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Arbitration & Commercial LawSupreme Court of India

M/S. Trans Asian Shipping Services (Pvt.) Ltd. v. M/S. Beacon Shipping Lines Ltd.

Arbitration Petition (Civil) · 2018 INSC 831Decided 19 Sept 2018
Arbitration Petition (Civil) No. 20 of 2012
Chief Justice Dipak Misra · Justice A.M. Khanwilkar · Dr. Justice D.Y. Chandrachud

Background

Trans Asian Shipping Services, an Indian shipping company, had an agency agreement with Bangladesh-based Beacon Shipping Lines for combined transport operations under the "Trans Asia Line" banner. After the agreement (renewed from March 2010) was terminated in March 2012, Trans Asian alleged Beacon breached several terms of the agreement and owed it over USD 134,875. When Beacon failed to respond to Trans Asian's notice invoking the agreement's arbitration clause, Trans Asian approached the Supreme Court directly under Section 11(9) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator.

Decision Breakdown

The respondents did not appear despite being served notice. The Court examined the agreement's governing-law and dispute-resolution clauses (Clauses 18 and 19), finding they clearly provided that any unresolved dispute arising out of the agreement would be determined by arbitration under Indian law. Since a genuine, unsettled dispute existed and a valid arbitration clause covered it, the Court allowed the petition and appointed Justice Gyan Sudha Misra, a former judge of the Supreme Court, as the sole arbitrator to decide the dispute between the parties, with no order as to costs.

Lesson Learnt

When a contract contains a clear arbitration clause and one party refuses to engage in appointing an arbitrator, the other party is not left remediless: it can approach the Supreme Court (for cases falling under Section 11(9), involving international commercial arbitration) or the relevant High Court under Section 11 of the Arbitration Act to have an arbitrator appointed and the dispute resolved.

M/S. Trans Asian Shipping Services (Pvt.) Ltd. v. M/S. Beacon Shipping Lines Ltd. – Legal Case Shots | LegalAware