appellant.
Shrish Kumar Misra, Garbesh Kabra, Ajay Kr. Singh and F
~ Uma Bhattacharya for the Respondents.
The Judgment of the Court was delivered by
DALVEER BHANDARI, J. 1. Great Offshore Limited
has filed a petition under section 11 (5)(6)(9) and (12) of the G
Arbitration and Conciliation Act, 1996 whereby the applicant
seeks the appointment of a sole arbitrator. The applicant, Great
Offshore Ltd., submits that it has entered into a charter party
agreement with the respondent, Iranian Offshore Engineering
& Construction Company. The charter party agreement ("CPA") H
522 SUPREME COURT REPORTS [2008] 12 S.C.R.
A contains an arbitration clause. Relying on this'.. Clause, the
applicant has asked this Court to appoint an· arbitrafor to
resolve the dispute. The respondent, however, contends that
the two parties had not progressed beyond the stage of
negotiation and that there is no concluded contract between
B them. Therefore, it is argued that th·ere is no question of
referring the dispute to arbitration.
2. BriefJ facts which are relevant to dispose of this
arbitration petition are recapitulated below.
3. The charter party agreement in dispute marks the
C second time the parties have done business with each other.
The first time was in 2004. In March of that year, the respondent
entered into a contract with the Oil and Natural Gas
Corporation Limited ("ONGC") to carry out construction work
on ONGC's installations at Bombay High. On 26th October,
D 2004, the applicant and the respondent entered into a charter
party agreement. Under this prior agreement, the respondent
hired a vessel combination from the applicant. The respondent
required a specialized offshore construction barge known as
a "Gal Constructor." It also required an anchor handling tug,
E named "AHT Malaviya Five." The AHT Malaviya is used in
combination with the Gal Constructor. I shall refer to the Gal
Constructor and the AHT Malaviya as the "vessel combination."
4. The respondent needed this combination to. execute
offshore work for ONGC. This work was part of ONGC's
F RSPPM project, Phase I. The first phase was completed in
: November 2004.
5. In this case, the controversy is confined to the alleged
agreement relating to the second phase of ONGC's project.
G 6. In this arbitration petition, I need to decide whether the
pa'rties have entered into a valid contract containing an
arbitration clause. To this end, it has become imperative to
review the relevant correspondence between them. Only then
will I be able to arrive at a conclusion as to whether there was
a concluded contract or whether the parties had never
. H , ·progressed beyond the stag~ of negotiation. ..... ·
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 523
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
..,.r 7. After the parties expressed mutual interest in resuming A
business for Phase 11, the respondent faxed a letter to the
applicant. The letter is dated June 20th, 2005. In this letter, the
respondent expressed its intention to use the applicant's
vessel combination for 170 days pursuant to the same terms
as the preceding agreement. A few amendments, however, B
were to be made to that agreement.
'
'f
8. The applicant responded vide email the next day and
stated that it would like to "come to an agreement." After
meeting the respondent on 22nd June, the applicant faxed an
offer to the respondent on June 23rd, 2005. c
9. In turn, the respondent faxed a letter of intent on June
23rd, 2005. The letter stated that it was " ... a firm and
unconditional letter of intent (for short LOI) for award of contract
for charter hire of your barge Gal Constructor and Malviya 5".
D
Nevertheless, the very same letter contained a contingency clause:
"This Agreement is subject to IOEC [respondent]
providing a suitable barge and AHT acceptable to GE
Shipping [applicant] for a period of 45-55 days on
mutually agreed rates for commencement between 25th E
October and 10th November 05 for BHN MOL project
works."
10. On July 15 \ 2005, the respondent's minutes of
. meeting indicate that the barge (vessel) was to be available
for visual examination .i ••• until 25th of July after which the barge
will leave AJMAN port in UAE for the project in PG".
F
11. On August 4th, 2005, the applicant explained that it
no longer wanted the respondent to provide a barge for 45-
55 days, as mentioned in the respondent's June 23rd letter of
G
intent. Because the parties could not agree on the rate for this
service1 the applicant said that it would make alternate
arrangements.
12. On August 11th, the respondent sent a letter in regard
to modifying the Barge Gal Constructor so that it could function H
524 SUPREME COURT REPORTS [2008] 12 S.C.R.
as a riser installation barge. Based on its engineering analysis,
'-r
A
it sought to install " ....5 davits in the port or STBD side at the
barge" as well as a " ... working platform as an extension to
main deck in the aft quarter over one of the anchor rests".
13. In response to a meeting on August 8th and the above
B letters, the respondent faxed a letter to the applicant on August
f
13th, 2005. The letter suggested that additional provisions be :.>f..
incorporated in a new draft of the contract. The respondent
requested the right to modify the Gal Constructor, thereby
enabling it to perform a riser installation. The respondent further
c asked the applicant to pay the outstanding amount (USO
188,500) from the preceding contract. In conclusion, the
respondent stated that it would be willing to finalize the contract
before the 30th of August.
14. On 16th August, the parties met to discuss the
D proposed changes. The applicant formally responded to the
"'
respondent's suggestions in a letter dated August 22nd, noting .._
that the parties had come to the following agreement regarding
a number of outstanding issues: '.)-
S. No. Clause Agreement
E
1 Modifications for Riser Clause on the basis of
Installation Addendum 3 to Charter
' Party dated 26th Oct 04 to
be incorporated ·
f • 2 Early Termination Clause It was mutually agreed not to
include the clause suggested
3 Employment of vessel Clause as per Charter
Party dated 26th Oct 04 to
be incorporated
G 4 Sublet Clause Clause 17 of the charter
party to be referred in
d
additional clause pertaining
,. to sublet
5 . Cred.it note issue Addressed hereunder
H
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 525
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
~·
... we confirm our acceptance of the credit note amounting A
to US$186,618 ... for subject vessel combination for
charter party dated 25th Oct 2004 .... "
15. Before proceeding with the correspondence, it is
pertinent to note that the faxed charter party agreement ("faxed
CPA") is dated August 22nd. After having settled a number of B
'¥
;y. outstanding issues vide the above letter, the applicant allegedly
sent the faxed CPA to the respondent on the same day.
16. The faxed CPA officially entitled the "Charter Party
for Offshore Service Vessels Code Name 'Supplytime 89"'
dated August 22nd, 2005 is reproduced, in relevant part. The c
"charterer" is the respondent, and the applicant is the "owner":
1. Place & Date. Mumbai, India. 22nd August 2005. . ..
9. Period of Hire. 204 days firm I minimum ...
D
14. Early termination of charter (state amount of hire payable)
(Cl. 26(a)) Not Applicable.
18. Employment of Vessel restricted to (state nature of
service(s))
(Cl Sa)) Hook up, commissioning, accommodation and E
offshore Installation work such as I-Tube installation and Riser
Installation and all other activities of RSPPM Project, within
Vessel's natural Capabilities and safe practices/ operations.
19. Charter Hire (state rate & currency) (Cl 10(a) & (d))
F
-· 22. Payments ...
USO 31,000 ... PDPR ...
Payments shall be made against acceptable,
unconditional, revolving and irrevocable Letter of Credit
G
issued at sight by the Charterer's bank for USO
~ 6,500,000 ...
These L/C(s) to be opened, latest by 15th September
2005. However draft of L/C(s) should be provided to the
Owners by 1st September 2005. H
526 SUPREME COURT REPORTS [2008] 12 S.C.R.
A 33. Law and arbitration (state Cl 31 (a) or 31 (b) or 31 (c), as
agreed, If 31c agreed also state place of arbitration) (Cl.31)
Clause 31 (c)-lndianArbitration and Conciliation Act, 1996 at
Mumbai •
B
'(
17. I must provide some background before dealing with ·¥
other documents, as the faxed CPA sits at the center of this
.dispute.
C 18. It appears that both parties signed the faxed CPA,
and it bears the applicant's seal. However, it does not bear
the respondent's seal. The applicant contends that it had sent
the original to the respondent on August 22nd. The respondent
did not return the original. Instead, on September 8th, the
D respondent's head office faxed a copy of the CPA to its local
office. [The top of the said fax shows the date and time as .;-·
well as the place from and to which it was sent; it reads "08-
S E P-2005 13:52 FROM IOEC HEAD OFFICE TO
ALLAHVERDI"]. This faxed copy is signed by the. respondent'~
Project Director, Mr. M. Sabbaghi.
E
19. The respondent's Mr. Ali Rahmati provided the
applicant the faxed CPA on October 12th, according to the
applicant's letter dated October 21st. In a letter dated October
26, the respondent originally asserted that it never signed the
F faxed CPA and that the document was forged.
20. Between the date on which the applicant sent the
faxed CPA - 22nd August - and the date on which the
respondent reportedly returned it to the applicant - 12th
September, ONGC had advised the respondent to get the
G vessel combination certified before proceeding with a Riser
installation. ONGC's letter dated 30th August stated that the
vessel did not have any past track record with riser installations.
21 . The applicant later expressed concern that the
respondent's failure to return the original contract, i.e., charter
H
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 527
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
o/ party agreement, could result in undue delay. In an email sent A
at 9:03 a.m. on 14th September, the applicant stated, in
relevant part, that:-
"... You would appreciate that it is imperative for us to have
the charter party with us in order to initiate actions from
various departments such as operations, fleet personnel, B
';
,'.¥ accounts etc to prepare for the said contract and in
absence of this document we are not in a position to push
for same. This will result in last minute hassles and delays.
"
c
22. The respondent's email rejoinder came at 4:31 p.m.
on the same day. The relevant part reads as under:-
"
The CPA of Gal Constructor and Malavya 5 is ready in our
D
office and will be hand over to you.
'"!'
"
23. On September 15th, 2005, the applicant sent the
following email to the respondent. It reads in relevant part as
under:- E
"1. Understand that charter party is ready in your office.
However, we are yet to receive the same and urgently
require it to be circulated among the concerned
departments so that they are prepared for the next contract. F
~'\- Will get in touch with your office again today for the same_
"
24. The respondent faxed a letter dated September 23rct,
2005 to the applicant. The letter asks the applicant to issue
a cheque for the outstanding amount due from the parties' G
Phase I work. It further demands that the applicant grant the
;~
respondent the sole and absolute right to sublet the vessel to
its subcontractor(s) at the agreed charter party rate. It
concludes by saying that the respondent " ... can not conclude
the charter party agreement until the above issue are settled." H
528 SUPREME COURT REPORTS [2008] 12 S.C.R.
h ~~
. A 25. On September 24t , the respondent met with Likpin 1
. Engineers to discuss whether the applicant's vessel could be
converted to perform a riser installation. Likpin surveyed the
vessel on_ 23rd September 2005 and, in the following minutes,
concluded that:- .
B·
"Taking into account the number of problems associated
'(
with the vessel, it is the conclusion of Likpin and IOEC that :¥..
I
the Gal Constructor is not suitable as a riser installation .
. . . the vessel size combined with the limited crane reach ,
cannot be corrected or overcome and hence the vessel
c should not be chart~red for riser installation operations."
26. fn a letter dated September 27th, 2005, the
respondent again asked the applicant to issue a cheque or
remit $186,618. It once again demanded that it be granted
the right to sublet the vessel and that until those issues were
0
settled, it could not conclude the CPA.
27. In a letter dated September 29th, 2005, the
respondent reiterated its demands, namely, that the applicant ::..
remit $186,618 and that it provide the respondent with the
E sole and absolute right to sublet the vessel combination. It
admitted that this payment had nothing to do with Phase 11 of
the project and thus " ... has no connection with the current
negotiations and should be closed out immediately, so that
Phase II can begin on a clean slate." It further stated that:
F " ... the sole and absolute right to sublet the vessel to IOEC
-1·
subcontractors ... is an essential element in IOEC work ·'
plan for Phase II. ... Lack of, or delay in, the ability to
exercise the sublet option will impact on IOEC work plan
and also affect the cost schedule of RSPPM project and
G is not acceptable to IOEC. Please note that time is running
short and in absence of GESCO's immediate compliance ;>---<
with above two requirements IOEC may be compelled to
tal<e recourse to other options .... "
28. The applicant responded to ti1e above with the
H
GREAT OFFSHORE LTD. v. IRANIAN OFFSHOR~ 529
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
o/ following letter dated 30th September 2005. The relevant part A
reads as under:-
"... We are in the process of arranging funds to be remitted
to you against the said amount and will confirm remittance
as soon as possible. 2) Your request for sole and absolute
right to sublet the vessel is not acceptable to us. The LOI 8
'
.~
for the contract has been issued by you on 23rd June 2005
after we mutually agreed on the terms and conditions of
charter party. Thereafter, on your request, we have provided
with you with signed originals of the charter party on 22nd
August 2005 for your signatures. You have accepted the c
same and conformed to us vide your letter communique
dated 14 September that he charter party has been signed
and is ready in your office and will be handed over to us.
Previous to that, you have also sent us letter saying that
you confirm that the charter party will be finalized by 30 D
- ... August 2005. While we have been provided a photocopy
of the signed charter party by your office, it is now 30
September and rather than keeping your commitment and
returning the original and issuing the UC as promised,
you are deliberately delaying the same. E
29. The letter goes on to demand that the respondent
immediately issue the signed, stamped original charter party
agreement as well as the irrevocable line of credit. The
applicant further demanded that both tasks be completed by
1st October at 1200 hours. F
~ '\
30. Vide letter dated 1oth October, the applicant informed
the respondent that the applicant's vessel combination arrived
at P & V Channel, Mumbai on October 6th. Because it had yet
to receive the line of credit, it informed the respondent that it
G
could not proceed further with the mobilization of the vessel
~ "'- combination. The applicant provided the respondent with an
invoice for mobilizing its vessel combination. It gave the
respondent another chance to comply with the purported
contract: "please note that contractual hire will begin as and
H
530 SUPREME COURT REPORTS [2008] 12 S.C.R.
~'+-
A from 0000 hours of the 11th October 2005. We on our party
stand ready and willing to comply with all our obligations."
31. In its October 101h letter, the respondent reiterated
that the terms of the agreem.ent were still under negotiation
and that no contracted had been concluded. It objected to the
B absence of a provision that provided the respondent with the
~
absolute right to sublet the vessel. ¥
32. It also argued that the applicant's vessel combination
was not fit for the agreed purpose. This issue is beyond the
c scope of this decision, which limits itself to deciding whether
or not a contract containing an arbitration clause was formed.
While I have made mention of some of the other issues, such
as whether the vessel was fit for the agreed purpose, I need
riot rehash each and every one. All matters, save for whether
the alleged contract/arbitration clause was formed, would be
D
more appropriately addressed by an Arbitral Tribunal.
-r
33. The letter goes on to state that it would still consider
hiring the applicant's vessel combination if it received the
right to sublet and also if the crane were made fit for the
E purpose for which the respondent intended. On 1ath October,
the respondent sent a letter in which it stated that it would
have to look for a vessel from an alternative provider. The
respondent said that it would treat the matter with the applicant
as "closed." It concluded by asking the applicant to pay the
F amount due for Phase I. It sent a letter on 20th October
reiterating the same. ·/·,
34. On 21st October, the applicant sent a letter detailing
the sequence of events that had occurred between the parties.
Para 5 of the said letter is reproduced as under:-
G
"The Charter Party Agreements, two originals duly signed
and stamped by us, were submitted to your office on 22nd :r-.
August 2005 requesting you to forward us one original
after execution of the same from your side. You never
returned one original for our records. However, your Mr
H
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 531
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
¥
Ali Rahmati had handed over to us a fax copy of the A
formal Charter Party document signed by your Mr.M.
Sabbaghi when we had a meeting with him on 12th
September 2005. A copy of the same is enclosed herewith
for your perusal."
35. In its 25th October letter, the respondent once again B
~
·~·
claimed that the charter party remained unconcluded. It alleged
that the faxed copy of the charter party agreement was "forged
and the story of delivery false and concocted." Moreover, it
stated that "sipce we have found the vessel completely unfit
for riser installation as the said vessel with the present condition c
of the crane is not suitable at all, therefore we thought fit to
withdraw from the negotiation .... " It claimed that the applicant
had misrepresented its vessel's ability to perform a riser
installation. Thus, it thought this misrepresentation had vitiated
the negotiations. At this point, it appeared that their relationship D
--+ had officially soured.
.4,
35. In its letter dated 15th November, the respondent
reiterated much of what is already provided above. Of interest,
it stated that:-
E
"You are aware that initially, we intended to hire the vessel
combination for only 170 days. However, since you agreed
to take barge and AHT from us for 45-55 days, we agreed
to extend the intended hire period from 170 days to 200
days and accordingly in this background the said LOI was F
-"\ issued. However, since thereafter you unilaterally declined
to take our barge and AHT on the ground of difference in
rate levels offered by us, we, in view of the said condition
and in the light of your refusal to accept our barge and
AHT, asked you for absolute subletting right of the said
G
vessels to compensate us/minimize our expenses for risk
:- -;\ of additional days than the originally intended 170 days.
The correspondences which were exchanged between
us make it aptly clear that negotiations and change in
terms and conditions from your side continued even after
H
532 SUPREME COURT REPORTS [2008] 12 S.C.R.
A issuance of LOI and therefore the question of concluding "'-+·
the CPA in respect of RSPPM project phase-II does .not ~~
arise at all."
37. In its December 2nd, 2005 letter, the respondent called _
upon the applicant to arrange for a third party inspection of
8 the applicant's vessel, in order to determine whether or not it
was suitable for riser installation.
38. In response, on 23rd January 2006, the applicant
served the respondent with a notice of arbitration. On 2nd
c February 2006, the respondent replied to the same.
39. With the relevant correspondence 9utlined above, I
turn to the parties' main submissions. The applicant contends,
inter alia, that the faxed copy of the charter party agreement
("faxed CPA") dated 22nd August is a binding, concluded
D contract. The applicant gives four reasons for this assertion.
40. First, the faxed CPA is signed by both parties.
Second, the applicant's statement to this effect was not denied _,.
in the pleadings [See the last page of the respondent's
supplementary written submission of May 13th, 2005: (" ... it
E was not s_igned properly and but for the last page, the said fax
communication, did not bear signature on other page.")
41. Third, the respondent admitted in its letter dated 14th
September that the original CPA" ... is ready in our office and
F will be hand to you." The applicant argues that because the
applicant had already signed the original CPA, there was
nothing left for the respondent to do but sign. Hence, by saying
it was "ready", I may infer that it was signed.
42. Fourth, the respondent's letter of 101h October did
G not deny the fact that the original CPA was signed by the
respondent and was waiting in the respondent's office, even
though the applicant had asserted as much in its letter dated
30th August. It was not until 261h October that the respondent
deemed it necessary to deny this fact.
H
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 533
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
¥ 43. The respondent contends that because the original A
signed copy was never given to the applicant, the parties
were in negotiations at all times. With respect to the faxed
CPA, it points to the fact that the respondent did not sign
every page. It gives further weight to the fact that the faxed
copy was not sent vide fax from the respondent to the applicant; B
I rather, it was first sent vide fax from the respondent's main
)(
office to its local branch.
44. Learned counsel for the respondent states in its written
submission that " ... the respondent failed to even sign the
formal contract document that the applicant had sent to it for c
its signature." It argues that because the original CPA was not
signed by the respondent, the Court will have to find a contract,
if any, in the correspondence. According to Mulla:-
"In construing whether or not a particular agreement does
D
...... or does not amount to a contract, the court would look for
the intention of the parties, the nature of the transaction,
the language employed in the informal agreement and
other relevant circumstances. None of these is conclusive
in itself.... The fact that the parties contemplate that the
letters or an informal agreement would be superceded by E
a more formal one, does not prevent it from taking effect
~s a contract. If the letter of intent is acted upon, especially
for a length of time, the court is likely to hold the parties
bound by the contract." [See Mulla, Indian Contract and
Specific Relief Acts, 13th Edition at pages 317-318]. F
~-\
45. In Dresser Rand S.A. v. Mis. Bindal Agro Chemical
Ltd. & Another, AIR 2006 SC 871 at page 884 at para 34, a
two-Judge Bench of this Court emphasized that whether letters
of intent rise to the level of being a contract hinges on the
G
terms of the letter itself. It observed as under:-
~-
"It is no double true that a Letter of Intent may be construed
as a letter of acceptance if such intention is evident from
its terms. It is not uncommon in contracts involving detailed
procedure, in order to save time, to issue a letter of intent H
534 SUPREME COURT REPORTS (2008] 12 S.C.R.
communicating the acceptance of the offer and asking
~
A
~
the contractor to start the work with a stipulation that the
detailed contract would be drawn up later. If such a letter
is issued to the contractor, though it may be termed as a
Letter of Intent, it may amount to acceptance of the offer
B resulting in a concluded contract . . . . But the question
whether the letter of intent is merely an expression of I
¥-
intentic?n to place an order in future or whether is a final
acceptance of the offer thereby leading to a contract, is
a matter that has to be decided by reference to the terms
c of the letter. "
[Emphasis added].
46. The respondent's main submission is that it never
actually concluded a contract and that, if anything, the applicant
mistakenly thought that the respondent's LOI of 23rd June was
D
an offer. Why else would the applicant have sent its acceptance ~·
on 4th? Its attack against the LOI as a contract is two-fold.
First, it argues that the parties cannot leave a major piece of
~
the contract open for future negotiation. Second, it contends
that the parties were not eye-to-eye, or ad idem on the points.
E
47. According to the respondent, the applicant's
assumption that the respondent's 23rd June LOI read with the
applicant's 4th August letter is misplaced. The LOI of 23rd
June read with the applicant's letter of 4th August does not
F form a contract because a contract cannot leave a major part
of its terms open to future negotiation. The respondent relies +.
on May & Butcher Limited v. The King (1934) 2 KB 17, for
the proposition that an agreement in which some critical part
of the contract matter is left undetermined is no contract at all.
G 48. In its assertion that the applicant's LOI of 23rd June
was conditional, it points to the following language from the
~
same LOI: "this agreement is subject to IOEC providing a
suitable barge and AHT acceptable to GE Shipping for a
period of 45-55 days on mutually agreed rates for
H commencement between 25tn October and 1oth November 05
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 535
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
for BHN MOL project works." The respondent's supplying the A
barge to the applicant for 45-55 days went unmet when the
applicant said it would not need this barge.
49. In addition, the respondent argues that this condition
was material to the contract, as evidenced by the fact that the
respondent only agreed to increase the duration of the work B
~ from 170 to 200 days if it got paid for supplying the barge. By
doing so, the respondent was attempting to offset the costs it
would incur by having the applicant's vessel combination for
an extra 30 days.
c
50. Furthermore, the respondent claims that no contract
could arise from its LOI of 23rd June because the parties were
not ad idem, i.e., in agreement on each point. Along these
lines, Chitty on Contracts [29th Edn. Vol.1 at page 134] has
observed:-
D
~ "When parties carry on lengthy negotiations, it may be
difficult to say when and whether a contract has been
.,. concluded. The court must then look at the whole
correspondence and decide, whether on its true
11
construction, the parties had agreed to the same terms. E
51. In Mis. Rickmers Verwaltung Gimb H v. Indian Oil
Corporation Ltd., AIR 1999 SC 504 at page 509 para 12, this
Court reiterated this stand: "Unless from the correspondence
it can unequivocally and clearly emerge that the parties were
ad idem to the terms, it cannot be said that an agreement had F
come into existence between them through correspondence."
[See also: Dresser Rand S.A. v. Mis. Bindal Agro Chemical
Ltd. & Another, AIR 2006 SC 871 at page 879 para 21
(affirming the same)]
G
52. The respondent argues that they were still negotiating
the terms and conditions. It cites to its letter of 13th August
and the applicant's letter of .22nd August as evidence of
continued negotiations. In the respondent's letter dated 13th
August, it suggests that a number of changes be made to the
H
536 SUPREME COURT REPORTS (200~] 12 S.C.R.
A "new draft contract." [emphasis added]. "Draft" suggests that ...
nothing had been finalized. Moreover, the letter lists a number
of issues that were still open to negotiation. The applicant's
letter of 22nd August, however, addressed the proposed
changes.
B~
53. The respondent concedes that while it.said it would
sign and finalize the contract by 30th August, it changed its
mind on 27th August and conveyed the message that it would
not enter the agreement until all outstanding issues were
resolved.
c
54. Like the applicant's counsel, the respondent also
makes use of the fact that the applicant did not object to the
respondent's letter dated 13th August. The applicant should
have said that there was no question of finalizing the contract
when it had already been finalized. I note that this argument
0
seems unfair because the applicant could not have gotten the
faxed CPA from the respondent until ath September at the
earliest, as that is the date that appears on the fax. According
to the applicant, it received the faxed copy on 12th September.
E 55. Of course, all of the respondent's arguments become
moot if the faxed CPA dated 22nd is valid. In the instant case,
the burden to prove that a valid contract containing an
arbit~ation clause existed first rested on the applicant, as it
was the applicant that was moving this Court. However, upon
F producing the faxed CPA that, on its face, appears legitimate,
the onus shifted to the respondent to prove that it was forged.
It appears, prima facie, to be legitimate because it bears
the heading "08-SEP-2005 13:52 FROM IOEC HEAD OFFICE
TO ALLAHVERDI" (hereinafter the "fax header"). This is an
G important piece of evidence that mal<es its genuineness more
probable than not. Hypothetically, the applicant could have
fabricated the fax header. But that is highly unlikely and
presumes much more than what is expected in normal human
conduct especially when that conduct concerns the forgery of
H an executive officer's signature. It should not be forgotten that
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 537
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
+I
this case is between sophisticated companies, not warring A
family members that dispute the authenticity of a will.
-
56. The respondent could argue that it handed over an
unsigned copy of the faxed CPA and that the applicant forged
it after the fact. Such an assumption is equally dubious. Why
would the respondent go through the trouble of returning the B
~ applicant's August 22nd CPA unsigned, when it had been
routed vide fax through its Head Office?
57. There is no evidence to suggest that the faxed CPA
was forged. To the contrary, the evidence we do have is the c
faxed CPA bearing the parties' signatures coupled with
correspondence between the parties. The correspondence,
as it is more than just a pleading, adds additional weight to
the applicant's story. The applicant's letter of 21st October
corroborates the allegation that Ali Rahmati delivered the faxed
D
~
CPA to the applicant on 12th September. The date of delivery
of 12th September fits the timeline provided on the fax header,
as the respondent could only have delivered the faxed CPA
~
after ath September. Moreover, it appears that having received
the faxed CPA on 12th September, the applicant was prompted
to ask for the original vide email on 14th September. Once E
again, the dates match up.
58. The fax header, on its face, suggests that the
document is genuine. This conclusion is bolstered by the
above-mentioned correspondence. Thus, I find that the F
-·-\ applicant had discharged its initial burden of sufficiently proving
that the faxed CPA was not forged. The onus shifted to the
respondent to prove that its signature was forged. With no
evidence to support its assertion, the resp.ondent cannot
discharge its onus. Therefore, I find that the faxed CPA is
G
legitimate and is not a product of forgery. As such, I need not
~.. f.
look for the existence of a contract on the basis of the LOI of
23rd June.
59. The question then becomes whether the faxed CPA
is valid under the r€=!1evant law. Here, the purported contract H
538 SUPREME COURT REPORTS [2008] 12 S.C.R.
A provides that the Arbitration and Conciliation Act, 1996 (26 of
1996) is to be used. (page 3 of faxed CPA dated 22 August
2005]. In the preceding contract the same Act was used.
Therefore, it comes as no surprise that the parties have not
objected to the same in the instant case.
B 60. Section _7 of the Arbitration and Conciliation Act, 1996
(26 of 1996) provides:
(1) In this part, "arbitration agreement" means an
agreement by the parties to submit to arbitration all
c or certain disputes which have arisen or which may
arise between them in respect of a defined legal
relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an
arbitration clause or in the form of a separate
D agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is
contained in- ·
E (a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or
other means of telecommunication which
provide a record of the agreement; or
F (c) an exchange of statements of claim and defence
in which the existence of the agreement is
alleged by one party and not denied by the other.
(5) The reference in a contract to a document containing
an arbitration clause constitutes an arbitration
G
agreement if the contract is in writing and the
reference is such as to make that arbitration clause
part of the contract.
61. Section 7 squarely deals with the present controversy.
H This Court has taken note of Section 7(3) & 7(A)(a)'s
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 539
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
-;.-'
requirement that the arbitration agreement be in writing and A
signed by the parties. According to the learned counsel for
the applicant, affixing a seal under section 7 of the Act is not
a requirement. [See: Bihar Stale Mineral Development
Corporation & Another v. Encon Builders (1) (P) Ltd., (2003)
7 sec 418 at page 423 para 13 (one of the essential B
I elements of an arbitration agreement is that "the parties must
'ii;
agree in writing to be bound by the decision of such tribunal.")
and K.K. Modi v. K.N. Modi & Others, (1998) 3 SCC 573 at
page 585 para 21 ("there are, of course, the statutory
requirements of a written agreement . . . . Vide Section 2 c
Arbitration Act, 1940 and Section 7 Arbitration and Conciliation
Act, 1996.")
62. The respondent makes much of the fact that the "faxed
CPA" of August 22nd is (1) a copy, not the original; (2) is
stamped by one, not by both parties; (3) one of the parties did D
-~
not sign every page; and (4) it was first sent vide fax.
63. Section 7 defeats all four assertions. First, there is
no requirement that the arbitration agreement be an original.
Where the statute has gone to great lengths to define exactly
what is meant by the term "in writing," we are precluded from E
adding another term to definition. Indeed, "it is contrary to all
rules of construction to read words into an Act unless it is
absolutely necessary to do so." [See: Justice G.P. Singh's
Principles of Statutory Interpretation, 11th Edition, 2008, at
page 62.63, citing to Renula Bose (Smt.) v. Rai Manmathnath F
---\-
Bose, AIR 1945 PC 108, p. 110; Stock v. Frank Jones (Tiptan)
Ltd., (1978) 1 All ER 948, p.951; Assessing Authority-Cum-
Excise and Taxation Officer, Gurgaon &Another v. East India
Cotton Mfg. Co. Ltd.,. Faridabad (1981) 3 SCC 531].
G
64. An exception to this rule can be made. But before
_. -l. adding words to a statute, " ... the Court must be abundantly
clear of three matters: (1) the intended purpose of the statute
or provision in question, (2) that by inadvertence the draftsman
and Parliament failed to give effect to that purpose in the
H
ff
540 SUPREME COURT REPORTS [2008] 12 S.C.R.
A provision in question; and (3) the substance of the provision
'-+·
Parliament would have used, had the error in the Bill been
noticed." [See: Justice G.P. Singh's Principles of Statutory
Interpretation, 11th Edition, 2008 at page 75 citing to Inca
Europe Ltd. v. First Choice Distribution (a firm) (2000) 2 All
B ER 109, at page 115 (HL)]. As I mention below, one of the
main objectives of the Arbitration and Conciliation Act, 1996 jj
is to minimise the role of the Court; adding additional
requirements to the Act is antithetical to such a goal.
65. Second, the plain language of Section 7 once again
c governs my conclusion. Section 7 does not require that the
parties stamp the agreement. It would be incorrect to disturb
the Parliament's intention when it is so clearly stated and
when it in no way conflicts with the Constitution.
66. Third, nothing in Section 7 suggests that the parties
D
must sign every page. Once again, if I take the respondent's
argument to its logical conclusion, I would have no choice but
to read language into the Act that is not there. Even if the ~·
faxed CPA is construed as a "document," it need only be
"signed by the parties" pursuant to Section 7(4)(a). Every page
E does not need to be signed. If it is considered a "document,"
then this requirement would be met. As established above,·
both parties signed the faxed CPA in the signature box at the
bottom of Part I. That said, the faxed CPA more closely fits
within Section 7(4)(b)'s requirements.
F -j-,_ I
67. Fourth, Section 7(4)(b) states that an agreement is
in writing if it is contained in "an exchange of letters,. telex,
telegrams or other means of telecommunication which
provide a record of the agreement." .This section covers
agreements that are sent via facsimile ("fax") as they are "other
G
means of telecommunication". "Fax" is defined as "a machine
)r-·
that scans documents electronically and transmits a
photographic image of the contents to a receiving machine by
telephone line" or "a document received by such a machine."
[See: Chambers 21st Century Dictionary, Allied Publisher's
H
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 541
ENG'. & CONST. COMPANY [DALVEER BHANDARI, J.]
+' Limited (1996)]. This definition clearly provides that a fax falls A
under "other means of telecommunication." Thus, faxed
agreements are acceptable under Section 7 of the Act.
68. Section 7(4)(b) further requires us to ask whether a
record of the agreement is found in the telecommunication, in
this case a fax. What could be a better record of the agreement B
!
)f: than the signatures of the parties themselves? As noted above,
with no evidence to indicate that the respondent's signature
was forged, the faxed CPA stands on its own as the record
of agreement. Likewise, Section 7(4)(b) stands satisfied.
c
69. The court has to translate the legislative intention
especially when viewed in light of one of the Act's "main
objectives": "to minimise the supervisory role of Courts in the
arbitral process. [See: Statements of Objects and Reasons of
Section 4(v] of the Act].
D
.'-1 70. If this Court adds a number of extra requirements
such as stamps, seals and originals, we would be enhancing
our role, not minimising it. Moreover, the cost of doing business
1 would increase. It takes time to implement such formalities.
What is even more worrisome is that the parties' intention to E
arbitrate would be foiled by formality.
71. Such a stance would run counter to the very idea of
arbitration, wherein tribunals all over the world generally bend
over backwards to ensure that the parties' intention to arbitrate
is upheld. Adding technicalities disturbs the parties' "autonomy F
~- of the will" (I' autonomie de la volonte), i.e., their wishes. [For
a general discussion on this doctrine see Law and Practice
of International Commercial Arbitration, Alan Redfern and
Martin Hunter, Street & Maxwell, London, 1986 at pages 4
and 53]. G
._.. A 72. Technicalities like stamps, seals and even signatures
are red tape that have to be removed before the parties can
get what they really want - an efficient, effective and potentially
· cheap resolution of their dispute. The autonomie de la volonte
H
.• .. ·~
542 SUPREME COURT REPORTS [2008] 12 S.C.R.
A doctrine is enshrined in the policy objectives of the United
Nations Commission on International Trade Law ("UNCITRAL")
Model Law on International Commercial Arbitration, 1985, on
which our Arbitration Act is based. [See Preamble to the Act].
The courts must implement legislative intention. It would be
B improper and undesirable for the courts to add a number of
extra formalities not envisaged by the legislation. The courts
directions should be to achieve the legislative intention. The
courts must implement legislative intention. It would be
improper and undesirable for the courts to add a number of
c extra formalities not envisaged by the legislation. The courts
directions should be to achieve the legislative in!ention.
73. One of the objectives of the UNCITRAL Model Law
reads as under:-
"the liberalization of international commercial arbitration
D
by limiting the role of national courts, and by giving effect
to the doctrine "autonomy of will," allowing the parties the
freedom to choose how their disputes should be
determined." [See Policy Objectives adopted by
UNCITRAL in the preparation of the Model Law, as cited
E in Law and Practice of International Commercial
Arbitration, Alan Redfern and Martin Hunter, Street &
Maxwell, London (1986) at page 388 (citing U~ doc.A/
CN.9/07, paras 16-27].
F 74. It goes without saying, but in the interest of providing
the parties a comprehensive review of their arguments, I note
that once it is established that the faxed CPA is valid, it follows
that a valid contract and a valid arbitration clause exist. This
contract, the faxed CPA, does not suffer from a conditional
G clause, as did the Letter of Intent. Thus, the respondent's
argument that the parties were not ad idem must fail.
75. I have heard the learned counsel appearing for the
applicant and the respondent at length. I have carefully reviewed
the entire correspondence between the parties. The charter
H party agreement that had been signed by the applicant and
'\
GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 543
ENG. & CONST. COMPANY [DALVEER BHANDARI, J.]
~-
the respondent clearly indicated that the parties have entered A
into a valid and concluded contract. The other correspondence
between the parties also leads to a definite conclusion: the
parties have entered into a valid contract containing an
arbitration clause. Since a dispute has arisen between the
applicant and the respondent, it needs to be referred to the B
I
arbitrator.
Jt
76. On consideration of the totality of the facts and
circumstances, I am clearly of the opinion that the applicant is
entitled in law to an order for appointment of a sole arbitrator.
Consequently, I request Hon'ble Justice S.N. Variava, the c
retired Judge of the Supreme Court, to accept this arbitration.
The learned arbitrator would be at liberty to fix his own fee. I
direct the parties to appear before the learned arbitrator on
81h September, 2008 or any date convenient to the learned
arbitrator. D
·-< 77. Before parting with this arbitration petition, I would
like to make it abundantly clear that the learned arbitrator
shall not be bound by any observations which have been made
in this judgment. The observations have been made only to
decide this arbitration petition. E
78. The Registry is directed to communicate this order
to the learned arbitrator to enable him to enter upon the
reference and decide the matter as expeditiously as
practicable.
.... 79. Consequently, this arbitration petition is allowed and
F
disposed of. In the peculiar facts and circumstances of this
case, I direct the parties to bear their own costs.
D.G. Petition allowed.
G
....
4.
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