JUDGMENT
D.K. Deshmukh, J.
1. This Notice of Motion has been taken out by defendant. The principal relief that is claimed by this motion is that the suit be dismissed because it is barred by the provisions of the Arbitration and Conciliation Act, 1996.
2. The facts that are relevant for deciding this Notion of Motion are, Adm. Suit No. 4 of 2004 has been filed. The plaintiff is a company incorporated under the provisions of the Companies Act, 1956 and it deals in iron ore. The defendant is the Foreign flag vessel flying the flag of Thailand. According to the plaintiff, the defendant-vessel is owned, controlled and managed by Thor Orchid Shipping Co. Ltd. The plaintiff states that a charter party dated 24.12.2003 was entered into between the plaintiff and the owner of the defendant-vessel, whereby the plaintiff chartered the defendant-vessel for carriage of iron ore from the Port of Vishakapatnam to the Port of Bombay. The dispute between the parties arises out of this charter party agreement. According to the plaintiff, the owners of the defendant-vessel are liable to refund to the plaintiff a sum of US $ 72,787,47. The plaintiff further states that as per the terms of the character party the dispute in relation to the recovery of the above amount by the plaintiff from the owners of the defendant-vessel is to be referred to LMA Arbitration in England. The Arbitration proceeding have not yet commenced. But the plaintiffs have stated that they are taking steps to initiate the process of Arbitration. The plaintiffs state that the vessel at the time when the suit was instituted was within the admiralty jurisdiction of this Court and, therefore, this suit was filed by the plaintiff to secure the Award that may be made by the Arbitrator in Arbitration between the parties. The plaintiff states that the suit is maintainable in view of the judgment of the Supreme Court in the case of m.v. Elizabeth v. Harwan Investment and Trading Pvt. Ltd., , and the judgment of the Division Bench of this Court in the case of Islamic Republic of Iran v. m.v. Mehrab and Ors., , as also according to the provisions of the Brussels Arrest Convention, 1952 and the Geneva Arrest Convention, 1999. The plaintiff prays for following reliefs :
(a) That the defendant vessel m.v. THOR ORCHID along with her hull, tackle, engines, machinery, boats, apparel and other paraphernalia at present lying in port and harbour Dighi be ordered to be arrested with a view to secure the plaintiff's claim in the Arbitration proceedings to be instituted in London. (b) That the defendant vessel m.v. THOR ORCHID along with her hull, tackle, engines, machinery, boats, apparel and other paraphernalia at present lying in port and harbour Dighi be detained, condemned and sold under orders and directions of this Honourable Court and the sale proceeds thereof applied towards the satisfaction of the plaintiff's claim in the Arbitration proceedings to be instituted in London. (c) For an order for security in favour of the plaintiff in the sum of US $ 72,787,47 as per particulars of claim and for interest thereon and costs as shown in Exhibit "A" together with further interest thereon at the rate of 12% per annum from the date of the institution of the suit till payment and/or realization on the basis of the Award that may be passed.
3. By order dated 19.01.2004 the vessel was arrested. The defendant thereafter moved the Court for vacating the order of arrest relying on the judgment of the Division Bench of this Court in the case of Blue Diamond Freight Pvt. Ltd. v. m.v. Indurva Valley and Anr., dated 15.09.2003. In view of the judgment of the Division Bench, this Court by order dated 23.01.2004 vacated the order of arrest of the vessel. Thereafter, the defendant took out this Notice of Motion for dismissal of the suit in view of the judgment of the Appeal Court in the case of m.v. Indurva Valley (supra), referred to above.
4. The learned counsel for the defendant submits that the present suit has been filed for relief for securing the Award that may be passed by the Arbitrator in the Arbitration proceeding to be instituted in London. According to the defendant the dispute between the parties arises out of charter party dated 24.12.2003. That charter party according to the defendant was entered into in Mumbai. The Arbitration that is contemplated by the charter party would be International Commercial Arbitration. Therefore, according to the defendant in terms of the judgment of the Appeal Court in the case of m.v. Indurva Valley (supra), the only remedy available to the plaintiff is to apply under Section 9 of the Arbitration and Conciliation Act and the present suit is not maintainable.
5. On behalf of the plaintiff, on the other hand, it is submitted that the present suit is maintainable. The plaintiff relies on the judgment of the Division Bench of this Court in the case of m.v. Mehrab (supra), referred to above and submits that the Division Bench has in term held that this Court in its admirably jurisdiction has power to arrest the ship to secure a claim in future or pending Arbitration. It is further submitted relying on the provisions of Section 45 of the Act which applies to International Commercial Arbitration, the Section 5 which is found in Part 1 is not applicable to International Commercial Arbitration and, therefore, the jurisdiction of this Court cannot be said to be ousted because of the provisions of Section 5 of the Arbitration Act. The learned counsel for the plaintiff relies on a judgment of the Supreme Court in the case of Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya and Anr., , to contend that even in the case of domestic Arbitration to which admittedly Section 9 applies the Court has held that a party to Arbitration can institute a civil suit until an application is made under Section 8 of the Arbitration Act and Court will have the jurisdiction to entertain the suit. It is submitted that in view of the judgment of the Supreme Court in the case of Sukanya Holdings Pvt. Ltd. (supra), the law laid down by this Court in the case of m.v. Indurva Valley (supra), is no longer good law and, therefore, according to the plaintiff the suit of the plaintiff cannot be dismissed.
6. Now in order to appreciate the rival contentions it is necessary to refer to the provisions of the Arbitration Act first. It may be borne in mind here that there is no dispute between the parties that there is an Arbitration clause in the charter party dated 24.12.2003 and the Arbitration contemplated by the Arbitration clause is International Commercial Arbitration and the place of Arbitration is in London and not in India. The term International Commercial Arbitration is defined by Section 2(f) of the Act. It reads as under :
“2(f). “International Commercial Arbitration” means an Arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is :
(i) an individual who is a national of, or habitually resident in, any country other than India ; or
(ii) a body corporate which is incorporated in any country other than India ; or
(iii) a company or an association or a body of individuals whose central management and control is exercised in any country other than India ; or
(iv) the Government of a foreign country.”
7. There is no dispute before me that the Arbitration with which we are concerned in the present case is International Commercial Arbitration within the meaning of above quoted provisions of the Arbitration Act. Sub-section (2) of Section 2 is relevant. It reads as under :
“This part shall apply where the place of Arbitration is in India.”
8. The next provision which is relevant is Section 5. It reads as under : "Notwithstanding anything contained in any other law for the time being in force, in matters governed by this part, no judicial authority shall intervene except where so provided in this part." 9. The next provision that is relevant is Sub-section (1) of Section 8. It reads as under : "8(1). A judicial authority before which an action is brought in a matter which is the subject of an Arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to Arbitration." 10. Perusal of this provision shows that the Arbitration Act contemplates a civil suit being instituted before a Court in relation to the subject-matter of an Arbitration agreement. The next provision that is relevant is Section 9. Section 9 reads as under : "A party may, before or during Arbitral proceedings or at any time after the making of the Arbitral Award but before it is enforced in accordance with Section 36, apply to a Court: (i) For the appointment of a guardian for a minor or a person of unsound mind for the purposes of Arbitral proceedings ; or (ii) For an interim measure of protection in respect of any of the following matters namely : (a) The preservation, interim custody of sale of any goods which are the subject-matter of the Arbitration agreement ; (b) Securing the amount in dispute in the Arbitration ;
(c) The detention, preservation of inspection of any property or thing which is the subject-matter or the dispute in Arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of an party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence ;
(d) Interim injunction or the appointment of a Receiver ;
(e) Such other interim measure of protection as may appear to the Court to be just and convenient,
and the Court shall have the same power for making orders as it has for the purpose of and in relation to any proceedings before it.”
11. Perusal of this provision shows that this provision entitles a party to an Arbitration proceedings to apply to the Court for interim measures before the commencement of the Arbitration proceedings during the pendency of the Arbitration proceedings as also after the Award is made and before it is enforced in accordance with Section 36 of the Act. The next provision that is relevant for the present purpose is Section 44, which defines the term “Foreign Award”. Section 44 reads as under :
“44. In this chapter, unless the content otherwise, requires, “Foreign Award” means an Arbitral Award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on, after the 11th day of October, 1960 :
(a) in pursuance of an agreement in writing for Arbitration to which the Convention set forth in the First Schedule applies, and
(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said convention applies.”
12. The next provision that is relevant is Section 45. It reads as under:
“Notwithstanding anything contained in part I or in the Code of Civil Procedure, 1908 (V of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in Section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to Arbitration unless it finds that the said agreement is null and void, inoperative or incapable of being performed.”
13. Perusal of the provisions of Section 45 shows that it applies an Arbitration agreement out of which Foreign Award emerges. This provision is akin to the provision of Sub-section (1) of Section 8 which is found in Part-1, whereas Sections 44 and 45 are found in Part-II of the Act. Third feature which is to be noted is that Section 45 operate notwithstanding anything contained in Part-I. The provision shows that it is possible to institute suit in a matter in respect of which the parties have made an agreement referred to in Section 44.
14. Relying on the provisions of Section 45 and the judgment of the Supreme Court in Sukanya Holdings Pvt. Ltd. case (supra), it is submitted on behalf of the plaintiff that a suit can be instituted in relation to a matter which is subject-matter of the Arbitration agreement and, therefore, it cannot be said that merely because a remedy of Section 9 is available, institution of the suit is barred. It is submitted that the Supreme Court in Sukanya Holdings Pvt. Ltd. case (supra), has held that the Arbitration Act does not oust the jurisdiction of the Civil Court to decide the dispute in a case where the parties to the Arbitration agreement did not take appropriate steps as contemplated under Sub-section (1) and Sub-section (2) of Section 8 of the Act. Therefore, according to the plaintiff, as a result of the judgment of the Supreme Court in Sukanya Holdings Pvt. Ltd. case (supra), a suit can be instituted even in relation to an agreement out of which a domestic Award emerges and the Civil Court where such suit is instituted would be competent to make even interim order in such a suit till as application is made under Sub-sections (1) and (2) of Section 8 and it is only after an application under Sub-sections (1) and (2) of Section 8 is made and the parties are referred to Arbitration in terms of Section 8 that the Civil Court will lose jurisdiction in relation to the subject-matters. It is, therefore, submitted that if a suit in relation to the subject-matter which is covered by an Arbitration agreement where a domestic Award is maintainable despite the provisions of Section 5, there is no reason why a suit in relation to an agreement out of which a Foreign Award emerges would not be maintainable. It is submitted that in case of such an agreement by virtue of the provisions of Section 45, Section 5 will not operate. The plaintiff relies on the observation of the Supreme Court in paragraph 12 of the judgment in Sukanya Holdings Pvt. Ltd. case (supra). I reads as under :
“For interpretation of Section 8, Section 5 would have no bearing because it only contemplates that in the matters governed by Part-I of the Act, judicial authority shall not intervene except where so provided in the Act. Except Section 8, there is no other provision in the Act that in a pending suit, the dispute is required to be referred to the Arbitrator. Further, the matter is not required to be referred to the Arbitral Tribunal, if (1) the parties to the Arbitration agreement have not filed any such application for referring the dispute to the Arbitrator ; (2) in a pending suit, such application is not filed before submitting first statement on the substance of the dispute ; or (3) such application is not accompanied by the original Arbitration agreement or duly certified copy thereof. This would, therefore, mean that Arbitration Act does not oust the jurisdiction of the Civil Court to decide the dispute in a case where parties to the Arbitration agreement do not take appropriate steps as contemplated under Sub-sections (1) and (2) of Section 8 of the Act.”
15. On behalf of the plaintiff it is submitted that the Division Bench in its judgment in m.v. Indurva Valley (supra), has observed thus :
“In the instant case the charter party agreement was entered into in Mumbai and thus this Court has jurisdiction to grant relief under Section 9 of the Arbitration and Conciliation Act, 1996 in the light of the decision of the Supreme Court in Bhatia International [reported in 2003(2) Arb. LR43 (SC)]. Section 5 of the Arbitration and Conciliation Act clearly provides that in matters Governed by Part I, no judicial authority shall intervene except where so provided in that part. Consequently a suit in admiralty jurisdiction for securing the claim in Arbitration is not maintainable. The remedy of the appellants is to make an application for interim relief in terms or Section 9 of the Arbitration and Conciliation Act, 1996.
It is submitted that these observations cannot be said to be laying down a good law in view of the judgment of the Supreme Court in Sukanya Holdings Pvt. Ltd.’s case [reported in 2003(2) Arb. LR 43 (SC)], which holds that a civil suit in relation to the subject-matter of an Arbitration agreement is maintainable.”
16. It is to be seen here that this suit has been instituted in the admiralty jurisdiction of this Court for providing security for the Award that may be made in the Arbitration proceedings between the parties. In so far as the judgment of the Division Bench in m.v. Mehrab (supra), is concerned, the learned Single Judge has held that a suit merely for a decree for providing security to the plaintiff to secure an Award which will be made in the Arbitration proceedings is not maintainable. That order was challenged before the Division Bench and the Division Bench after referring to various judgments of the Supreme Court as well as the other Courts held that:
“There is nothing in the statutes in India to exclude use of admiralty jurisdiction for the purpose of arresting a ship by way of security in future or pending Arbitration. The countries like USA and Canada recognised the powers of Court to order arrest of ship to force security for a future Arbitration Award. In England too the world has moved on. In Jalmasiya the Court has categorically held that the Court has power to arrest ship to secure claims in future or pending Arbitrations. Why should the Court maintain a stand which has been discarded in England and which does not accord with the preferred judicial policy as enunciated in m.v. Elizabeth. We, therefore, hold that the Court in its admiralty jurisdiction has power to arrest a ship to secure a claim in future or pending Arbitration.”
17. It is thus, deal the Division Bench in terms in its judgment in m.v. Mehrab’s case (supra), has held that the suit in admiralty jurisdiction to secure claim in future or pending Arbitration is maintainable. It is true that in the judgment in m.v. Mehrab’s case (supra), neither the judgment of the Supreme Court in the case of Bhatia International v. Bulk Trading S.A. and Anr., JT 2002(3) SC 150=2002(1) Arb. LR 675
(SO, nor the provisions of the Arbitration Act were considered. When the matter again came before the Division Bench in Appeal in the case of m.v. Indurva Valley (supra), the Court noted that the suit in the case of m.v. Indurva Valley (supra), was instituted relying on the judgment of the Division Bench in m.v. Mehrab’s case (supra). The Court in its judgment in m.v. Indurva Valley (supra), quoted from the judgment of the Division Bench in the m.v. Mehrab’s case (supra). However, relying on the judgment of the Supreme Court in the case of Bhatia International (supra), referred to above held that such a suit is not maintainable. Perusal of the judgment of the Supreme Court in Bhatia International (supra), shows that in that case the Court was not considering the question about maintainability, of a suit in a Court in India in relation to a subject-matter which is subject of International Commercial Arbitration. The question that was being considered by the Supreme Court in its judgment in Bhatia International’s case (supra), is about maintainability of the application under Section 9 for interim measure in case where the place of Arbitration is not in India. In Bhatia International’s case (supra), the Supreme Court was also not considering the admiralty jurisdiction. The Supreme Court held that merely because Section 9 is found in Part-I and Sub-section (2) of the Arbitration Act lays down that this part shall apply where the place of Arbitration is in India, application of Section 9 of the Arbitration Act is not excluded where the place of Arbitration is not in India. From the judgment of the Supreme Court in Bhatia International’s case (supra), it is clear that even where the place of Arbitration is not in India the remedy of Section 9 is available to the parties, who are parties to the Arbitration agreement. Whether because the remedy of Section 9 is available, the remedy of instituting the suit is ousted, is neither considered nor decided by the Supreme Court in Bhatia International’s case (supra). However, it is obvious from the judgment of the Division Bench in m.v. Indurva Valley (supra), that the Division Bench has taken a view that where a remedy of making an application under Section 9 is available, by virtue of the provisions of Section 5 the jurisdiction of the Court to entertain the suit is ousted. The judgment of the Supreme Court is Sukanya Holdings’ case (supra), has come after the judgment of the Division Bench in the case of m.v. Indurva Valley (supra). From the observations of the Supreme Court in Sukanya Holdings’ Pvt. Ltd. (supra), it appears that the Supreme Court has held that Section 5 does not operate to oust the jurisdiction of the Civil Court to entertain a suit which covers the subject matter of Arbitration. The jurisdiction of the Civil Court gets ousted only after an application under Sub-Section (1) and Sub-section(2) of Section 8 of the Arbitration Act is made and is decided. Perusal of Section 45 shows that the provisions of the section operates notwithstanding anything contained in Part-I. Therefore, Section 45 contemplates is suit being instituted in relation to the subject-matter of an agreement referred to in Section 44 notwithstanding the provisions of Section 5 which is found in Part-I as well as notwithstanding is the provisions of Section 9 which is also found is Part-I. In terms of Section 45, after institution of the suit in case one of the parties to the suit makes an application to the Court, the Court can refer the parties to Arbitration. But before making that reference the Court has to make an inquiry to find out whether the said agreement is null and void whether it is inoperative, whether it is incapable of being performed. A comparison of its provisions of Section 8 with Section 45 show that Section 8 operates in relation to Arbitration agreement out of which a domestic Award emerges. Section 8 does not confer jurisdiction on the Court, expressly to render a finding as to whether the agreement is null and void, inoperative etc. Whether, Section 454545 expressly confers that jurisdiction on the Court. Therefore, I find considerable substance in the contention raised on behalf of the plaintiff that the observations of the Division Bench in m.v. Indurva Valley’s case (supra), that because remedy of making an application under Section 9 is available by virtue of the provisions of Section 5, jurisdiction of admiralty Court to entertain a suit for security will not get ousted because of the provisions of Section 5, especially when it is an agreement out of which Foreign Award emerges. But it appears that the decision of the Division Bench in m.v. Indurva Valley’s case (supra), is also based on the fact that the charter party agreement was entered into in Mumbai. En the present case also the charter party agreement has been entered into in Mumbai. The ratio of the judgment of the Division Bench in m.v. Indurva Valley’s case (supra), appears to be that because the charter party agreement was entered into in Mumbai, this Court will get jurisdiction to grant relief under Section 9 of the Arbitration and Conciliation Act and, therefore, by virtue of Section 5 a suit of the same relief which can be claimed by a plaintiff in an application under Section 9 would get ousted by necessary implications. I am bound by this judgment of the Division Bench, though I find considerable substance in the submission made on behalf of the plaintiff that even when an application under Section 9 is maintainable the party is entitled to institute a suit in relation, to the subject matter of the Arbitration agreement and also to claim interim reliefs in that suit.
18. In the result, therefore, though in my opinion the ratio of the judgment of the Division Bench in m.v. Indurva Valley’s case (supra), cannot be said to be entirely correct, I am bound by that judgment and, therefore, following the judgment of the Division Bench in the case m.v. Indurva Valley’s (supra), I grant this Notice of Motion in terms of prayer Clause (a). It is accordingly so ordered. Notice of Motion disposed of.