Madras High Court Broadly But Briefly vs For Judgment And Decree Against The on 18 December, 2009 DATED: 18.12.2009 CORAM THE HON'BLE MR. JUSTICE G.RAJASURIA A.No.4991 of 2009 in C.S.No.750 of 2009 ORDER Broadly but briefly, the relevant facts germane for the disposal of this application would run thus: (i) The plaintiff filed the suit seeking the following reliefs: For judgment and decree against the defendants jointly and severally; (a) for a sum of Rs.1,02,56,635.42 together with interest at 24% per annum from this date till the date of realisation in full; and (b) for costs of the suit. (ii) D1 after entering appearance, filed this application under Section 8 of the Arbitration and Conciliation Act seeking the following relief: To direct the respondent/plaintiff to refer the disputes to arbitration. (iii) Counter has been filed. 2. Heard both sides. 3. The point for consideration is as to whether the dispute involved in the suit should be referred to arbitration in view of clause 25 of Multimodal Transport Documents dated 13.09.2008 and 20.09.2008 read with Section 26 of the Multimodal Transportation of Goods Act and Section 8 of the Arbitration and Conciliation Act? 4. The parties are referred to hereunder according to their litigative status and ranking in the suit, for the sake of convenience. 5. Tour d'horizon of the learned counsel for the first defendant would run thus: (1) A plain reading of the documents, viz., Multimodal Transport Documents dated 13.09.2008 and 20.09.2008 would exemplify and display, that if there is any dispute arising under the Multimodal Transport Documents, the same should be referred to arbitration. However, throwing to winds the said stipulation, the plaintiff has chosen to file this suit. (2) The plaintiff in the pre suit notice dated 02.04.2009 elected to go for arbitration, but quite antithetical to the said election in going for arbitration, he has all in a sudden, holusbolus filed this suit seeking the relief as set out supra. (3) In fact, the pre suit notice found enclosed in the list of documents appended to the plaint is a cooked up one, because that notice was not at all sent by the plaintiff to D1, but some other notice was sent and in that alone, the plaintiff had elected to go for arbitration. (4) The contention on the side of the plaintiff that D2 and D3 are not parties to the said Multimodal Transport Documents and therefore, this suit cannot be referred for arbitration is a misconceived one. Once the goods are entrusted for carrying through D1 and when it passes through (i) the transporter and (ii) D2 and ultimately to the hands of D3, the terms and conditions in the Multimodal Transport Documents also are deemed to have passed from one to the other and in such a case, the question of separating the subject matter of the dispute partly as arbitrable and partly as not arbitrable does not arise at all. He also cited various decisions on his side. Ultimately, he has prayed for referring the matter to arbitration. 6. By way of torpedoing and pulverising the arguments as put forth and set forth on the side of the applicant/D1, the learned counsel for the respondent/plaintiff argued the matter; the gist and kernel, the pith and marrow of them would run thus: (1) This is a case, where, as per the arrangement/ agreement and contract, the goods were entrusted by the plaintiff to D1, who was expected to send them to his agent D2 in America through shipment and there, D2, the agent of D1 was expected to obtain the said nomenclatured Multimodal Transport Documents from D3, who was expected to pay the banker in USA the relevant consideration due under them and obtain the said Multimodal Transport Documents from the Bank, and whereupon, D2 was expected to hand over the goods to D3, but in this case, D2 without insisting upon or without receiving the said Multimodal Transport Documents from D3, simply released the goods in favour of D3; the Banker concerned in USA returned the said Multimodal Transport Documents to the plaintiff on the ground that no one paid the amounts under those documents and got them. Thereupon alone, this suit has been filed. If at all the said Multimodal Transport Documents were properly handed over by D3 to D2 and goods were obtained, then atleast there would be some substance in the contention of the learned counsel for the plaintiff that the terms and conditions in the said documents automatically passed on to D2 and D3 also, and that they are also bound by the arbitration clause. (2) In fact, the so called Multimodal Transport documents in stricto sensu cannot be nomenclatured as such in view of Section 2(k) of Multimodal Transportation of Goods Act, 1993, (for short M.T.G.Act) which is extracted hereunder: "2(k) "multimodal transportation" maeans arriage of good