Section 7(5) of The Arbitration Act III

The Bill of Lading makes it clear that the ‘merchant’ expressly agrees to be bound by all the terms, conditions, clauses and exceptions on both sides of The Bill of Lading whether typed, printed or otherwise. The Arbitration Clause is Clause 25, printed and annexed to The Bill of Lading.

The Respondent has expressly agreed to be bound by the Arbitration Clause despite the fact that it is a printed condition annexed to The Bill of Lading. It must be remembered that the Respondent has itself relied upon The Bill of Lading as part of its cause of action to recover the sum of Rs. 26,53,593/- in the suit filed by it. The Respondent, therefore, cannot blow hot and cold and argue that for the purpose of its suit, it will rely upon The Bill of Lading (though unsigned) but for the purpose of Arbitration, the requirement of The Arbitration Act is that the Arbitration Clause should be signed.

The present is a clear case where, under Section 7(5) of the Act read with Som Datt Builders, the reference in The Bill of Lading is such as to make the Arbitration Clause part of the contract between the parties.”

Hon’ble Justice R.F. Nariman, Caravel Shipping Services Pvt Ltd. v. Premier Sea Foods Exim Pvt. Ltd., [Civil Appeal Nos. 10800-10801 of 2018].