NDLI: Alimenta S.a. Etc. Vs. National Agricultural Co-operative Marketing Federation of India Ltd. and Another

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Arbitration Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Arbitration Act, 1940 (10 of 1940)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Arbitration Act, 1940, s.2-Arbitration Agreement-Construction of-Contract for supply of goods-Whether arbitration clause must form part of such contract-Parties entitled to choose other method for resolving dispute-When incorporation clause refers to certain particular terms and conditions only those to be incorporated-Not arbitration clause . The appellant and the respondent entered into two contracts on two different dates for supply of HPS groundnut Kernels jaras. After the usual terms as to quality, quantity, price etc., the first contract provided in clause II thereof "that other terms and conditions as per FOSFA-20 contract terms." However, clause 9 of the second contract did not make any mention of FOSFA-20 contract and all that was stated was that all other terms and conditions for supply not specifically shown and covered therein should be as per previous contract signed between the parties for similar supply of HPS groundnut. Tbe FOSFAE 20 contract contained an arbitration clause to the effect that any dispute arising out of this contract, including any question of law arising in connection therewith, shall be refered to arbitration and neither - party, hereto, nor any persons claiming under either of them shall bring any action or other legal proceedings against the other in respect of any such dispute until such dispute shall first have been heard and determined by the arbitrators. Disputes and differences arose between the parties. The appellant in Civil Appeal No. 1755/1982 alleged that the respondent therein committed breach of their obligations under both the contracts and sought to commence arbitration proceedings. The respondent on the other hand filed a petition in the High Court under s.33 of the Arbitration Act, 1940 alleging that there was no valid arbitration agreement between the parties and contended that when it agreed in clause 11 of the first contract that the parties would be governed by the terms and conditions of 'FOSFA-20 contract', it only had in mind such terms and conditions as would govern the relationship between the parties and the fact that there was an arbitration clause in FOSFA-20 contract came as a complete surprise to the respondent. This petition was opposed by the appellant. A Single Judge of the High Court held that in view of the fact that the respondent had been nominated the canalising agent for export of HPS groundnut, it would not be unjustified to assume that the respondent was well aware of the foreign trade in groundnut and the implications of reference to 'FOSFA-20 contract' when he put his signatures to the contract in question; that the arbitration clause in FOSFA-20 contract was incorporated into the first contract by virtue of clause 11 C providing 'other terms and conditions as per FOSFA-20 contract terms'. With regard to the second contract it was held that it did not make any mention of FOSFA-20 contract and all that was stated in clause-9 thereof was that all terms and conditions for supply not specifically shown and covered therein should be as the previous contract signed between the parties for similar supply of HPS. It was accordingly held that there existed no arbitration agreement between the parties and, as such, none of them was entitled to seek reference to arbitration; and that a term about arbitration was not incidental to supply of goods and it was difficult to read from the provisions of clause 9 of the contract that the arbitration clause was lifted from there and made a part of the same. The applications under s.33 of the Arbitration Act was allowed in so far as it related to the second contract, and disallowed so far as the first contract was concerned. Both parties filed appeals to this Court.
Judge	Hon'ble Mr. Justice M.M. Dutt
Neutral Citation	1987 INSC 6
Petitioner	Alimenta S.a. Etc.
Respondent	National Agricultural Co-operative Marketing Federation Of India Ltd. And Another
SCR	[1987] 1 S.C.R. 957
Judgement Date	1987-01-09
Case Number	1755

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