Devinder Gupta ( 1 ) M/s Bharat Starch Industries Ltd. (hereinafter REFERRED TO as the plaintiff ) has preferred a suit, being suit No. 2788/94, against four defendants. The first two defendants are M/s Prudent International Shipping and Trading Company Ltd. , and M/s Andagro Services Pvt. Ltd. (hereinafter REFERRED TO as defendants 1 and 2 respectively ). The other two are the London Maritime Arbitrators. Association and Mr. J. A. Schofield, the arbitrator. Decree for declaration prayed for by the plaintiff in the suit is to the effect that there is no privity of contract between the plaintiff and defendant No. 1 and consequently there does not exist any arbitration agreement between the plaintiff and defendant No. 1. As aconsequence to this it is prayed that defendant No. 3 has no jurisdiction to entertain any arbitration proceedings and award, if any rendered by defendant No. 4 would be illegal and nullity. Decree for injunction has been claimed restraining defendants 3 and 4 from proceeding against the plaintiff on the basis of the alleged agreement between the plaintiff and defendant No. 1. Decree for injunction is also claimed against defendant No. 1 not to go ahead with the arbitration proceedings stated to have been commenced before defendants 3 and 4. ( 2 ) ALONG with the suit, the plaintiff filed an application under Order 39 Rules 11 and 2 of the Code of Civil Procedure (IA 10655/94) claiming ad interim injuction retraining defendant No. l from enforcing the arbitration agreement and against defendant No. 4 from proceeding further with the arbitration or to pronounce any award in pursuance thereto. ( 3 ) SUMMONS in the suit and notice in IA 10655/94 were issued against the defendants for 16. 1. 1995 on which date a statement was made on behalf of defendant No. 1 that defendant No. 1 intends to move an application under Section 3 of the Foreign Award (Recognition and Enforcement) Act, 1961 (Act 45 of 1961) (hereinafter REFERRED TO as the act .) On 24. 1. 1995, a petition under Section 3 of the Act (OMP No. l3/95) was moved by defendant No. 1 praying for staying the proceedings in the, suit. Plaintiff and defendants 1 and 2 have exchanged their affidavits in IA 10655/94 and in OMP 13/95 and have also placed on record number of documents. 1. 1995, a petition under Section 3 of the Act (OMP No. l3/95) was moved by defendant No. 1 praying for staying the proceedings in the, suit. Plaintiff and defendants 1 and 2 have exchanged their affidavits in IA 10655/94 and in OMP 13/95 and have also placed on record number of documents. Counsel for the parties were heard at length by me on the question whether proceedings in the suit, in terms of Section 3. of the Act are or are not liable to he stayed and on the question whether the plaintiff is entitled to the grant of temporary injunction during the pen dency of the suit. ( 4 ) PLAINTIFF s case is that defendant No. 2 placed a purchase order on the plaintiff for supply of 10400 M. Tonnes (10% more or less) Indian yellow maize in bulk shipment from India at US $ 128 per M. Tonne. Defendant No. 2 had contracted with one Bakhtaran Danesh and Co. in Iran to supply the same product at US $ 165 per M. Tonne. Plaintiff, thus, supplied to Bakhtaran Danesh and Co. on account of defendant No. 2 by shipment from India to Bandar Imam Khomeinci and received the sale price from Bakhtaran Danesh and Coat US $165 per M. Tonne. Defendant No. 2 raised a debit note on plaintiff for reimbursement of the difference between the contracted price and the selling price. Thus, on the one hand there was a contract of purchase and sale between the plaintiff and defendant No. 2 and on the other hand between defendant No. 2 and Bakhtaran Danesh and Co. There was no privity of contract between the plaintiff and Bakhtaran Danesh and Co. For and on behalf of defendant No. 2 the plaintiff made supply to Bakhtaran Danesh and Co. Defendant No. 2 informed the plaintiff that the supply had to be shipped on a ship known as Prudent Voyager , belonging to defendant No. 1. There was also no privity of contract between the plaintiff and defendant No. 1. A notice dated 25. 8. Defendant No. 2 informed the plaintiff that the supply had to be shipped on a ship known as Prudent Voyager , belonging to defendant No. 1. There was also no privity of contract between the plaintiff and defendant No. 1. A notice dated 25. 8. 1994 was served on the plaintiff on behalf of defendant No. 1 by which the plaintiff was called upon to pay demurrage with interest thereupon stating that the ship M. V. Prudent Voyager had been chartered for a voyage from Kakinada, Andhra Pradesh, to Bandar Imam Khomeine Iran for carriage of cargo of Indian yellow maize. Subsequently another notice was received by the plaintiff from Zaiwalla and Co. , London, served on behalf of defendant No. 1, referring to a charter party dated 22. 4. 1994 slating therein that they had been appointed to commence arbitration proceedings in terms of Clause 29 of the charter party. The plaintiff was invited to appoint an arbitrator from amongst the members of the London Maritime Arbitrators Association within three days. Another fax message dated 23. 2. 1994 was received by the plaintiff informing that Johan A. Schofield, a member of London Maritime Association, has been appointed as an arbitrator by defendant No. 1. The plaintiff was given seven days lime to nominate its arbitrator failing which it was staled in the notice that arbitration proceedings would proceed ex parte, In this background, the plaintiff claimed the decree aforementioned alleging that there has been no privity of contract between the plaintiff and defendant No. 1 and, thus, there is no question of any arbitration between the plaintiff and defendant No. 1. No charter parly has been signed, between the plaintiff and defendant No. 1 or by any person on behall of the plaintiff. The procedings for arbitration are without any basis and are without jurisdiction. ( 5 ) CASE of defendant No. 2 in OMP 13/95 is that the ship M. V. Prudent Voyager was chartered for carriage of male in bulk from Kakinada to Bandar Imam Khomeinei in Iran on the basis of a charter party dated 22. 4. 1994 which was negotiated and signed for and on behalf of the plaintiff by defendant No. 2 who was the plaintiffs agent and was authorised to sign the charter parly. In pursuance to the charter party, ship owned by defendant No. 1 had proceeded to Kakinada and loaded 9751. 4. 1994 which was negotiated and signed for and on behalf of the plaintiff by defendant No. 2 who was the plaintiffs agent and was authorised to sign the charter parly. In pursuance to the charter party, ship owned by defendant No. 1 had proceeded to Kakinada and loaded 9751. 950 M. Tonnes of yellow mai/e and proceeded to Bandar Imam Khomeinei Iran where the cargo was dis charged. It was completed on 13. 7. 1994. Demurrage in terms of clause 25 of the charier parly was to he settled within 20 days after completion ofdischarge and it was the plaintiff, under the terms of the charier party, who was fully responsible for settlement of demurrage. Defendant No. 1 on 15. 7. 1994 duly informed defendant No. 2, who had negotiated and signed the char ter party, for and on behalf of the plaintiff and acted on plaintiffs behalf as an agent for the claim for demurrage. A request was made to arrange for the payment. On failure and neglect on the part of the plaintiff to make payment, defendant No. 1 through their London Solicitor Zaiwalla and Co. invoked the arbitration clause 29 contained in charter party through their fax message dated 15. 11. 1994 and also appointed J. A. Schofield as their arbitrator of which notice was duly served upon the plaintiff calling upon the plaintiff to either appoint its arbilralor or agree to the arbitrator appointed by defendant No. 1 as the sole arbitrator. On failure of the plaintiff to appoint any other arbitrator, j. A. Schofidd has entered upon the reference and defendant No. 1 has also submilled its points of claim before the sole arbitrator. Plaintiff through its fax message dated 29. 11. 1994 falsely laid a claim that it had not signed the charier parly agreement and, therefore, the arbitration proceedings were not binding upon the plaintiff. Defendant No. 1 in its petition has narrated facts and circumstances on the basis of which it is claimed that the plaintiff is a parly to the arbitration agreement and is hound by the same. Plaintiff is also bound by clause 29 of the charier party, which contains an arbitration agreement and since suit has been filed in respect of matters agreed to be REFERRED TO arbitration, in terms of arbitration clause, proceedings in the suit are liable to be stayed. Plaintiff is also bound by clause 29 of the charier party, which contains an arbitration agreement and since suit has been filed in respect of matters agreed to be REFERRED TO arbitration, in terms of arbitration clause, proceedings in the suit are liable to be stayed. ( 6 ) IT is not in dispute that there is nothing in the general law of arbitration, either English or Indian, which prevents the arbitrators or an umpire from deciding questions of their own jurisdiction provisionally or tentatively and to proceed to make their awards on that basis. Such a provisional or tentative decision on questions of their own jurisdiction would be subject to the final determination by the Court and if the Court lakes a contrary view, their award will not be given effect to. In Renusagar Power Co. Ltd. v. General Electric Company and another ( AIR 1985 SC 1156 ) while considering the scheme of the Act vis-a-vis Arbitration Act, 1940, it was held that Sections 3 and 7 of the Act read together disclose a scheme that so far as the question of existence, validity and effect (scope) of the arbitration agreement are concerned, the determination thereof by the Arbitrators is also subject to the decision of the court. This decision of the court can be had either before the Arbitration proceedings commence or during their pendency. If an occasion to decide the question of arbitrator s jurisdiction arises at an earlier stage, namely, in a petition under Section 3 of the Act, the court has to decide it before granting slay of the legal proceedings and such a decision of the court on that question will be conclusive and binding upon the arbitrator. It was held: ". . . ON a combined reading of Ss. It was held: ". . . ON a combined reading of Ss. 3 and 7 of the Foreign Awards Act clearly contemplates that questions of existence, validity or effect (scope) of the aibitration agreement itself, in cases where such agreement is wide enough to include within its ambit such questions, may he decided by the arbitrators initially but their determination is subject to the decision of the Court and such decision of the Cdourt can be had eithor before the arbitration proceedings commence or during their pendency, if the matter is decided in a Section 3 petition or can he had under S. 7 after the award is made and filed in the Court and is sought to be enforced by a party thereto. In the face of such scheme envisaged by the Foreign Awards Acl which governs this case it will be difficult to accept the contention that the arbitrators will have no jurisdiction to decide questions regarding the existence, validity or effect (scope) of the arbitration agreement. In fact the scheme makes for avoidance of dilatory tactics on the part of any party to such agreement by merely raising a plea of lack of arbitrator s competence and a frivolous plea at that and enable the arbditrator to determine the plea one way or the other and if negatived or proceed to make his award with the further safeguard that the Court would be in a position to enetertain and decide the same plea finally when lhe award is sought to be enforced. All that condition (iii) of S. 3 requires is that the legal proceedings must he in respect of a matter agreed to he REFERRED TO the arbditralion and there is no warrant to add further words, namely, agree to he REFERRED TO the arbitration for final determination . Obviously if the occasion to decide the question of arbitrator s jurisdiction arises at an earlier stage, namely, in a Section 3 petition the Court has to decide it before granting stay of the legal proceedings and such decision of the Court on that question will he conclusive and binding on the arbitrator and the question before him will then become academic. It is thus clear that under the scheme questions of existence, validity or ef- fect (scope) of the arbditration agreement itself, in cases where the arbitration clause embraces within the Court in a Section 3 petition) could be initially determined by the arbitrators, which would be subject to the final decision of the Court. " SINCE defendant No. 1 in this case has moved a petition for stay of the suit, which petition has been made before filing written statement or taking any other step in the legal proceedings, it has become necessary to adjudicate upon the existence, validity or effect (scope) of the arbitration agreement, which is also the main scope of the suit. Unlike Section 34 of the Arbitration Act, 1940, there is no discretion upon the court, Once conditions as are contained in Section 3 of the Act are fulfilled, it is obligatory on the part of the court to order stay of the procedings commenced by a party to the agreement in respect of the matters agreed to be REFERRED TO arbitration. The conditions which are required to be fulfilled for invoking Section 3 of the Act as noticed in Renusagar s case (supra) are: " (I) there must be an agreement to which Article II of the Convention set forth in the Schedule applies; (II) a parly to that agreement must commence legal proceedings against another party thereto; (III) the legal proceedings must be in respect of any matter agreed to be REFERRED TO arbitration in such agreement; (IV) the application for stay must be made before filing the written statement or taking any other step in the legalproceedings; (V) the Court has to be satisfied that the agreement is valid, operative and capable of being performed; this relates to the satisfaction about the existence and validity of the arbitration agreement; and. . (VI) the Court has to be satisfied that there are disputes between the parties with regard to the matters agreed to be referred; this relates to effect (scope) of the arbitration agreement touching the issue of arbitrability of the claims. " IN the instant case, adjudication is required by the partics on the first and fifth conditions. Other conditions are not in dispute. " IN the instant case, adjudication is required by the partics on the first and fifth conditions. Other conditions are not in dispute. ( 7 ) AS noticed above, the plaintiffs case is that the charter party has neither been signed by it nor by any other person on its behalf whereas the case of the defendant No. 1 is that the charter party has been signed by defendant No. 2 on behalf of the plaintiff. Existence of charter party is not in dispute. In order to appreciate the respective contentions, reference will have to be made to a number of documents on which reliance has been placed by the parties. ( 8 ). The first in point of time is the fax message dated 20. 1. 1994 from the plaintiff to one Mr. S. Bhaskar confirming the points discussed with J. F. Andrist, a representative of defendant No. 2, for export of yellow maize in bulk from Kakinada. On 2. 3. 1994. Paul Mcgowan of defendant No. 2 wrote to the plaintiff and confirmed having purchased from the plaintiff 12000 MT Indian yellow maize at US D 130 - FAS (All loading costs for the account of buyer ). Paul Mcgowan, while thanking the plaintiff for the first business, stated: "my BUYERS ARE INTERESTED FOR FURTHER 10,000 mt". . . . "advise AT WHAT PRICE WE CAN WORK". In continuation of the earlier message, on 3. 3. 1994 another communication was sent to the plaintiff by Paul mcgowan informing that Bank Saderat Iran will open letter of credit in plaintiffs favour. Plaintiff was asked to inform the complete address of its banker so that the same be passed on to the buyer in Iran. On 9. 3. 1994, on the request of the buyer in iran, namely, M/s Bakhtaran Danesh Co. , letter of credit was opened with Saderat bank, Tehran. Plaintiff s name is shown as the beneficiary therein. On 14. 4. 1994 Paul mcgowan, on behalf of defendant No. 2, sent another fax message to the plaintiff confirming that purchase price for the contract has been amended from US $ 130 FAS to read $ 128. 00 FAS Kakinada. ( 9 ). Memorandum of understanding dated 14. 4. 1994 is between the plaintiff and defendant No. 2. On 14. 4. 1994 Paul mcgowan, on behalf of defendant No. 2, sent another fax message to the plaintiff confirming that purchase price for the contract has been amended from US $ 130 FAS to read $ 128. 00 FAS Kakinada. ( 9 ). Memorandum of understanding dated 14. 4. 1994 is between the plaintiff and defendant No. 2. Admittedly this memorandum of understanding is signed on behalf of defendant No. 2 but is not signed on behalf of the plaintiff. Effect of plaintiffs not signing will be considered later. This memorandum of understanding is an important document on which parties have made submissions and is being quoted as under: " Memorandum of Understanding this memorandum of understanding is mutually agreed upon between m/s ANDAGRO SERVICES (P) LTD. 501, Dalamal House, nariman Point bombay-400021and M/s BHARAT STARCH INDUSTRIES LTD. 510-515, Deep Shikha Building, 8, Rajendra Place, new Delhi-110008 THAT M/s Andagro Services (P) Ltd. , will procure an order of 10,400 M. T. (Ten Thousand Four Hundred Metric Tonnes) of Indian Yellow Mai/e for m/s Bharat Starch Industries Ltd. for shipment to Iran on the following terms and conditions:- 1. PRODUCT : Indian Yellow Maizein Bulk. 2. OUANTITY: 10,400 M. T. (Ten Thousand Four Hundred Metric Tonnes) 10 Percent MOL Andagro s Option. 3. PRICE: US $ 165 (United States Dollars One hundred Sixty Five only) pmt CNFFO Iran 4. SHIPMENT: March upto and including 20. 05. 94 5. PAYMENT: L/c at sight under ACU Mechanism. The contract will be executed on the following basis A. M/s Bharat Starch Industries Ltd. has agreed to supply the entire contracted quanility (a) USD 128 PMT FAS KAKINADA. Bharat Starch will be fully responsible for arranging the contracted quantity as per the quality specifications and tendering the same duly inspected and fumigated by S. G. S. India ready for shipment 7 days prior to the arrival of the vessel at load port. The cost of Fumigation and pre and Post shipment inspection is to the a/c of M/s Bharat starch Industries Ltd. B. M/s Andagro Service (P) Ltd. will arrange for a letter of credit on the cnffo basis in favour of M/s Bharat Starch Industries Ltd. C. M/s Andagro Service (P) Ltd. will charter the vessel on behalf of M/s bharat Starch and the entire responsibility of performing as per the charter party will be on M/s Bharat Starch. M/s Andagro Services will not be responsible for any dead freight, demurrage and or any other cost and consequences as per the charter party, jlk Demurrage, dead freight etc. , if any, will be settled by Bharat Starch directly with the shipping company. D. M/s Bharat Starch Industries will pay to M/s Andagro Service Pvt. Ltd. the difference between the Invoice value ol the documents and the contracted FAS value of the goods in India in Indian- Rupees immediately on completion of the shipment alter deducting the following: - - Freight amount paid to the shipping company as per the charier parly.- Stevedoring Charges paid on behalf of Andagro Services P. Ltd.- The difference in the cost between methyl bromide fumigation and aluminium phsphide fumigation. E. Export documentation and presentation of the documents as per the 1/c will be the responsibility of M/s Bharat Starch Industries Ltd. In witness whereof this MOU has been drawn in duplicate and both the parlies to this MOD have affixed their signalures thereto. For Andagro Services (P) Ltd. SD/- aulhorised Signatory for Bharat Starch Industries Ltd. Aughorised Signatory" ( 10 ). Through fax dated 21. 4. 1994 Paul Mcgowan had informed the plaintiff that the ship owners had expressed iheir inability to give freight at US $ 15 per M. Tonne, therefore, he was arranging to get the leller of credil amended to usual freightat US $ 23 per M. Tonne. The plaintiff was asked to instruct its clearing and forwarding agent to make necessary changes and was also asked to give details of its clearing and forwarding agent at Kakinada so as to enable defendant No. 2 to inform SGS for preshipment inspection. The letter reads:- "we HAD DISCUSSIONS WITH THE SHIP OWNERS AND THEY expressed THEIR INABILITY TO GIVE FRT @ USD 15/- PMT hence WE ARE ARRNAGING TO GET THE L/c AMENDED TO show FRT US D 23/- PMT. KINDLY INSTRUCT YOUR CLEARING AND FORWARDING agent TO MAKE THE GR1 ACCORDINGLY I. E. CNF VALUE usd 165 PMT prt USD 23 PMT fob VALUE USD 142 PMT we EXPECT TO FINALISE MV PRUDENT VOYAGER ARRIVAL 24th APRIL. TO COMMENCE LOADING ON 25th APRIL. WILL revert AS SOON AS SAME FINALISED. KINDLY GIVE DETAILS OF YOUR CLEARING AND FORWARDING agent IN KAKINADA ENABLE INFORM SGS FOR PRESHIPMENT INSPECTION. " ( 11 ). On 22. 4. 1994, one Mr. TO COMMENCE LOADING ON 25th APRIL. WILL revert AS SOON AS SAME FINALISED. KINDLY GIVE DETAILS OF YOUR CLEARING AND FORWARDING agent IN KAKINADA ENABLE INFORM SGS FOR PRESHIPMENT INSPECTION. " ( 11 ). On 22. 4. 1994, one Mr. Behari of broker Bhagwan Dass Daulal Ram informed defendant No. 2, that vessel in question, namely, "mv Prudent Voyager had been fixed for "m/s BHARAT/andagro PVT. LTD. OR NOMINEE" for taking cargo to iran. ( 12 ). On 22. 4. 1994 another fax message originated from defendant No. 2 to Mr. Behari of the broker B. Daulatram informing that M/s Bharat Starch Industries Ltd. (the plaintiff) are charter parly. Mr. Behari was asked to forward all correspondence to defendant No. 2 so as to enable defendant No. 2 to forward the same to the plaintiff. Charter party is also dated 22. 4. 1994 which admittedly is not signed by the plaintiff but is signed by Paul Mcgowan purporting to be for and on behalf of the plaintiff, namely, the charterers. ( 13 ). On 23. 4. 1994, defendant NO. 2 informed the plaintiff through fax message: "1. WE HAVE FINALISED MV PRUDENT VOYAGER TO commence LOADING ON 27th APRIL 1994 AT 08. 00 HRS. 2. ENCLOSED PLEASE FIND COPY OF THE FAX SENT TO THE owners OF THE VESSEL TO GIVE ALL THEIR NOTICES TO you AND/or TO YOUR CLEARING AND FORWARDING agents IN KAKINADA. KINDLY ADVISE YOUR CLEARING and FORWARDING AGENTS TO DO THE NEEDFUL. " ( 14 ). On the same date, namely, 23. 4. 1994, defendant No. 2 informed defendant No. 1 that M/s International Shippers and Traders, Kakinada were clearing and forwarding agents for the plaintiff. In this letter the plaintiff was described as a charterer of the ship. On 23. 4. 1994 M/s Babko Shipping Services, Kakinada for and on behalf of the plaintiff informed M/s Parekh Marine Agencies Pvt. Ltd. that the plaintiff had appointed it (Babko Services) as charterer s agent and stevedores. Copy was sent to the plaintiff. The message reads: 23rd Apr 94. M/s Parekh Marine Agencies Pvt. Ltd. , tilak Street, kakinada - 533007. Dear Sir, sub: M. V. prudent VOYAGER WE take pleasure in informing you that we have been appointed as Charters agents and Stevedores by our Principals M/s Bharat Starch Industries Ltd. who are the Charterers of the vessel as well shippers of the cargo. M/s Parekh Marine Agencies Pvt. Ltd. , tilak Street, kakinada - 533007. Dear Sir, sub: M. V. prudent VOYAGER WE take pleasure in informing you that we have been appointed as Charters agents and Stevedores by our Principals M/s Bharat Starch Industries Ltd. who are the Charterers of the vessel as well shippers of the cargo. All the correspondence may be directed to us. THANKING you, yours faithfully, for BABKO SHIPPING SERVICES, sd/- capt. BRIJ M. TALWAR (MG. PARTER) c. C. to M/s Bharat Starch Industries Ltd. , New Delhi" ( 15 ). There is no dispute nor has been raised during the course of arguments that babko Shipping Services acted as an agent of the plaintiff. It is also not disputed that copy of letter dated 23. 4. 1994 by Babco Shipping Services addressed to the agent of ship owner, namely, received by the plaintiff. ( 16 ). In response to the fax message dated 23. 4. 1994, the plaintiff thanked defendant no. 2 in having arranged MV Prudent Voyager for shipment and stated that the plaintiff will be in a position to accept the vessel. The message reads: "mr. NIRMAL SOMAYA, with REF. TO YOUR FAX NO. BBY/f/94/1285 DATED 23/4/94 WE are THANKFUL FOR ARRANGING MV PRUDENT VOYACJER for SHIPMENT OF MAIZE TO IRAN. PL. NOTE WE WILL BE IN A position TO ACCEPT THE VESSEL BY 27th APRIL, 94 SUBJECT to FOLLOWING CONDITIONS: 1. INSPECTION BY SGS. 2. AMENDMENT OF L. C. AND CONFIRMATION FROM APEDA till THIS TIME WE HAVE NOT RECEIVED THE AMENDED l. C AND WITHOUT THAT APEDA LICENCE EXTENSION cannot BE TAKEN. REGARDS, p. R. MEHRA marketing MANAGER. " ( 17 ). On 25. 4. 1994, defendant No. 2 informed defendant No. l that the plaintiff, the charterer, would like the notices to be given on its behalf to its agent, namely, M/s bharat Starch Indus. Ltd. Vs. Prudcnl International Shipping and Trading Ltd. 81 babko Shipping Services. On the same day, Parekh Marine Agencies, the agent of defendant No. l informed the plaintiffs agent, namely, Babko Shipping Services that the vessel was ready in Kakinada in all respects for being loaded. Notice ol readiness is stated to have been tendered on 25. 4. 1994. On 29. 4. Prudcnl International Shipping and Trading Ltd. 81 babko Shipping Services. On the same day, Parekh Marine Agencies, the agent of defendant No. l informed the plaintiffs agent, namely, Babko Shipping Services that the vessel was ready in Kakinada in all respects for being loaded. Notice ol readiness is stated to have been tendered on 25. 4. 1994. On 29. 4. 1994, on plaintiffs behalf Babko shipping Services appears to have had discussion with the agent of defendant No. 1 and informed that loading was planned to commence from 2nd May, 1994. Loading appears to have commenced on 30. 4. 1994. Statement of facts relating to loading of mazc in bulk at Kakinada port along with Master/owners Agent s remarks and charter Agent s remarks are duly signed by Babko Shipping Services as the plaintiffs agent described to be the charterer s agent. ( 18 ). In the statement of facts, reference is made to the charier party. Clause 19 of the statement says that the dead freight to be paid by the charterers as per the difference between the joint survey quantity and 10000 M. Tonnes (the agreed minimum, quantity to be loaded ). Clause 6 of the Charter s agent s remarks says that demurrage and despatch to be calculated as per relative charter party. ( 19 ). There are two bills of lading on record. In the first bill of lading, the plaintiff is described as the charterer of the ship and it also makes reference to the charter party dated 20. 4. 1994 by saying that freight payable is as per charier party dated 20. 4. 1994. In the bill of lading dated 20. 5. 1994, the first condition of carriage says that "all terms and conditions, Liberties and exceptions of the Charter Party, including the Arbitration clause dated as overleaf, are herewith incorporated". ( 20 ). On 21. 5. 1994, a letter was addressed by Babko Shipping Services to Parekh marine Agencies, the agent of defendant No. l, referring to certain remarks and stated"we have received now the authentic charter party with some changes". Some doubt appears to have been raised by the plaintiff as regards some conditions in the charter party for which, on 23. 5. 5. 1994, a letter was addressed by Babko Shipping Services to Parekh marine Agencies, the agent of defendant No. l, referring to certain remarks and stated"we have received now the authentic charter party with some changes". Some doubt appears to have been raised by the plaintiff as regards some conditions in the charter party for which, on 23. 5. 1994, defendant No. l informed the plainliff that "the charterparty HAS BEEN IN YOUR AGENTS POSSESSION SINCE THE end OF APRIL AND IT IS HARD TO BELIEVE THAT YOU ARE in THE dark . WE OR YOUR AGENTS WOULD HAVE GIVEN YOU ANY INFORMATION you REOUESTED. HOWEVER TO DATE WE CAN TRACE NO such REOUESTS. PLEASE ASK CAPT. TALWAR, BABKO SHIPPING TO forward YOU A COPY OF THE CHARTERPARTY. " ( 21 ). The other bill of lading is dated 31st May, 1994. It is similar to the earlier bill of lading dated 20. 5. 1994, which refers to the plaintiff as the shipper and also makes a reference to the charter party dated 20. 4. 1994 and the conditions of carriage being that all terms and conditions, liberties and exceplions of the charter party, including arbitration clause, arc incorporated. ( 22 ). On 1. 6. 1994, defendant No. 1 informed defendant No. 2 of its claim for demurrage. On 26 1994, defendant No. 1 informed the plaintiff through fax that demurrage time to count from 13. 5. 1994 and also informed about total demurrage time as also the total demurrage. This fax message of defendant No. l was acknowledged by the plaintiff when a communication was sent by the plaintiff to defendant No. 2 informing: "we thankfully acknowledge the receipt of your Fax Meg. No. BBY/ / /94/1735 dated 1st June, 1994 and have to inform you that the freight against 1st Bill of Lading is being arranged by us and the payment against IInd Bill of Lading dated 20th May, 1994 will be arranged within 2 or 3 days from the receipt of B/l. We have so far not received the statement of facts. As such the demurrage payment would be calculated andpaid on getting the statement of farts and computation of lay time. " ( 23 ). On 21. 7. 1994, the plaintiff addressed a letter to the Punjab National Bank, New delhi requesting to set aside Rs. As such the demurrage payment would be calculated andpaid on getting the statement of farts and computation of lay time. " ( 23 ). On 21. 7. 1994, the plaintiff addressed a letter to the Punjab National Bank, New delhi requesting to set aside Rs. 36 lacs payable in two instalments to defendant No. 2 towards their service charges against the export in question. On 30. 7. 1994, there is a fax message from the plaintiff to defendant No. 2 on the question of remittance of the commission/service charges. The matter was discussed at length internally in the plaintiffs corporate account department. Defendant was asked to send a letter to the following words: "bharat Starch Industries Ltd. With reference to our memorandum of understanding and your debit note dated 16lh July, 1994 for Rs. 36,93,508. 45, you are requested to arrange remittance of our commission/service charges as detailed in our debit note. Since the matter already has been over delayed. Please arrange our commission /service charges immediately enabling us to square up your account. " ( 24 ). In continuation of the aforementioned fax message dated 30. 7. 1994, another fax message was conveyed by the plaintiff to defendant No. 2 that no sale and purchase had taken place between the plaintiff and defendant No. 2, therefore, the difference of 37us Dollar per M. T. cannot be presumed as profit on sale and this difference is nothing but service charges. On 14. 8. 1994, with respect to commission charges payable to defendant No. 2, there has been exchange of fax message internally from plaintiff s one office to another, which is to the following effect: "we have discussed the opinion of M/s Dalai Dcsi and Kumana Chartered accountants on the captioned subject with our Legal Advisor M/s K. C. Khanna and Co. Chartered Accountants. Bharat Starch Industries Limited (BSIL) had supplied approximately 10000 mt of Maize to M/s Bakahtaram Danish. Iran on the strength of FLC issued in favour of BSIC. BSIC had supplied the material and raised invoices (Documents) in the name of M/s Bakahtaram Danish. K. C. Khanna and Co. is of the opinion that the above facts clearly indicate that there is a contract between BSIL and M/s Bakahtaram Danish. Iran and BSIL has rightly booked the export turnover in its books of accounts. BSIC had supplied the material and raised invoices (Documents) in the name of M/s Bakahtaram Danish. K. C. Khanna and Co. is of the opinion that the above facts clearly indicate that there is a contract between BSIL and M/s Bakahtaram Danish. Iran and BSIL has rightly booked the export turnover in its books of accounts. M/s Andagro Services had only provided services to locate the buyer of maize and arranges the PLG in favour of BSIL. The understanding dated 14. 04. 94 between M/s Andagro Services and BSIL is payable to M/s Andagro and Services at the rate of US $ 37. 00 per tonne after deducting certain expenses incurred by BSIL on their behalf. The TDS as per the section 19-C of the Income Tax Act, 1961 read with circular no. 681 dated 8th March, 1994 as applicable on the service contract. Copy of the circular No. 38l is enclosed for your ready reference. Kindly take up the matter with M/s Andagro Services on the above lines immediately and inform us accordingly. " ( 25 ). On 10th August, 1994 there is also an internal memorandum of the plaintiff on the commission payable to defendant No. l as per the memorandum of understanding dated 14. 4. 1994 that a demand draft be prepared in favour of defendant No. 2 payable at Bombay towards full and final settlement of the payment due to defendant No. 2 as per memorandum of understanding dated 14. 4. 1994. ( 26 ). On reference to the aforementioned number of documents, an argument is advanced on behalf of the plaintiff that since the plaintiff is not a signaturec to the memorandum of understanding or charter party, therefore, there is no privity of contract between the plaintiff and defendant No. l and, thus, there is no agreement for referring disputes for arbitration. ( 27 ). It has already been noticed above that the plaintiff is neither a signaturee to the memorandum of understanding nor to the charter party. Charter party has been signed on behalf of the plaintiff by Paul Mcgowan of defendant No. 2. Memorandum of understanding is not so signed. Babko Shipping Services admittedly has been acting as a clearing and forwarding agent of the plaintiff, Reference to number of aforementioned documents would show that the plaintiff appointed M/s Babko Shipping Services as their clearing and forwarding agents at Kakinada. Memorandum of understanding is not so signed. Babko Shipping Services admittedly has been acting as a clearing and forwarding agent of the plaintiff, Reference to number of aforementioned documents would show that the plaintiff appointed M/s Babko Shipping Services as their clearing and forwarding agents at Kakinada. Letter dated 23rd April, 1994 from Babko Shipping Services to Parekh Marine Agencies confirms this fact. Copy of this letter was also sent to the plaintiff. Plaintiff in this letter has been described as "the charterers of the vessel as well as shippers of the cargo". Letter dated 25th April, 1994 from Parekh Marine Agencies to Babko Shipping Services informs that vessel M. V. prudent Voyager is already in Kakinada to load her full cargo of maize in bulk "subject to terms, conditions and exceptions of the relative charter party". The next letter dated 29th April, 1994 in response to this from Babko Shipping services to M/s Parekh Marine Agencies says "we have been advised by our principals to accept N. O. R. of 25th April and laytime from 0800 hours on 27th April 94 under- protest. However, we are planning to commence loading of your good vessel from 2nd may, 94. " This letter is signed by Capt. Brij Talwar, Managing Partner of Babko Shipping services describing him "as Charterer s Agents only". Copy of this letter has been sent to the plaintiff as well as to defendant No. 2 as also to Mr. Paul Mcgowan. There is no objection raised till this time by the plaintiff or its agent Babko Shipping Services that the plaintiff was not the charterer or that there was no charter party. Presumably letterdated 29lh April, 1994 has been sent by Babko Shipping Services with the consent and full knowledge of the plaintiff since it says so "we have been advised by our principals". After the loading of the cargo was over the statement of facts prepared with Master/owner s remarks and Charter Agent s remarks were dulysigncd by babko Shipping Services as "charterer s Agents". Statement of facts in clause 5 says that "lay time to start from 0800 hrs. on 27-04-1994 as per terms and conditions of the relative Charter Party". This clause apparently is exactly as per the plaintiffs advise which was conveyed by its agents to the agents of defendant No. l REFERRED TO in letter dated 29th April, 1994. Statement of facts in clause 5 says that "lay time to start from 0800 hrs. on 27-04-1994 as per terms and conditions of the relative Charter Party". This clause apparently is exactly as per the plaintiffs advise which was conveyed by its agents to the agents of defendant No. l REFERRED TO in letter dated 29th April, 1994. Clause 10 of the statement of fact has already been noticed above. The remarks which were appended to this statement of facts by Babko Ship- ping Services as plaintiffs agents describing them as Charter s Agents specifically refers to the relative Charter Party. In view of this evidence on record it is hard to believe that the plaintiff was not aware of the terms and conditions of the relative charter party. The statement of facts relating to loading of maize at Kakinada duly signed on behalf of the plaintiff by Babko Shipping Services itself says that the same is "subject to terms and conditions, provisions and exceptions of the relevant charter party dated 20. 4. 1994. " When this fact, is not in dispute that Babko Shipping Services is the plaintiffs agent, namely, as charterer s agent, have duly signed the statement of fact slating that the same is "subject to terms and conditions, provisions and exceptions of the relevant charier party dated 20. 4. 1994" and have also duly signed the master/owner s and charterer s agents remarks, which also states "demurrage and despalch to be calculated as per relative charter parly", it is not possible to accept the plaintiffs version that it is not hound and is not subject to the terms of charier party or that it was not aware of the charier party. The very act of plaintiffs agent in signing the statement of facts, master or owner s remarks and charter agent s remarks, which say that the same are subject to the conditions contained in charter party dated 20. 4. 1994 makes the charter party a part of this document and by necessary implication includes the terms of charter parly, including arbilration clause, as a condition of shipment. The mere fact that the charter party in its turn is signed by Paul Megowan on behalf of the plaintiff without any express authorisation will not make any difference. In the charter party reference is made to memorandum of understanding. The mere fact that the charter party in its turn is signed by Paul Megowan on behalf of the plaintiff without any express authorisation will not make any difference. In the charter party reference is made to memorandum of understanding. Plaintiff in its correspondence has also made reference to a memorandum of under standing for which as late as 10. 8. 1994, the plaintiff prepared a statement of account of defendant No. 2 towards its commission/service charges as per the memorandum of understanding . Plaintiff has not placed reliance on any other memorandum of understanding and does not state that there was any other memorandum of understanding other than the one, copy of which is placed on record. In case there was no other memorandum of understanding it has to be assumed that the only memorandum of understanding which came into being is dated 14. 4. 1994. Copy of memorandum of understanding on record dated 14. 4. 1994 states that defendant No. 2 was to procure an order of 10400 M t of Indian yellow maize and charter vessel on behalf of the plaintiff for shipment to iran. It also recoreds the terms on which work was to be executed. There is, thus, no manner of doubt that the plaintiff has to be taken as a party to the Charter Party agreement and bound by the terms thereof. ( 28 ). Bill of lading also makes a reference to the charter party agreement. The plaintiff has not placed on record any other charter party or any other bill of lading other than the one which are on record As per the bill of lading, freight payable is as per charter parly dated 20. 4. 1994 . Charter party incorporates the some rates as are reflected to in the letler dated 21. 4. 1994 which was sent by Paul Mcgowan, to the plaintiff and the plaintiff has also placed reliance on this document. As per the memorandum of understanding, the plaintiff is stated to have agreed to supply the entire contracted quantity of maize at the rate of US S 128 per M. Tonne FAS Kakinada the amount which was to be remitted including freight etc. as per memorandum understanding by M/s Bakhtaran Danesh Co. , Iran to the plaintiff was at the rate of us $ 165 per M. Tonne. ( 29 ). as per memorandum understanding by M/s Bakhtaran Danesh Co. , Iran to the plaintiff was at the rate of us $ 165 per M. Tonne. ( 29 ). The charter party describes the plaintiff as charterer and defendant No. l as the owner of vessel. It admittedly contains an arbitration clause which says: "clause NO. 29: all DISPUTES FROM TIME TO TIME ARISING OUT OF THIS contract SHALL UNLESS THE PARTIES AGREE FORTHWITH on A SINGLE ARBITRATOR, BE REFERRED TO FINAL ARBITRATION of 2 ARBDITRATORS CARRYONG ON BUSINESS IN london WHO SHALL BE MEMBERS OF THE LONDON maritime ARBITRATORS ASSOCIATION. ONE TO BE APPOINTED by EACH OF THE PARTIES WITH POWER TO SUCH arbitrators TO APPOINT AN UMPIRE WHOSE DECISION will BE FINAL AND BINDING ON ALL PARTIES. " ( 30 ). Bill of lading incorporated therein all terms and conditions of charter party, including the arbitration clause. The bill of lading admittedly is duly signed for and on behalf of the plaintiff by its agent, namely, Babko Shipping Services. The plaintiff, thus, has to be termed as a party to the arbtiration agreement, which is in writing. The mere fact that it is not signed by the plaintiff will not make any difference. The same has to be taken as a valid agreement on plaintiffs behalf for which the plaintiff by sub- sequent conduct is bound. The plaintiff also cannot claim ignorance of the memorandum of understanding or of the charter party. ( 31 ). In view of the nature of controversy which has cropped up, in order to decide the two applications in hand, it is not necessary to adjudicate upon the actual nature of relation between the plaintiff and defendant No. 2 except to the extent to which reference has been made above. The mere fact that in the fax message dated 2. 3. 1994, defendant No. 2 confirmed having purchased from the plaintiff the maize or describing the Iranian party as "my buyers" will not make any difference in so far as rights and liabilities inter se the plaintiff and defendant No. l are concerned, which are to be governed on the basis of the documents for which reference has been made, namely, memorandum of understanding, charter party, bill of lading etc. ( 32 ). ( 32 ). In view of the above findings, there is no manner of doubt that all the conditions which are required to be fulfilled in a petition under Section 3 of the Act are duly satisfied in this case and there is no other option left except to order the stay of proceedings. For the self same reasons there is no question of granting any injunction in plaintiffs favour restraining defendant No. l not to act upon the arbitration clause. OMP 13/95 accordingly is allowed and IA 10655/94 in S. 2788/94 is dismissed, leaving the parties to bear their respective costs.