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Wednesday, 12 October 2011

UASC of UAE and Kuwait and Killick Marine Services of Mumbai / 100+ pages

In continuation of this post here pertaining to Deepak Divekar's heroic resoluteness for the Truth to Prevail . . .and names to remember are:-

 Capt. P.R. Dordy (of Jeremy Hart "Independent" dabbawall fame) and Farshid Savaksha of Killick Maritime.

IBN Abdoun's Master Mohd. Ayaz and C/Off Arshad Malik, both of Karachi, Pakistan

A bit of a long post in the first isntance - but simply wonderful.

Killick Maritime needs to review things, and so do the other "management companies" and people in shipping who think that by signing "as agents only" htey have no responsibilities, accountabilities or liabilities.



Deepak Divekar   ……. Claimant
1. United Arab Shipping Co. (SAG)
2. Killick Marine Services Ltd          ……………..  Respondents   


      1.1. When the Claimant filed this Arbitration in the year 2002 he was 48 years old. He was a 2nd Officer on his way to becoming Mate and then Captain. He had at least 20 good years of a Mariner’s life before him. What happened in the year 2000 and its aftermath effectively and eventually put an end to his professional life. When on the 15th September 2003 he made his Affidavit by way of Exam-in-chief  he had been 14 months without a job, despite all his efforts (Affidavit-in-chief paragraph 11). Since then he has had to abandon his Maritime career. In November 2004 he became a Manager with Tops Security Agency He manages to make a living, but this is not work for which he had professionally qualified himself, and he earns no more than a fraction of what he would have earned had he retained his place in the Maritime world. 
      1.2. The events ultimately stem from an incident that took place on the 23rd July 2000 in the course of a voyage from South America to Russia. But that is by no means the largest part of it. What is by far the largest part of it is the decision of the Respondent deliberately to set about destroying the Claimant’s career. They succeeded only too well, and the Claimant’s prayer for damages stems from the action they took.
    • The claim for medical expenses totals to Rs. 78,000; the claim for wages comes either to Rs. 1,51,340 (for 84 days) or Rs. 4,37,920 (for 90 days at full wages);
    • In comparison, the claim for Defamation (achieved through the Respondent having the Claimant blacklisted in the industry) comes to Rs. 1,22,95,400 (as formulated on the basis of the Amendment to the Statement of Claim)

      1.3 The most extraordinary feature of this Arbitration is the Respondent's response to the Claim. Notwithstanding the predominance of the claim for Defamation in the corpus of the Claimant's Claim, the Respondent has directed the bulk of the evidence it has chosen to lead and the submissions it has filed to the fractional claim for medical expenses and wages. Thus out of the 14 paragraphs of the Affidavit-in-Chief of the Respondent's Mr Shavaksha only one (paragraph 12) is devoted to the Defamation claim. Out of the Written Submissions originally furnished by the Respondent only 4 out of 35 pages were so devoted. Out of the 84 pages of Supplementary Submissions furnished only 14 pages were so devoted. Either the Respondents have little to say on the Defamation Claim or they would prefer not to say it. 
      1.4 The second astonishing feature in the Respondent's answers to the Claim in Defamation is that it makes no effort whatsoever to justify a single one of the 6 defamatory charges it laid against the Claimant before the DG Shipping and the one charge (of stealing the ship's log books) laid against him in the course of the Arbitration. This must be a feature unrivalled in Defamation jurisprudence. And it must be borne in mind that the charges were among the most serious that can ever be laid at the door of a maritime Officer. Not one witness who had knowledge of what had transpired on the vessel, Al Abdoun, was called to substantiate a single charge. It is extraordinary that the Respondent  could go to the length of making such bitter accusations against Mr Divekar, and yet when challenged before an august Tribunal make not the slightest effort at justifying them. The Courts have repeatedly stressed that the greater the gravity of the accusation (either of fraud or wrongdoing) the heavier the burden of proof. The charge of virtual mutiny on the 16th September 2000, the charge of  instigating the crew against other nationalities, of deliberately feigning illness, of fomenting disharmony, of assault against a brother officer, and, finally, of  stealing the Ship’s Log Books – all these, if true, were capable of being testified to by officers and crew. Instead of calling such a witness, it rested its case on the testimony of someone, Mr Shavaksha, who repeatedly asserted that he was never there and had no direct knowledge of what happened on the ship. It is not just a matter of adverse inference, though adverse inference stares us in the face in this matter. Refusal to lead evidence to support such brutal charges is more than that. It is, in truth, an aggravation of the offence.  
      1.5 Given the significance of the Defamation Claim, these Written Submissions will take up the said topic immediately after this General Conspectus (Section I) and Legal Foundation (Section II), and thereafter proceed to the less significant claims of medical expenses, wages. In all that follows the Claimant will adhere strictly to the written and oral submissions submitted to the learned Tribunal and no further. 
      1.6. To summarize the evidence. The evidence unquestionably establishes that on the 23rd of July 2000 the Respondent’s vessel, the Al Abdoun, took on board 100 mts of non-potable water. It shows that that water was loaded into the ship’s freshwater tanks for domestic use of the crew. It shows that Mr Divekar protested against this course of action, but that his protest was turned aside with disdain. The evidence establishes that some 6 other members of the crew fell ill in consequence; that Divekar too fell ill. So matters rested till the 16th September, a couple of months later. Divekar who had been repeatedly requesting the Master to let him get examined by a medical examiner ashore, finally wrote a letter officially requesting he be allowed to go ashore for medical examination. And in the course of the letter he did the inexcusable: he brought up, clearly and explicitly, the events of the taking on of non-potable water at St. Eaustatius. Now one can only guess at the complicity of the vessel Owners in that transaction, or that of the subsequent Master in its suppression, but the fact remains that Divekar’s action in writing that letter  brought upon his head an extreme retaliation that he could never have imagined.
      1.7. By the afternoon of the very same day, the 16th September 2000, the Master had drawn up a virtual indictment. In  the ship’s Official log book (Comp. p. 147-148) he started by conjuring up an event so disgraceful to Mr Divekar, so shameful and so discrediting that would damn him in the eyes of anyone who read it. It described Mr Divekar as barging into the Captain’s Office on the ship at 8 pm the previous evening in a state of utter drunkenness, declaring that he would not maintain the navigational books, that he will not allow his Chart corrections to be checked by the Master  and above all, that he will not answer only the questions put to him and no other (whatever that means). The Master went on to say that when Divekar was confronted the next morning with this recording of his behaviour he roundly declared that “it had no meaning for him” and refused to sign it even in acknowledgement. Naturally he was, says the Master, immediately removed from Bridge and Deck watch.  
      1.8. The aim of this Log noting was to discredit in advance anything that Mr Divekar may feel called upon at any time in the future to say on the matter of the non-potable water. Side by side with this the Respondent prepared a Confidential Report (Comp. p. 172) that described Mr Divekar as addicted to “heavy consumption of alcohol”, and as given to shouting and abusing the crew. Most interestingly, the report carries the following Note:
      “He intend to lodge claim against UASC as per enclosed application”.
This is a most telling remark. The one item of “Interest” that needs to be singled out and noted by Management. It reveals at one stroke the whole cause and purpose of blackening the Claimant’s name.  
      1.9. That the Log Book noting was a lie from start to finish can simply and straightforwardly be demonstrated. The refutation will be found in paragraph 3.7   hereinbelow.  
      1.10. On the 16th September 2000 itself Divekar was offloaded from the ship at the port of Callao in Peru and sent for medical checkup. He was examined at length by the Doctor there who issued a report finding that he was medically unfit for duty, and the Respondent sent him home. He was discharged on medical grounds. But when Divekar went to meet the 2nd Respondent who were the 1st Respondent’s local agents in Mumbai, they refused to provide for his medical relief as, under the terms of the Contract, they were bound to do and told him to look after his own medical treatment.  
      1.11. Mr Divekar was not one to take things lying down. By 11th November 2000 he was medically certified as being capable of taking up service, but no offer from the Respondent to retake him to enable him to complete his 7 month contract (due to end by January 2001) ever came. His medical expenses that by that time had amounted to over Rs 78,000 were not paid, nor his claim for wages for the remainder of his terms of service. So, on the 11th December 2000 he approached the DG Shipping with a complaint that all his dues not been paid to him. The DG Shipping wrote to the Respondents forwarding the complaint.  
      1.12. Mr Divekar was, quite clearly, not going to go away. An inquiry by the DG Shipping of India is (even to an Arab Company) not a laughing matter. So the Respondent came to a brutal decision to go on the offensive. They resurrected the old Log Book entry, they hauled out the Confidential Note, and submitted both to the DG Shipping. Neither of these had been acted on. Mr. Divekar had been released from the vessel on medical grounds. But challenged by the DG Shipping the Respondents brought every conceivable charge to bear. In addition to alcoholism, and shouting at the crew the Respondent added the charge that he used to instigate the crew against other nationalities on board and that he had (on another earlier voyage) physically assaulted a 4th Engineer. He was lethargic, had a habit of creating disharmony on board and also the habit  of visiting the doctor in almost all ports (Respondent’s letter dated 19th January 2001 to the DG Shipping at Comp. p. 172A).  
      1.13. In her Question 360 Respondent’s Counsel put to the witness that all these communications had been made by the Respondent to the DG Shipping and not to the recruitment officers of shipping companies. Learned Counsel got the answer that the question deserved:
”The D. G. of Shipping is the highest authority in shipping. If the D. G. is told such things it is the end of my shipping career.”

      1.14. The falsehoods fed to the DG Shipping were enough to convince the DG Shipping of the Claimant’s unworthiness. In his letter dated 5th March 2001 (Comp. p. 162) the DG recited what the Respondent had conveyed to him. Without any more ado the DG said this:
      “In view of the above, this Directorate is not in a position to assist you in this regard.” 
      1.15.   In oral submissions before the learned Tribunal the Respondents would have us believe that despite the viciousness of their response to the DG Shipping's request for information they kept a discreet and virtuous silence about the Claimant when it came to fellow shipping and recruiting companies.  This is disproved by what met the Claimant immediately when he first applied to foreign shipping companies for employment. He who had never had any difficulty before in obtaining employment in foreign ships found himself turned away by all. His C.D.C (Continuous Discharge Certificate) book (Ex C-2, Compil. p. 11-48) shows that from February 2001 to October 2004, his only employment was with Indian shipping companies (whose pay is substantially lower than foreign companies).  His C.D.C Book shows that even his employment with Indian ships ground to a halt, with the last employment being on the Gem of Madras from 5th August 2002. Mr Divekar has testified that even during the course of his dwindling employment he was told in no uncertain terms that he was under blacklist and was lucky to get the job.  
      1.16 The Claimant has led evidence to show that blacklisting is a prevalent practice in the Shipping world. It stunts careers and destroys professional reputations. Mr. Divekar was blacklisted - to use the words in the Claimant's Statement of Claim: his name was tarnished in the industry. In fact, the Respondent did not even seek to deny it. In paragraph 9 of the Statement of Claim the Claimant specifically averred that
      “the Respondent did everything in their power to blacklist the Claimant, which resulted in denial of contract of employment to the Claimant in any foreign vessel.”
The original Written Statement (para 18) made no denial of this statement. The same allegation was repeated in paragraph 20 of the Statement of Claim and again not denied in paragraph 28 of the Written Statement. The matter of blacklisting only came to be dealt with in detail by the Respondent when it came to file its Additional Written Statement (in paragraphs 3 and 4 of the Additional Written Statement) and that too in a most curious manner.  The plea of blacklisting and tarnishing of name is described as irrelevant, not supported by evidence, based on hearsay, and made in frustration, but an averment that the Respondents did not, as a  matter of fact, blacklist or tarnish the name of the Claimant is conspicuous by its absence.  
      1.17.  The final crucial feature in the Claimant's claim for Defamation damages is that apart from a  vague denial in paragraph 22 of the original Written Statement ("these Respondents deny that the Claimant is entitled to any of the items of claim in the Particulars of Claim") no issue was taken by the Respondent as to the actual method of quantification of  the Claimant's Claim for defamation, in other words, there was no denial that the Claimant had actually suffered the items of claimed loss. The denial is solely confined to his right to recover these from the Respondent.  This was continued in the Written Submissions, both as originally filed and as supplemented by Respondent's Notes. No denial or criticism of the actual method of the Claimant's quantification of the damages suffered has been either averred or argued. Should the Respondent in its final Written Submissions seek to make up for its decision not to contest the question in pleadings and hearings, such afterthought cannot and ought not to be countenanced. 


      2.1 The Claims in the present Arbitration fall under two main heads:                   First, the claims for medical expenses and balance wages                                                    Second, the claims for damages arising from the professional defaming and blacklisting of the Claimant.


      2.2.1  The claim for medical expenses is founded on Cl. 9(a) of the Agreement. There is and can be no real defence in principle to the Claim for wages and medical expenses under Cl. 9(a). The Claimant’s services were never terminated; on the contrary he was signed off the ship for medical reasons. At no point of time did the Shipowner exercise power under Cl. 2 of the Agreement to terminate his service for any reason at all.. Except to say, as the Respondent’s witness Shavaksha has done, that because of the internal arrangement between the 2nd Respondent and the 1st Respondent the Claimant cannot be paid by the 2nd Respondent unless he has had himself checked in with the 2nd Respondent’s Doctor, there is no other real defence. The Claimant’s claim cannot be denied because of the internal arrangement between the Respondents. Under Cl. 19 of the Agreement, the Claimant is specifically bound by the Owners’ Rules and Regulations. No Rule or Regulation has been shown or brought on record laying down the said procedure. Thus, even if there was such a procedure it is not mandatory and cannot be used to deny the Claimant’s medical claim.


      2.3.1 The claim for basic wages is founded on Cl. 9(a) which states that he shall be entitled to full basic wages (which was $1,150 per month) for the period of 84 days. At the exchange rate of Rs. 46 = $1 that came to Rs. 1,51,340. This is a simple liquidated claim.


      2.4.1 The claim for full wages (which was $2,380 per month) is calculated for the remaining 3 months of the contract that the Claimant was unable to fulfil and amounts to Rs. 4,37,920. This is a claim founded on the Respondent’s breach of contract. The breach complained of is the failure on the part of the Shipowner in providing unsafe and non-potable drinking water to the Claimant (as also to others on board).
      2.4.2 The Claimant submits that like every contract, the service agreement has implied terms. One implied term must be that during the period of his service on board the ship, the Shipowner  shall take all proper steps to ensure the crewman’s safety and wellbeing. The crewman places himself at the Company's disposal and subjects himself to the Company’s discipline. With that power over his life comes responsibility, and the duty – which is an implied contractual duty - to take care of the crew is one product of the responsibility that goes with power. The Claimant fell ill in consequence of the Respondent’s breach of that duty. Had the said failure of duty not occurred the Claimant would have duly completed the 7 month contractual term. The claim for damages of Rs. 4,37,920 represents the wages he would have earned for that uncompleted period. In any event, and quite irrespective of the cause of the Claimant’s illness, the fact remains that he was taken off the ship and repatriated to India at Respondent’s expense; his services were never terminated. Thereafter, his illness over, the Respondent was bound to re-employ him till the completion of his term of contracted service. Admittedly they refused to do so. They are bound to make good the wages he would have earned had he been allowed to serve.
      2.4.3 If the said claim for full wages be allowed, the claim for basic wages (for Rs. 1,51,340) becomes surplusage.


      2.5.1 Under the Amended Statement of Claim the total damages claimed arising out of this head came to Rs. 6,00,000 (wage rate differences) + 1,14,95,400 + Rs. 2,00,000 (mental agony) = Rs. 1,22,95,400. 
      2.5.2 One of the points taken by the Respondent is that the Claimant's Claim never was for Defamation, but for Blacklisting, which, according to the Respondent, is a cause of action quite distinct from Defamation.  The basic document in resolving this issue is the Claimant's Application under Section 11 of the Arbitration and Conciliation Act dated 25th  June 2001 (Comp. p. 304), for this forms the basis of the Reference to Arbitration. In paragraph 14(b) of the said Application (at Comp. p. 316), the Claimant pleaded the "ingredients of  the dispute" in the following words:
          "Petitioner's right to compensation for misleading and giving false and fabricated information to highest authority in shipping, the Director General of Shipping Companies, and to other ship owners and thereby closing the door for employment in a foreign shipping company forever which is a problem arising out of the contract of employment…"
If this does not spell out a cause of action in Defamation it is difficult to see what would. The absence of the word "Defamation" makes not a whit of difference - the issue is one of substance. 
      2.5.3 It goes without saying of course that Defamation is, under the Common Law applicable to India, a Tort. What is interesting, however, is that in the aforesaid passage the draftsman refers to it as one arising out of the Contract of employment. The fact is that the present claim in Defamation sounds both in contract as well as in tort. The Claimant submits that the foundation of the claim in contract is to be founded on an implied term in the contract, that the Shipowner shall not without fair and true cause defame and tarnish the professional reputation of the seaman.  
      2.5.4 A crew member’s tenure is only for 7 months. His career extends well beyond that and is dependent on his constantly securing new work after one contract is done. Furthermore, the Maritime world is small and close-knit. When a crewman joins service for this limited time he puts not merely his life but his reputation into the hands of the Ship Owner. It must clearly be an implied term of the Agreement that that power must not be abused. Thus the duty not to defame the Seaman who has worked for the Owner must plainly be implied into the Service Agreement.  
      2.5.5 The fact that in the circumstances of the present case the Claimant's cause of action sounds in Contract (i.e the defamatory acts were breach of the Claimant's contract of employment) in addition to Tort is of crucial importance when it comes to the issue of Jurisdiction.   
      2.5.6 In what follows, these Written Submissions will now deal in detail with the Defamation Claim. It will divide the ingredients of the said Claim into 6 questions, and deal with each separately:
      (i) The truth or otherwise of the accusations made by the Respondent against the Claimant;
      (ii) Were the accusations spread in the maritime community of shipowners and ship agents;
        (iii) Was the Claimant's lack of shipping employment a consequence of the communication of the said accusations, or was it voluntary;
      (iv) What is the quantum of the Claimant's loss, if any, on this account;
      (v) A Supplementary Question: In any event, was the Claim for Defamation a mere afterthought and thus unworthy of credence.
      (vi) Is the Defamation Claim, or any part of it, outside the Tribunal’s Jurisdiction?

  III. DEFAMATION   QUESTION 1: The Accusations of Misconduct Against Mr. Divekar

      3.1 Preliminary Submissions

      3.1.1 The first question in any Defamation action is whether the defamatory statements made against the Claimant are true. Thus, this is the first point to be considered in these Written Submissions.
      In considering the accusations of misconduct against Divekar the following preliminary principles apply:
      A. As in any action for defaming, the burden of proof lies upon the person who makes the allegation.
      B. Where an accusation is made of fraud, serious misconduct or turpitude the burden of proof is not light. In fact, the graver the charge the heavier the burden of proof.

3.2 The Accusation of Drunkenness

      3.2.1 The first allegation of drunkenness comes in the Master’s entry in the Official Log Book of the 16th September 2000. (Comp. p. 147) where he is said to have been accused by the Master of heavy consumption of alcohol. The next is in the 2nd Respondent’s letter to the DG Shipping dated 19th January 2001 (Comp. pg. 172A) where he is described thus:
          “2nd Officer Mr Deepak Divekar is a drunken and abusive officer who has been logged down by the Master and repeatedly warned many times on both his vessels.” 
      3.2.2 Divekar was asked in Exam-in-chief (Q. 122-123) on this issue. The ship was following the Islamic Regulation which prohibited even the presence of alcohol on board the ship. He has testified that he did comply with the Islamic Regulations.  
      3.2.3 Of course, no witness has come forward to tender evidence to support the Respondent’s accusation. There can be no doubt that had he been guilty it would have been noted in the Official log book. No such log book has been tendered. This is all the more extraordinary, given that he has been accused of being “logged down” and repeatedly warned many times on both his vessels. Can it be that Divekar has stolen the Official Log book of the other vessel as well?  
      3.2.4 In his letter to the DG Shipping dated 12th March 2001 (Comp. p. 337) Mr Divekar stated:
          “I have been working with Killick Marine Services for past four contracts and if I was in the habit of drinking (as alleged by Killick) then why did they keep on employing me in the first place?”
In the Certificate of Watchkeeping and Conduct dated 1.6.98 (Comp. p. 111 at p. 112) the Master of the Ibn Abdoun certified to both Mr Divekar’s conduct and sobriety;
      “V. Good”
The absence of evidence from the Respondent is overwhelming.  
      3.2.5 Respondent's Counsel made no attempt even to put the accusation to Mr Divekar in his Cross-examination. 
      3.2.6 The record points to only one conclusion. The accusation is totally untrue.

3.3 The Accusation of Creating Disharmony and Agitating the Crew

      3.3.1 The allegation is first made by the ship’s Master in an email to the 1st Respondent dated 16th September 2000 (Comp. p. 145-146):
          He has started giving political colour to this warning and creating an issue of Pakistani and Indian on board by saying that Pakistan and India are enemies and fabricating all sort of false accusations.” 
             3.3.2 Given the fact that the “warning” that the Master refers to was given by his own admission at 12.30 p.m. on the 16th September 2000 (please see the opening words of the Master's said letter at the bottom of page 145) and that Divekar went ashore off the ship on the same day, there seems very little time for so much activity. Surprising too that no noting was made in the Official log book entry of the 16th September 2000 for such a serious offence against ship discipline.  
              3.3.3     Mr. Divekar was not even confronted in cross-examination with this accusation or the accusation of drunkenness. 
      3.3.4 By the time it comes for the Respondents to furnish a response to the DG Shipping’s enquiry, what was originally a one-time accusation of instigation now takes on the colour of a continuous course of misbehaviour.  This is how the accusation is made in the 2nd Respondent’s letter to the DG Shipping dated 19th January 2001 (Comp. p. 172A):
    “He used to instigate the crew and officers against other nationalities on board..” 
      3.3.5 This is yet another gross instance of rank falsehood and misrepresentation.

3.4 The Accusation that Mr. Divekar was lazy and lethargic in his Duties

      3.4.1 The accusation is made in the 2nd Respondent’s letter to the DG Shipping of 19th January 2001 (Comp. p. 172A):
    “He has been reported as lazy and lethargic in his work…” 
      3.4.2 Once again the charge is made and left unsupported. The damage, however, is done. The Certificate issued by the Master of the Ibn Abdoun on a previous voyage (please see 4.2.4 above) is ignored with the sole aim of poisoning the mind of the DG Shipping.

3.5 The Accusation that Mr Divekar was in the habit of visiting the doctor in almost all ports and tried to get down on medical grounds

      3.5.1 The accusation was made by the 2nd Respondent in its letter to the DG Shipping dated 19th January 2001 (Comp. p. 172A) on the basis of the 4 voyages that the Claimant had done with it. It is true that Divekar had fallen ill on the previous voyage and had been signed off – as he had been in the present case – on medical grounds. But there was never the slightest doubt of the genuineness of his illness. In fact, the Respondent paid the medical costs of his previous voyage. Please see Comp. p. 153 for the payment made for his sickness claim when he fell ill on the Ibn Al Moataz. 
      3.5.2 That was the sole basis on which the accusation was made. Once again no attempt was made to establish the charge.

3.6 The Accusation that Mr Divekar assaulted the 4th Engineer on the previous voyage

      3.6.1 This was the next charge made against Mr. Divekar in the 2nd Respondent’s letter to the DG Shipping:
      “(Divekar) had physically assaulted a fourth engineer on his previous vessel.” 
      3.6.2 Not one tittle of evidence of this grave charge has been led. If it had happened it would surely have been logged. 
      3.6.3 It is not even put to Mr. Divekar in Cross-examination.

3.7 Accusation regarding the alleged Drunken conversation on the 15th September 2000

      3.7.1 The accusation is set out in the Master’s entry in the Official log book dated 16th September 2000 (Comp. p. 147-148) and states that Mr. Divekar had entered the Master’s cabin on the 15th September 2000 at 8 p.m. in a totally drunken state and had declared that he would not keep the navigation books, allow the Captain to check his chart corrections and answer only questions that were asked of him. He was so drunk that he had to be sent off to bed. 
      3.7.2 This was a most serious and damning charge. It was a charge of rank insubordination. No one who was told of it could have any professional regard left for Divekar. Yet once again the charge is left completely unsubstantiated.  
      3.7.3 These are proceedings in which a seaman is fighting for his professional reputation, and the defamer offers no evidence.  
      3.7.4 In assessing the truth of the statement regard should be had to the Deck Log Book entry of the 16th September 2000. The Log book of the 16th September 2000 (Comp. p. 240) shows that Mr. Divekar had kept the 12 midnight to 4 a.m. watch (and again the Noon to 4 p.m. watch). Is it conceivable that the Master would allowed a drunken officer – so drunk that he had to be sent to bed at 8 p.m. – to take charge of the navigation of the ship at the midnight watch (starting 12 midnight)? 
      3.7.5 The Master’s noting in the Official Log Book (Comp. p. 147-148) goes on to allege that at 12.20 p.m. on the 16th he warned Mr. Divekar of his behaviour and also warned him of dismissal. 
      3.7.6    Now the Deck Log Book entry of the 16th September 2000 (Comp. p. 240) shows that Mr. Divekar was handling the navigation of the ship from 12 p.m. onwards on the 16th September 2000. Is it conceivable that the Master would confront an Officer with an official charge and threat of dismissal at a time when the Officer concerned is navigating the ship? Please see the Exam-in-chief of Divekar (Q. 125 to 127) where the Claimant stated the obvious, namely, that it is never the practice to confront an officer when he is engaged in navigation. What he says there stands to good reason. 
      3.7.7 The Master has further stated in e-mail dated 16th September 2000 (Comp. p. 145-146) to the Company that after reprimanding Mr. Divekar he removed him from the watch. That is comprehensively contradicted by the Ship’s own Deck Log (Comp. p. 240) which clearly and unambiguously shows Mr. Divekar as having kept the watch for the whole period of the noon to 4 p.m. watch. 
      3.7.8   Finally, if the accusation of gross insubordination on the part of Mr. Divekar were true, what explanation can there be for the fact that he was signed off from the ship purely and simply on medical grounds? Not one witness has come forward to provide an explanation for this extraordinary inconsistency. 
      3.7.9   The most probable inference is that Mr. Divekar’s letter of the 16th September 2000 (Comp. p. 144) with its reference to the taking on of non-potable invited retribution. In order to counter that obvious inference the Master has alleged that Mr. Divekar’s aforesaid letter (pg. 144) actually came after his Log Book noting and not before. The Master states in his said e-mail  to the Company (Com. P. 146):
          “He has given a letter after issuing him the warning stating that he is suffering from loss of memory, mental irritation, deterioration of eye sight and all these factors are affecting his efficiency…”
This is falsified by the timing noted at the bottom of  Mr. Divekar’s said letter which shows that it had been handed over to the Chief Officer at 4 a.m. of the 16th September 2000, whereas the making of the Log Book entry was at 12.20 p.m. or so. The Master’s attempt to rebut the inference that his action against Mr. Divekar was prompted by the contents of Divekar’s letter stands refuted. 
                3.7.10    There is not a tittle of evidence to support the Master’s noting and everything on the record runs counter to it.

3.8 The Accusation that the Claimant stole the Ship’s Official Log and Medical Log

      3.8.1 This accusation, though it is of the utmost seriousness, was not part of the accusations levied against the Claimant at the time when the 2nd Respondent wrote the letter to the DG Shipping on 19th January 2000. It came to be made only after the Claimant in his letter to the DG Shipping dated 12th March 2001 (Comp. p. 337) told the DG Shipping:
          “The medical log  has the entries of all those who were sent to the Doctor for stomach ailments. The medical log has my signature as the medical officer and also the signature of the Master..” 
           3.8.2 Confronted with the possibility of the medical log being used against it (and the Official log in which the medical entries were also entered) the Master wrote to the Company stating that the Official Log Book and Medical Log for the period were “not found on board” (Comp. p. 164). This gave rise to an interesting exchange between the Respondents and their advocates (Comp. p. 165) in the course of which the question was asked by the 2nd Respondent why no police complaint had been filed when the Logs went missing. Then on the 30th April 2002 came a letter from Messrs Bhatt and Saldanha (Comp. 166) to the Claimant’s Advocates saying:
    “Our clients have instructed us to place on record that as regards the Office Log Book and the Medicine Log Book, your client has admitted to Killick Marine Services Ltd that he is in possession of both these books. The same were clandestinely taken away by him at the time of signing of from the vessel.”
On the Claimant denying the charge, Bhatt and Saldanha amplified the accusation thus:
    ” Our clients have evidence of the admission made by your client of taking away the Official Log Book clandestinely and such evidence will be produced at the time of hearing.” (Comp. pg. 167) 
      3.8.3 A pattern of conduct emerges from all this, and the charge of stealing is part of that pattern. Whenever the Respondent is faced with an issue, its response has invariably been to counter with an accusation. There was nothing whatsoever to indicate that the Claimant had stolen the documents, but that it in no way prevented the Respondent and its Advocates from making the charge. 
      3.8.4 In exam-in-chief Divekar roundly and emphatically denied the charge. Once again, the extraordinary fact is that in Cross the charge was never put to him. 
      3.8.5 Let it be tested whether the Log Books were taken at all. If the Official Log was stolen, how did the Master come to pass on a copy of the extract dated the 16th September 2000 from the very same Log Book to the Owner on the 17th September 2000 (Comp. p. 145)? From where was he able to resurrect the Log Book? 
      3.8.6 The Official Log Book is the most important official Book of the ship. It has to be presented for inspection to Port authorities, it is in constant use. How is it that there is no mention whatever of the loss of the Official Log till the year 2002? 
      3.8.7   The Claimant went off the ship at Callao on the 16th September 2000 and the ship left Callao Port on the 17th September 2000. When would the Claimant have had an opportunity to steal the Official Log? Surely in view of what had transpired, the Master would not have left the Official Log accessible to the Claimant? Why is it that when the Master wrote to the Owners on the 17th September 2000 and refers to the Official Log he does not notice that the said Log Book is missing?  
      3.8.8 Finally where is the evidence for Bhatt and Saldanha;s statement that the 2nd Respondent had in its possession evidence which would be disclosed at the time of the hearing? In the Cross of Shavaksha the issue is dealt with in Questions 75 to 82. The learned Tribunal will judge from the said Testimony not just the value of the charge (which is, it is respectfully submitted, nil) but the very bona fides of the Respondents. It is extraordinary that allegations should be made through Advocates without the slightest regard to their truth. Once again the Respondent’s pattern of conduct emerges. 
      3.8.9 In the circumstances, it is respectfully submitted that there is not a shred of truth in the allegations and accusations that were laid against Mr. Divekar. They were untrue, but they were also made with a motive. In making them to the highest shipping authority in the land the Respondents knew full well and indeed desired that the Claimant’s name would be blackened in the Marine community. And that is the subject matter of the following Section. 

IV. DEFAMATION    QUESTION 2: Did the Respondents disseminate the said accusations within the maritime community of shipowners and ship agents?

      4.1 As is clear from the Claimant's pleadings, by the plea of “Blacklisting” (used interchangeably with the phrase "tarnishing the Claimant's career") is meant the conveying of accusations against a Maritime officer or seaman, with the intent that he be debarred from obtaining work on ship. 
      4.2 It is essential in the first instance to bear in mind that the Respondent does not deny that it blacklisted Divekar. In this connection please refer to paragraph 1.16 (page 6) hereinabove in these Written Submissions where detailed submission is made on this account. When the Claimant's pleading of Blacklisting is addressed in the Written Statement (paragraph 3 of the Additional written Statement) the Respondent's pleading is shifty and visibly evasive. Any number of points of issue are taken against the Claimant’s specific plea, but deliberately not one denial of the plea itself. On a purely factual issue, and one as vital as this, a straight-forward answer was called for, and deliberately sidestepped. 
      4.3 That the practice of blacklisting exists in the Shipping Industry is evident from the letters submitted by the Claimant. They are to be found at pages 107 to 117G of the Claimant’s Compilation. The Claimant even called the evidence of Capt. Anand S. Kapoor and of Shri O. P. Kapur in proof of the existence of this practice.  Capt Anand Kapoor testified to having sent a letter to FOSMA (Foreign Ship Management Association) in regard to a seaman to circulate to manning/recruiting agents (Ex 37A). He stated in answer to Question 7;
          “Q. 7. To the best of your knowledge at the relevant time, ie 1997 was it a practice to issue letters of this kind to manning/recruiting agents?
          A. Yes, it was a practice to inform other manning agents regarding any incidents taking place on the ship. This practice still continues.” 
      4.4 Shri O. P. Kapur was the Secretary of FOSMA in the year 1997 and testified that he had received a blacklisting letter from Messrs Wilco Shipmanagement & Travels Pvt Ltd blacklisting a seaman which he circulated. He testified (pg. 118 of the Claimant’s Evidence) that :
          “Such acts of indiscipline are normally reported to the Association for circulation among the members such as FOSMA and other members. The reason is that the Association is involved in similar recruitments…. The recruiting officers will take all precautions before recruiting a person so that the concerned person will not indulge in this type of indisciplined acts when sent on board to work on the principal’s flag vessels.” 
              4.5     In his Exam-in-chief the Claimant testified thus:
          “Q. 140. In the Shipping industry what kind of action do Shipping Companies take against the officers or crew against whom they have a grudge?
          A. In such an event, the shipping company will report the person concerned to the Directorate General of Shipping, Shipping Master, FOSMA, INSA (Indian National Ship Owners Association) and also circulate the name and particulars of the concerned person to all the shipping agents and to the recruiting agents. The concerned officer however is not officially informed about all these.” 
      4.6 In view of the Respondent’s non-denial in pleadings that it had blacklisted the Claimant, actual proof of blacklisting is not called for. It is indeed a difficult fact to prove, for, as stated by the Claimant, the officer himself is not told of what is being done. However, even without proof of communication to the other shipping companies or agents, the evidence of the Respondent’s accusations against the Claimant to the DG Shipping are on the record. This is not because the Respondents copied their communications with the DG Shipping to the Claimant but because the DG Shipping was good enough to provide the Claimant with copies. Proof of those communications is itself proof of defamation, for poisoning the mind of the highest authority in the land is the most effective form of defamation. The DG Shipping is, under the provisions of the Merchant Shipping Act 1958 the highest Statutory authority whose jurisdiction extends over the entire Maritime Industry. References are made to the Directorate by every Shipping Company, and blackening a seaman’s name in the Directorate has repercussions throughout the Maritime Industry. It is for that reason that the Claimant stated in answer to Q. 360 in Cross:
          ”The D. G. of Shipping is the highest authority in shipping. If the D. G. is told such things it is the end of my shipping career.” 
      4.7 What is also vital to note is that in their communication to the DG Shipping dated 19th January 2001 (Comp. pg. 172-A) the Respondents, after setting out at length their false accusations, went out of their way to appeal to the DG Shipping thus:
      "Unfortunately it is officers/crew like these that are giving our Indian Seamen a  very bad reputation."
The Respondents knew well that the DG Shipping is in very truth the statutory guardian of the Indian Shipping Industry, and guards jealously the standing of Indian seamen. To such an Officer an appeal invoking the larger interests of Indian shipping and Seamen could be nothing short of a provocation, a provocation to intervene and ensure Divekar's blacklisting.  
              4.8    Yet, when confronted, the Respondents reply in all innocence that they never intended their accusations to spread beyond the confine of the DG Shipping's office.  
                4.9   The Claimant submits that even if it be assumed that the Respondents took no further steps to spread the poison of their accusations beyond the DG Shipping's office, accusations couched in these terms were enough to ensure the end of the Claimant's marine career.  
                4.10       But given the viciousness of the Respondent's accusations, and its deliberately provocative appeal to the DG Shipping, coupled with the extraordinary evasiveness of the Respondent's Written Statement in dealing with the Claimant's averment of blacklisting - what is the probability that the Respondent restricted its invective to the DG Shipping alone? What is the probability that the 2nd Respondent, in a sudden flush of virtue, shyly refrained from conveying to its fellow recruiting agents what it had no hesitation in strenuously asserting to the DG Shipping? Even in the absence of direct proof, a Tribunal of fact is not powerless to draw its own conclusions founded on clear probabilities.  
                4.11     It has been said of fraud that the best proof of it is found in its effects. This is because those who commit it do not advertise their acts, and proof is thus often indirect. In the present case the effects of blacklisting is described in Divekar’s evidence in answer to Q. 142 of his Exam-in-chief (page 32 of the Claimant’s Evidence File). It describes at length the efforts he had to make to obtain maritime employment.
  • His first employment after the incident was on the mv Kabirdas which he joined on 8.2.01 but had to leave prematurely because of his father’s sudden ill-health.
  • He joined the Indian vessel Radiant Sun where he worked from 18.4.01 to 18.8.01 at the end of which he was told by the Company’s Capt Khatwani that he should be thankful he could get even that employment because he was a blacklisted seaman.
  • He then obtained work with the mv Jag Rahul from 7.12.01 but was ordered to be signed off by the Captain who was not willing to give reasons for his action, citing only that he was acting on his Company’s instructions.
  • He finally worked with the vessel mv Gem of Madras from 4.2.02 to 5.8.02. After successful completion of that contract he was denied further renewal, and was told that the reasons would not be disclosed to him.

        4.12     In paragraph 11 of his Affidavit dated 15th September 2003 Mr Divekar stated thus:
      “For the last fourteen months I am unemployed..”
In his Exam in Chief in answer to Q. 142 he stated that
    I have not been able to get employment in the shipping industry thereafter. Presently, since November 2004 I am working as Manager of a security company, namely, Top Securities in Pune at a monthly salary of Rs. 17,000.”
Divekar’s unemployment lasted from August 2002 (Gem of Madras) to October 2004 (Top Securities), a period of 26 months. 
      4.13    No person with a wife and children will remain unemployed of his own accord. It is cruel to suggest it. The circumstances point unerringly to the fact that the Respondents had blackened the name of the Claimant in the Shipping community and that his unemployment was in consequence of this. 
      4.14 Finally, the fact that the Respondents are perfectly willing to make false allegations against the Claimant is evidenced on the very record of the present arbitration itself. On the record of this Arbitration, the Respondents through their Advocates twice made a solemn accusation of theft of the ship's Official and Medical Log Books against the Claimant.  The Respondents claimed to have clear proof of this allegation and threatened to bring it before the learned Arbitrator in their evidence.  As submitted hereinabove, the said allegation was palpably false, and no witness dared to come forward and proffer the "proof" of which the Respondents boasted.

4.14      Respondent's Submissions on this Aspect

      4.14.1       Neither the 1st nor the 2nd Respondents had any animosity against the Claimant and would have re-employed him had he applied
      In the Respondent's original set of  Written Submissions (at paragraph (iv) on page 31) the Respondent relied on Mr Shavaksha's oral testimony (Q. 129 at page 22) to assert that the Respondents would themselves have given the Claimant employment with another vessel  had he applied, but alas they had no other principal than the 1st Respondent (implying of course that the 1st Respondent would not engage the Claimant).  'How could one who was so amiably disposed towards the Claimant have circulated such derogatory statements?' the Tribunal was rhetorically asked in the course of Counsel's oral submissions.
      Answer:  In the first place, the Claimant did apply for re-employment with the Respondents but was refused. This is absolutely uncontroverted. Please refer to paragraph 11 (pg. 7) of the Statement of Claim where the Claimant asserts in terms that after discharge he approached Respondent 2 to complete the remaining portion of his contract service, but the Respondent declined to take the Claimant in their vessel or any other sister vessel. This paragraph is dealt with in paragraph 20 of the Written Statement where not only is there no denial of this statement but the Respondents defend themselves by relying on the alleged "misbehaviors which the Claimant indulged in on board the vessel Ibn Abdoun".
      Secondly, given the animus that 1st Respondent had for the Claimant, it is inconceivable that it would have re-employed the Claimant. As for the 2nd Respondent, there is not a shred of evidence of any feeling of cordiality to the Claimant. On the contrary, the so-called cordiality did not prevent the 2nd Respondent in its several letters to the DG Shipping from making the most cruel allegations against the Claimant. If the 2nd Respondent truly believed everything it flung against the Claimant, it is inconceivable that it could possibly have foisted such an employee on another principal.
      Finally, it is easy to pretend amiability when it is only theoretical and cannot be put to the test. 
      4.14.2        The practice in the shipping Industry testified to by the Claimant's witnesses does not amount to Blacklisting since it is only advisory and not binding on the members
      This defence is advanced in Note C of its second set of written Submissions, Section 2 (page 4 to 6), the Respondent submitting that circulation of reports against a seaman is not a bar to a seaman being recruited.
      Answer:   This defence proceeds on a fundamental misunderstanding of the Claimant's case. The Claimant's case is that by disseminating the false accusations, the Respondents tarnished his name in the maritime industry. That is precisely how the wrong of defamation operates - by poisoning the mind of he who hears or reads it. It is and never was the Claimant's case that the Respondents' actions compelled others to refuse him employment. It is and was the Claimant's case that the Respondents' actions tarnished his professional reputation, thus causing others not to employ him. 
      4.14.3       The Claimant has not produced any letters from the Ship Agents Federation (FOSMA) such as were deposed to by the Claimant's two witnesses, pertaining to the Claimant himself.
      This defence is advanced in paragraphs 2(vi) (pg. 5) and 2(ix) (pg. 6) of Note C.
      Answer:         Each one of the letters that the Claimant's witnesses deposed to reporting misconduct against a seaman were bona fide reports, and were openly and officially circulated. Official cautionary letters are thus officially circulated through the Federation, and a Company will go through these official channels for their bona fide complaints. The Claimant has established that such official blacklisting exists in the Industry. But where a Shipping Company plans to falsely defame a seaman it is not going to do it through the official Federation channels. There are equally effective means of getting a libel across in a closed community which would leave no paper trail. So to say, as the Respondents do, that that the Claimant  has not discovered an official complaint made through FOSMA is to say what every wrongdoer says: You have not found the paper proof.   But a Court of Law is well-used to arguments such as these. 
      4.14.4            Even the letters addressed by the Respondents to the DG Shipping cannot be said to be in the nature of blacklisting, because the DG Shipping is not himself a recruiter or ship's agent.
      This defence is taken in sub-para 2(Xiv) at page 8 of Note C.
      Answer:      Once again, this is an unsustainable defence. The Claimant's cause of action in Defamation is founded on the Respondents' action in tarnishing the Claimant's reputation in the minds of the Authority as well as of employers in the industry.  The Respondents' letters were intended to poison the mind of the DG Shipping and to provoke him to action.  
      4.14.5          It is a cardinal principle of law that if  a person writes to an authority in response to an inquiry initiated by another person, then whatever he may say in answer, however malicious, false and injurious, can never be defamatory.
      This defence is taken in Note C paragraph 2(xv) (page 9) and in oral argument.
      Answer:       There is and cannot be any such principle of law. When challenged to cite a single authority or text in support of this bizarre proposition, learned Counsel asserted that it was too well known to require support, and declined to submit any authority but her own ipse dixit.  
      4.14.6           In the premises,  the Claimant therefore says and submits that the Respondents were indeed the source of the false allegations that blackened the Claimant's reputation.

V. DEFAMATION QUESTION 3:  Was the Claimant's lack of shipping employment a consequence of the said accusations, or was it voluntary

      5.1 It is the Respondent's case in its second set of Written Submissions (Note C) that the Claimant did not in fact suffer in consequence of the said accusations. If the Claimant got no employment in foreign ships after the year 2000 it was not because he had been blacklisted but because he himself did not wish to continue his sea career. The Respondents’ case was encapsulated in the following question No. 315 put by Respondent’s learned Counsel to the Claimant in Cross-examination:
          Q. 315: I Put it to you that you never tried for employment with any foreign companies after your employment with Ibn Abdoun ceased? (p. 61).  
      5.2 The most crucial piece of evidence in this regard is the Claimant's own sworn testimony. A summary of his evidence as to the course his employment took after the year 2000 is set out at paragraph 4.11 above. These employments are each recorded in his CDC Book (EX. C-2 , Comp. Pg. 12 to 48) and cannot and have not been questioned. That he was without employment altogether from August 2002 to October 2004 has not been challenged.  These facts corroborate the recital of events in his testimony. As submitted in paragraph  4.12 and 4.13 hereinabove, it against the very nature of things that a man who has been in substantive and productive employment, with a wife and family, would willingly take up unemployment for a period of 14 months, and thereafter take up a service at a fraction of what he was earning previously , i.e. Rs. 17,000 per month against his ship salary of Rs. 1,07,000 ($2,380).  
      5.3 The learned Arbitrator has had an opportunity in person to assess the credibility of the Claimant's testimony.  It was spread over 8 hearings, out of which 5 were spent in Cross-examination. The learned Arbitrator's assessment of the character of the testimony is invaluable and irreplaceable. It is respectfully submitted that the Claimant's oral testimony, the manner of his response to the Cross, his demeanour, all  inspired confidence.  
      5.4 The most crucial piece of fact that wholly militates against the Respondent's contention is the fact that after the year 2000 the Claimant did not give up sea employment. It is on record that in February  2001 he joined service with an Indian Shipping Co on the mv Kabirdas, and thereafter with breaks only worked with Indian companies till 8th August 2002. If the Respondent's contention were right, and the Claimant had decided to cease working at sea, why did he apply for service to Indian Shipping Companies at all? At paragraph 3(vi) (page 13) of Note C the Respondent has come forward with 4 alternative reasons for the Claimant having decided to leave sea employment for shore service, but not one is compatible with this one crucial fact: that for two years before sea employment ceased the Claimant sought and obtained sea service with Indian shipping Companies - obviously at lesser salary than what is available on foreign ships. 
      5.5 On the other hand, the Claimant's testimony is perfectly explanatory of the facts.  In the first instance, the Respondents saw to it that (as Mr Shavaksha had threatened) he would get no employment with foreign shipping companies. In the small world of shipping the accusations spread (as such poison inevitably will), and eventually poisoned his reputation in Indian shipping firms, blocking out all entry to these as well.  The gradual shutting off of his sources of employment is precisely what we would expect with the way in which defamation works, and is wholly inconsistent with the Respondents' suggestion that he voluntary decided to give up sea service.  
      5.6 The final piece of proof that the Claimant was always ready and willing, nay eager, to take sea employment is to be found in the Claimant's very Statement of Claim.  As late as 2003 when the Claimant amended his Statement of Claim he sought (in the Prayer Clause at page 13) in addition to the loss he had already suffered and as an alternative to future damages:
      "at least 15 guaranteed 7 months contracts in any of their vessels."

5.6       Respondent's Submissions on this Aspect

      5.6.1   The Claimant did not make any application to foreign shipping companies as is shown by the fact that he failed to produce copies of the application letters
      This defence is taken at paragraph 3(viii) at page 15 of Note C.  In the said passage the Respondents submit that in the absence of any record of applications being made, the presumption has to be that no application was made.
      Answer:      The fundamental error in this argument is that it assumes that the application is a document typed out and prepared for submission by an Applicant. The truth is that he Application is merely on a form given by  the Recruiting Agents. (Please see Mr Divekar's answer to Q. 317 at pg. 22). And the further crucial factual point is that the Company does not give an acknowledgement for it (Please see Mr Divekar's answer to Q. 306 at p. 19). Respondents' witness, Mr Shavaksha, had an opportunity to refute that statement if he chose. He chose not to.
      Without an acknowledgement, of what conceivable evidential value would a mere copy of an application form be?  Even a layman would be aware that copies of  unacknowledged forms would serve no probative purpose. (If anything, it would give ground to learned Counsel to comment on the 'deliberate maintenance of unacknowledged papers'). 
      5.6.2 The Claimant would have had his own reasons for not taking up sea employment that had nothing to do with the tarnishing of his name.
      This defence is propounded at paragraph 3(vi) at page 13 of Note C where 4 such possible reasons are advanced.
      Answer:       As stated earlier, these 'reasons' are wholly speculative and not one is consistent with the significant pattern that the Claimant's course of employment took, i.e. first of employment only with Indian Shipping Companies, and then no employment at all.  Furthermore, each of the reasons advanced is wholly unpersuasive.
      (Reason A)   Because the Claimant had not renewed his MUI membership he decided to give up sea employment.
      Answer:  There could be a number of reasons why the Claimant did not renew his MUI membership. MUI membership was required only by some shipping companies (please see Mr Divekar's answer to Q. 185 at pg. 1 of the Cross).  No questions were put to him as to why he did not renew his membership, or whether he took membership with another Union. In the circumstances, no inferences whatsoever can be drawn.
      (Reason B)     Because the Claimant may have been getting offers to work in films as may be seen from Mr Divekar's testimony at Q. 249 to 253.
      Answer:  Mr Divekar's Testimony in fact rules this out as a reason for giving up sea employment. His answers show that he tried for films only out of desperation in his unemployment. Furthermore, his answer to Q. 316 (at page 21) shows that he never even got paid.  (Arguments such as these show the lengths to which the Respondents have to go to provide some explanation, any explanation, for why a man would deliberately turn his back on his career)
      (Reason C)     Because after 22 years of life at sea the Claimant could have opted out. This is supported by the fact that till date the Claimant has not taken his examination for higher posts, as suggested by the Master of the Gem of Madras in his certificate to Mr Divekar (Comp. p. 170). 
      Not one question was put to Mr Divekar putting this allegation to him. Perhaps Respondent's learned Counsel was only too aware of the fact that the Master's examination requires full-time attendance of 6 months at the Nautical College and payment of substantial fees. What unemployed Officer without pay and a family to maintain could afford it, particularly when he sees that all avenues to ship employment have been closed to him?
      In any event, the suggested 'Reason' is totally incompatible with the prayer clause in the Claimant's Statement of Claim seeking employment at sea, as an alternative to future damages.
      (Reason D)     Because the Claimant was not feeling well and preferred to be within reach of his doctors.
      Once again not one question was put to Mr Divekar to put this allegation to him.  Learned Arbitrator and all parties have been seeing Mr Divekar now for the last over 6 years, and no trace of physical incapacity is traceable. Just because he was sick in the year 2000 cannot lead to the inference that he is sick and incapacitated thereafter.
      All these so-called 'reasons' are a sham. The true reason is available for all to see, and the arguments in its favour are strengthened, not weakened by such alternative explanations for the Claimant having to leave the one profession he had been trained for.
      Conclusion:  In the premises aforesaid the Claimant submits that the truth indeed is that he had sought for employment at sea, and progressively, first for foreign companies, then for Indian shipping companies, this source of employment was closed to him.

VI. DEFAMATION QUESTION 4:  What is the quantum of the Claimant's loss, if any, on this account

6.1       Quantification in Statement of Claim
      In its Statement of Claim (as amended in 2003) the Claimant estimated its claim for Blacklisting/tarnishing as follows: 
      (1)   Wage Differential between foreign ship wages and Indian ship wages:     Rs. 6,00,000
      (2)    Loss of earnings (at the rate of US $ 2,380 per month, equal to Rs. 1,09,480 per month) reckoned over 15 contracts of 7 months each:   Rs. 1,14,95,400. (Please note that $2,380 is the monthly wage he was earning on his last foreign employment, the mv Ibn Abdoun)
      (3) Mental suffering   Rs. 2,00,000
      Total : Rs. 1,22,95,000

6.2       Reduced Quantification in Claimant's Advocate's Letter of  23.1.2009
      On the footing that a Claimant at law is always entirely to reduce his claim (provided in doing so he does not alter the nature of the cause of action), the Claimant by Advocate's letter dated 23rd January 2009 (reproduced at page 26 of the new Compilation of Claimant's Documents and Citations) reframed the damages calculation so as better to bring out the real dispute between the parties and take account of subsequent events. In the course of this, the Claimant's claim in Defamation stood reduced to (Rs. 6,00,000 + Rs. 1,10,94,600 + Rs. 2,00,000) Rs. 1,18,94,600.  The breakup was as follows:
      (1)        Wage Differential between foreign ship wages and Indian ship wages between 8th February 2001 and 5th August 2002:      Rs. 6,00,000
      (2)      Complete loss of earnings between 6th August 2002 and 31st October 2004 (26 months) when the Claimant had no employment at all (at $ 2,380 per month  = Rs. 1,07,100 per month) : Rs. 27,84,600
      (3) Wage Differential between Claimant's earnings with Respondent (foreign Owner) and his earnings from shore employment (taken over 13 years) (Rs. 99,62,680 minus Rs. 26,52,000) commencing 1st November 2004 :  Rs. 73,10,680
      (4) Mental suffering  :  Rs. 2,00,000.
      Total:   Rs. 1,18,94,600. 
6.3        Elucidation of the aforesaid Reduced Calculation 
      (1)       Wage Differential between foreign ship wages and Indian ship wages between 8th February 2001 and 5th August 2002:  This is the period during which the Claimant was getting employment on Indian ships, and it relates to the difference between what the Claimant would have earned had the Claimant continued to be employed on foreign ships (as heretofore) and the earning from Indian ships. 
      (2) Complete loss of earnings between 6th August 2002 and 31st October 2004 (26 months) when the Claimant had no employment at all (at $ 2,380 per month  = Rs. 1,07,100 per month)  
      This is based on the fact that the Claimant’s last sea service ended on the 5th August 2002 when his tenure with the vessel mv Gem of Madras ended. Thereafter, in paragraph 11 of his Affidavit-in-Chief dated 15th September 2003 he testified:
      “For the last fourteen months I am unemployed..”
And in his Exam in Chief in answer to Q. 142 he stated that
    I have not been able to get employment in the shipping industry thereafter. Presently, since November 2004 I am working as Manager of a security company, namely, Top Securities in Pune at a monthly salary of Rs. 17,000.”
Thus for the purpose of the calculation the period of unemployment is to be taken as 1st September 2002 to 31st October 2004, i.e. 26 months. 
      (3)  Wage Differential between Claimant's earnings with Respondent (foreign Owner) and his earnings from shore employment (taken over 13 years) (Rs. 99,62,680 minus Rs. 26,52,000) commencing 1st November 2004
      At the time of the hearing on 4th February 2005 the Claimant stated in the course of his answer to Q. 142 of his Exam-in-chief :
      “Presently I am working as Manager of a security company namely, “Tops Securities” in Pune at a monthly salary of Rs. 17,000.”
Therefore, in calculating the loss of earnings by reason of the Claimant having to take shore employment instead of marine employment, the loss of marine earnings over a period of 13 years is calculated at the rate of $ 2,380 per month (that admittedly being his last foreign ship wage on the mv ‘Ibn Abdoun’) for 7 months every year. This comes to Rs. 99,62,680 (converting the US Dollar at the rate of Rs. 46 to the Dollar). On the other hand, the sum that the Claimant will earn over the said period of 13 years on the basis of 12 months every year comes to Rs. 26,52,000. In calculating the loss of earnings the potential foreign ship earnings stand to be reduced by the shore earnings.  Therefore, the difference between what he would have earned and what he did earn comes to Rs. 73,10,680, and represents the loss of earnings over the said period of 13 years.
     Three issues may arise. (a)  Is 13 years too long? The Claimant was born on 4th February 1956 (as noted in the official Continuous Certificate of Discharge at Comp. p. 9). By November 2004 – when the calculation commences – he was thus 48 years old. While there is no age limit for seaman, a period of 13 years further service life was taken on a conservative basis.
     (b) Why is no adjustment made for possible changes in salary either for marine service and land service? Again, while it is true that foreign marine salaries can increase much faster than land service, a conservative approach was taken and it was assumed that both would increase in roughly the same amount, in which case the changes (this being a subtraction of one from the other) would roughly cancel out.
     (c) Should the estimate of loss of earnings be modified to take account of uncertainties, the main one being death?  In theory, some deduction may be made from the estimation to take account of this, particularly when the person claiming is already advanced in age. In the present case, we are already in the year 2010 and the Claimant (presently at age 54) is yet alive and hearty. A deduction to take account of his surviving to age 61 does not appear reasonably to be called for.  
     (D) Mental suffering  :  If the learned Tribunal take the view that the Claimant’s claim for the tarnishing of his reputation arises out of contract (as has been submitted in paragraphs 2.6.2 to 2.6.4 hereinabove), and the claim in tort is not adjudicable in Arbitration, then this head of claim would probably not be allowable, inasmuch as it does not fall within the rubric of damages for breach of contract. If on the other hand, the learned Tribunal take the view that the Claimant’s claim for damage to his professional reputation lies both in contract and tort, then this head of claim is maintainable – the scope of compensation in tort being wider than in contract. That Rs. 2,00,000 is not excessive for the distress that the Respondents’ actions caused him cannot, it is respectfully submitted, be reasonably contested. 
6.4       General Legal Submissions
     6.4.1 Once it has been shown that as a result of the Respondents’ actions the Claimant lost all opportunity for employment as seaman, then the function of the Law (both of Contract and Tort) is to place him in the same position as if the Respondent’s action had not occurred. Since the loss caused to the Claimant necessarily accrues and is suffered over time, one is inevitably required to make an estimate or judgement as to the loss of earnings he has and will suffer. That has been the purpose of the exercise described above. 
     6.4.2 The citation of the passage from Clerk & Lindsell on Torts (reproduced at page 136 to 138 of the Claimant’s latest  Compilation of Documents and Citations) bears this out.  The case of Harrison v. Pearce has been there referred to. A copy of the said judgement  in Harrison v Pearce (1858) 1 F. & F. 567 (=175 E. R. 855) is also contained in the same Compilation (at page 139-140).  The method of calculation adopted by the Claimant is, it will be seen, entirely supported by authority. 
     6.4.3 Reference has also been made by the Claimant to the passage in McGregor on Damages (at pages 129 to 135 of Claimant’s said latest Compilation).  It is the Claimant’s respectful submission that the Respondents’ whole conduct, and particularly its conduct in the course of the present arbitration, first in making and then in persisting in its malicious falsehoods against the Claimant, and then (through its legal representatives) making yet a further false allegation against the Claimant that it had stolen the log books, all these lead inevitably to the conclusion that the Respondents were actuated by malice. Once it be held that the learned Tribunal has jurisdiction to entertain and try the present matter, then there can be no doubt that it possesses the power to award compensatory damages for the humiliation and distress caused to the Claimant even in the course of the proceedings. No terms of reference can constrain that power. Even otherwise, and even if the Respondents’ malice and conduct not be the subject of a separate award of compensation, nevertheless that conduct must strengthen the hand of the learned Tribunal in awarding compensation on the main claim for damages for the defamation. 
6.5       No challenge to the Claimant’s computation
     Neither in the Respondents’ original Written Statement nor in the Additional Written Statement has any issue been taken to the actual method or particulars of the calculation.  The same is true for both the original and second set of Written Submissions submitted by the Respondents in the course of the oral arguments.  The calculations have thus remained uncontested. Furthermore, the fact that the Respondents, both of whom are fully cognisant of the shipping trade, have found nothing objectionable or inappropriate in the method of calculation and the particulars of damage submitted by the Claimant is, quite apart from the law of pleadings, a compelling pointer to their correctness. 

VII. DEFAMATION QUESTION 5:  In any event, was the Claim for Defamation a mere afterthought and thus unworthy of credence

     7.1 In paragraph 1(v) read with 1(vi) and 1(vii) of Note C in the Respondents’ Further written Submissions, the defence is taken that the claim for blacklisting was only introduced by way of amendment to the Statement of Claim in November 2003 and had not been included in the original Statement of Claim. It is urged that what was in the original Statement of Claim was only a claim for failure to get employment on foreign ships and not blacklisting/tarnishing of image. Further, the claim for Blacklisting/tarnishing was not even a part of the Section 11 application to Court or a part of the order of reference to Arbitration. 
     7.2 To dispose of this argument it would be useful to set out a short chronology:
     (i)       17th Sep 2000: Claimant disembarked from the Al Abdoun and returned to India on the 22nd Sep. 2000.
     (ii)       3rd Nov 2000 : Claimant certified as fit to resume duties. 
            (iii)      8th February 2001 : after many attempts to get employment with foreign shipping companies, Claimant joins mv Kabirdas
     (iv)      18th April 2001:  Claimant joined mv Radiant Sun
     (v)   25th June 2001:   Claimant files Section 11 Application in High Court
     (vi)   14th December 2001 :  Order of reference made by Patankar J.
     (vii)       17th December 2001 :  Claimant joined service with m.v Jag Rahul
     (viii)      4th February 2002 :  Claimant joins service with mv Gem of Madras
     (ix)    July 2002 :  Claimant’s Original Statement of Claim filed
     (x)      5th Aug 2002:   Claimant’s service with mv Gem of Madras ends. Is unable to obtain any other shipping employment
     (xi)          27th September 2003 :Claimant files Amendment Application to Tribunal
           (xii)     1st November 2004 :  Claimant takes employment with Tops Securities
     (xiii)     23rd January 2009 :  Claimant’s Advocate’s letter to the Tribunal reducing and reorganizing the claim to bring out the real controversy between the parties. 
     7.3 With this chronology in view the Claimant’s claims for Defamation will be readily understood:
     (i) On 25th June 2001 when the Claimant filed the Section 11 Application, he had found that employment with foreign ships was closed to him, but he had managed to secure employment with 2 Indian ships. Thus in paragraph 14 (b) of the said Application (at page 316 of Comp. Vol II) the Claimant described the Defamation dispute as being for compensation for the giving of misleading and false and fabricated information to the DG Shipping and to other ship owners thereby closing employment in foreign shipping companies. He claimed “estimated loss” for the difference between foreign and Indian ship earnings over 15 years, amounting to Rs. 54,00,000 (this figure is erroneously typed as $ 45,00,000 in paragraph 14(b) but is corrected in paragraph 15). The High Court’s reference was in these terms, i.e. for Rs. 54,00,000 (please see page 2 of the Claimant’s second Compilation of Documents and Citations where the order is reproduced).
     (ii) In July 2002 when the Claimant filed his original Statement of Claim before the learned Tribunal he was still employed with an Indian ship. Thus the original Statement of Claim continues the same formulation as in the Section 11 Application, with only a small alteration.  By this time the Claimant had actually served two domestic contracts, so that the actual difference in earnings on these contracts was no longer in the realm of forecasting; it had actually happened. The Claimant thus sub-divided his Defamation claim into 2 sections, one for damages already accrued and one for future damages. The damages already accrued were the wage difference of 2 contracts of 6 months each at the rate of Rs. 50,000 per month; and the future damages were estimated at Rs. 56 lakhs (@ Rs. 50,000 per month wage difference over 15 years. Thus the total blacklisting claim rose to Rs. 62 lakhs. In paragraph  9 of the original Statement of Claim the Claimant described his Defamation claim as founded on “the Respondents doing everything in their capacity to blacklist the Claimant which resulted in denial of contract of employment to the Claimant in any foreign vessel”. In the Statement  of particulars in the original Statement of Claim the Claimant described his Defamation claim as “Damage/loss for blacklisting and Tarnishing the entire career of the Claimant at the peak time of his career”.
     (iii) On 27th September 2003 when the Claimant filed his Amendment Application before the Learned Tribunal subsequent events had come into play. By August 2002 all avenues even to Indian ships had closed off and he had been unemployed for over 13 months. It was in order to take account of this subsequent event that the Claimant applied for amendment to alter the future damages portion of the claim which as framed was no longer appropriate to the facts.  The future loss was now no longer the wage differential between foreign and Indian ship earnings but, (given the fact that the Claimant was now earning nothing at all, not even Indian ship wages) the entire wage earnings that he would have made over the next 15 years. This explains the difference between the estimate of future earnings loss, i.e. Rs. 56,00,000 as against Rs. 1,14,95,400. In this Amendment Application, the Claimant further described his future earnings loss as “Damages/loss for blacklisting and tarnishing the entire career of the Claimant.”
     (iv) On 23rd January 2009 when the Claimant addressed his Advocate’s letter to the learned Tribunal a further subsequent event had occurred. As from 1st November 2004 the Claimant had at last managed to secure domestic shore employment. It thus became necessary to take account of this event. To do so the Claimant segregated his claim for loss of future earnings into 2 segments: the first for the period of total unemployment  from Sep 2002 to 31st October 2004 and the second for the period thereafter when he was earning on shore. As a consequence of this reorganization (necessitated by subsequent events) the Amended Statement of Claim of Rs 1,14,95,400 came to be segregated into two figures of Rs. 27,84,600 (complete loss of earnings for 26 months) and Rs. 73,10,860 (for the subsequent wage difference), the total of these being Rs. 1,00,95,280 which was substantially less than what had earlier been claimed.  
     7.4 Two things become clear from this detailed analysis:
     First, every change in the Claimant’s Defamation claim was wholly rational and was the consequent of subsequent events that had of necessity to be taken into account. Not to have taken account of these subsequent events in the calculation of the damages would have been to do injustice to both Claimant and, in the last case, to the Respondents.
     Second, at every stage there could be no doubt that the Claimant’s cause of action remained one and the same, namely, that the Respondent’s false accusations to the DG Shipping as well as to the other shipowners had ruined his reputation. This can be readily ascertained from the italicized quotations extracted in sub-paragraphs (i) to (iv) above. This one clear thread runs through each of the Claimant’s pleadings. The Respondents’ submission that the Claimant’s claims are contradictory and an afterthought is a patent misrepresentation. So too is the Table, Note D, which is part of the Respondent’s Additional Written Submissions.
     In the circumstances, it is submitted that the Claimant’s calculation of its Defamation damages is just, rational and supported by legal authority. 

VIII.  DEFAMATION QUESTION 6 : Is the Defamation Claim or any part of it outside the Tribunal’s Jurisdiction

     8.1 In the course of Oral Submissions, the Respondents appear to raise 3 separate challenges to the Jurisdiction of this learned Tribunal to adjudicate upon the Defamation Claim, in whole or in part. These are :
     (i) Whether the Defamation Claim, being a claim in Tort, falls within the scope of the Arbitration Clause
     (ii) Whether that part of the Defamation Claim that exceeds the Claim as referred by the Hon’ble High Court falls within the Tribunal’s Jurisdiction
     (iii) Whether the Tribunal has even the power to adjudicate upon the aforesaid challenges to jurisdiction, or whether these challenges can only be adjudicated by the High Court.
     These will be dealt with seriatim. 
8.2 Whether the Defamation Claim falls within the scope of the Arbitration Clause 
     8.2.1 This defence has been taken in paragraph 1 of the original Written Statement. Curiously enough, it does not appear to figure in the Written Submissions. It was, however, made in Respondent’s Oral Argument. 
     8.2.2 To resolve the issue one must first have regard to the Arbitration Clause in the Employment Contract ( the Contract starts at Comp. pg. 136) (at pg 140)
         “20.  Any problem arising from this contract that cannot be solved between the Owners, Master, Officers and Crew Managers shall be referred to a mutually appointed Arbitrator under Mumbai jurisdiction.”
The question thus resolves itself into whether the dispute in respect of the accusations made by the Respondent against the Claimant can be said to fall within the ambit of the words “arising from this contract.” There is no doubt that the words “arising from this contract” are of the widest amplitude. 
     8.2.3 And the Claimant’s first response to the Respondent’s challenge to the Tribunal’s jurisdiction over the Defamation Claim is that the said Claim is not merely a claim in Tort but also a Contractual claim, and as such falls unquestionably within the Arbitration Clause. The Defamation claim was from the start pleaded as a dispute arising ex contractu and for the reasons set out in paragraphs 2.6.2 to 2.6.4 hereinabove, it is in fact so, because the duty not to malign the reputation of a seaman engaged under the Contract of Employment is an implied term of that contract. Any conduct on the part of the shipowner that violates that duty is therefore necessarily a breach of contract. As such, the Defamation claim falls undeniably within the Arbitration Clause. 
     8.2.4 Of course, a claim for Defamation is also a claim in Tort. In the case of Renusagar Power Co. v. General Electric Co. & Anr (AIR 1985 SC 1156) (reproduced at page 31-66 of the Claimant’s latest Compilation of Documents and Citations) the Supreme Court laid down the test as to when even a claim in Tort can be said to fall within an Arbitration Clause. At the end of paragraph 39 (at page 52 of the Compilation) the Court held thus:
         “As we shall point out presently, this Court in one of its decisions has laid down the test for determining the question in such cases and the test is whether recourse to the contract, by which both the parties are bound, would be necessary for the purpose of  determining whether the claim in question was justified or otherwise”
In paragraph 40, the Court referred to the following passage from Russel on Arbitration which fortified its conclusion:
      “Claims in tort may be so intimately connected with a contract that a clause of appropriate width designed primarily to make contractual disputes arbitrable will nevertheless render such claims in tort arbitrable as well.”
In paragraph 44 the Court referred with approval to the judgement of the Calcutta High Court in Alliance Jute Mills v. Lal Chand Dharanchand (AIR 1978 Cal 19) wherein the High Court held that a claim for libel instituted by a buyer of goods against the seller for wrongfully publicizing that the buyer had defaulted in making him payments, was a claim falling under the Arbitration Clause in the Sale Agreement. This was because :
      “in going into the question of the tort the Court would necessarily have to go into the terms and conditions of the Contract relating to payment and that the claim in tort  was directly and inextricably connected with the terms and conditions of the Contract.”
In paragraph 45 the Supreme Court referred to its judgement in Union of India v. Salween Timber Construction (AIR 1969 SC 488) where the test was enunciated thus:
      “whether recourse to the contract by which both the parties are bound, was necessary for the purpose of determining whether the claim of the Respondent was justified or otherwise”  
     8.2.5       This being the test, one is led to see whether the defamatory statements that form the whole basis of the Claimant’s cause of action were directly and inextricably related to the terms of the Claimant’s Service Contract.  For this purpose, the provisions of Clause 2 of the Service Contract (at Comp. pg. 136) may be referred to. It sets out what actions on the part of the seaman shall constitute misdemeanor so grave as to warrant cancellation of the Contract. The contractual “acts of misdemeanor” include:
     (i) desertion
     (iv) incompetence to perform duties
     (v) insubordination or wilful disobedience or refusal to perform assigned duties
     (vi) drunkenness
     (vii) quarrelling or fighting on board
     (ix) breach of discipline
     (x) negligence in performance of his duties.
It will readily be seen that each and every one of the accusations levied against the Claimant are immediately relatable to these contractual prohibitions under Clause 2. The accusations derived their force from the fact that each of them was an act of grave misconduct under the Claimant’s Contract of Service.   Furthermore, it was precisely from the fact that they were acts of serious service misconduct that they derived their power to injure the Claimant’s reputation among other shipowners and crew recruiters. Mere allegation against the Claimant’s personal life - e.g. bigamy, adultery or the like - would not have had the effect on other shipowners and recruiters that these accusations had, and that was because these acts each constituted heinous breaches of the Claimant’s service obligations to his employer. In other words, each of the acts of which the Claimant was wrongfully accused of were acts of contractual misdemeanor, and were thus “directly and inextricably connected with the terms and conditions of the Contract” and must have been so perceived by those to whom they were conveyed. 
     8.2.6 In oral Submissions Respondent’s Counsel sought to distinguish Renusagar on the ground that in that case the tort claim was only one of a number of claims and was tied up with the other items of claim. However, the test that was enunciated in Renusagar (or in the judgment in Salween Timber on which it relies) does not base itself on this. The test calls for the claim to be tied up with the terms of the contract, and that is the test that is applied hereinabove. On the test so enunciated, the claim for Defamation, even apart from being a claim in contract, was equally – as a claim in Tort – adjudicatable by this learned Tribunal. 
     8.26 It goes without saying that it was only the 1st Respondent (along with the Claimant) who was party to the Contract and the Arbitration Clause, and it is therefore the 1st Respondent alone against whom an Award, if any, can be made. The impleading of the 2nd Respondent (which was not objected to) has, however, aided considerably in the elucidation of the facts and law in the proceedings before the Tribunal.
8.3 Whether that part of the Defamation Claim that exceeds the quantum of Claim referred by the Hon’ble High Court falls within the Tribunal’s Jurisdiction 
     8.3.1 The critical defence to this objection is that this jurisdictional objection was not taken at any time in the pleadings of the Respondent, either in the original or the amended Written Statement.  This is critical because under the provisions of Section 16 of the Arbitration and Conciliation Act, if the objection is not taken as soon as the matter alleged to be outside the scope is raised in the Arbitration proceedings, it cannot be taken unless the Tribunal considers the delay justified. The Respondent has at no time submitted justification for the delay or sought consideration from the Tribunal. It follows that the objection is barred.  
     8.3.2 In the course of Oral Submissions, Respondent’s learned Counsel submitted that the defence had in fact been taken in paragraph 1 of the Respondent’s Additional Written Statement. This argument is, with respect, erroneous. That paragraph does no more than repeat and reiterate the contentions taken in the original Written Statement, which hardly improves the Respondent’s position. 
     8.3.3 Without prejudice to this basic objection, the Claimant further submits that even otherwise, the increments made to the original Defamation claim do not fall outside the scope of the Arbitration reference.  Where, as in the present case, a claim is for unliquidated damages and the damages are specifically described as ‘estimated’, the rule that the claim before the Arbitrator cannot go beyond the scope of the reference only means that the nature of the claim (the essential cause of action) cannot be altered. It does not mean that where by reason of subsequent events the quantum of the unliquidated damages must suffer alteration, the claim quantum must nevertheless stand fixed in eternity.  Justice is not a foreigner to Arbitration. In fact, the very provisions of section 23(3)  of  the Arbitration and Conciliation Act, in providing for amendment and even supplementing of the Claimant’s claim, confirm this fact.
     8.3.4 As pointed out at paragraph 7.3 hereinabove, at none of the further stages of the claim (from the Section 11 application, to the original Statement of Claim, to the Amendment thereof, and to the re-organising letter of 2009) was there any deviation whatever from the nature of the claim as it had first been enunciated in the Section 11 Application.  Moreover, the Claimant very clearly stated in paragraph 14(b) of his Section 11 Application that the loss he was claiming was “estimated.” In other words, the quantification provided in the said Application was a mere appraisal only and not final. The Claimant submits that the very nature of the cause of action in Defamation requires that when subsequent events bring about changes in the damages that have been suffered, those changes have to be given effect to.  Far from the changes in the claim figures constituting changes in the nature of the claim, they affirm the continuing vitality of the claim as it responds appropriately to the changes as they occur.  
     8.3.5 This submission is fully supported by the judgement of the Supreme Court in the case of  McDermott International v. Burn Standard & Ors 2006 (2) Arb L. R. 498 (SC) (reproduced at page 79 to 128 of the Claimant’s Compilation of Documents and Citations). At para 104 (pg. 111 of the Compilation) the Supreme Court first noted the nature of the claim in dispute. It said:
         “104.  A claim for overhead costs resulting in decrease in profit or additional management costs is a claim for damages.”
Then, founded on this, the Court went to hold:
         “106.   It is furthermore not in dispute that the claim for damages had been made prior to invocation of arbitration. Once such a claim was made prior to invocation it became a dispute within the meaning of the provisions of the 1996 Act. It is not disputed that the same claim was specifically referred to arbitration by MII in terms of its notice dated 10th April 1989.
         107.       While claiming damages the amount therefor was not required to be quantified. Quantification of a claim is merely a matter of proof.” 
     8.3.6    The Claimant's submission is also supported by the judgement of the Supreme Court in V. H. Patel v. Herubhai (2004) 4 SCC 368 (reproduced at page 67-78 of the Claimant's Compilation of Documents and Citations), wherein the Court at paragraph 9 stated as follows:
           "Though the disputes between the parties originated on the basis whether one or the other partner had not retired from the partnership or as to the rights arising in relation to trademarks or otherwise, still where there is no mutual trust between the parties and the relationship became so strained that it is impossible to carry on the business as partners, it was certainly open to them to claim dissolution and such a question could be adjudicated. The scope of reference cannot be understood on the actual wording used in the course of the order made by this court or the memorandum concerned filed before this Court, but it should be looked from the angle as to what was the spirit behind the reference to the arbitration...." 
     8.3.7    In the case of a claim particularly for unliquidated damages, the quantum of damages is not of the essence or the spirit of the claim. At the stage of the Section 11 reference, the damages are necessarily only estimated. Their final ascertainment is only a matter of quantification. Merely because at the stage of the reference the estimated damages are set out , that does need freeze the quantum for all time. “Quantification of damages is merely a matter of proof.” 
     8.3.8 The Respondent in answer has cited the judgement of the Supreme  Court in the case of State of Orissa v. Asis Mohanty (1999) 9 Supreme Court Cases 249. A mere reference to the said judgement will show that what was in dispute in that case was not as to whether the Claimant could enhance the claims over and above those that had been referred to arbitration (the Court found that the original reference to arbitration was unconfined), but whether having filed its Statement of Claim restricted only to some claims, it would thereafter seek to file further claims. The Supreme Court help that such further claims could be filed if they pertain to disputes which were in existence at the time when the arbitration clause was invoked and the reference made. It may be noted that in the present case the Claimant is not seeking to raise any further disputes – the cause of action of its claim in Defamation is unchanged. 
     8.3.9    The Respondent also sought to place reliance upon the judgement of the Supreme Court in State of Andhra Pradesh v. I. Chandrasekara Reddy AIR 1998 SC 3311 (reproduced at the end of the Claimant's Compilation of Documents and Citations). Far from supporting the Respondent's case, the said judgement wholly endorses the Claimant's submissions herein. This was a case in which it was sought to be argued that "the claim put forward before the arbitrator by the contractor was in excess of the original claim before the arbitrator and therefore could not be adjudicated upon." (Internal page 3315). The Supreme Court held that the Respondent had not raised any objection before the Arbitrator and, in fact, had taken issue only on the merits. The Court held: "Having chosen to join the issue on merits of the claim, the award of the arbitrator had to be treated as binding on the State authorities." (Page 3315). This finding is equally applicable to the present case. 
     8.3.10      The Supreme Court, however, went on to make a further finding which is also highly relevant to the present issue. The Court stated thus:
         “The matter would have stood differently if the (earlier claim) letters had confined the total claim of the Respondent No. 1 to the amounts mentioned therein. Then a further question would have survived for consideration as to whether there was any further material available to enhance the said claim before the arbitrator, but such was not the situation on the facts of the present case……  In this connection, learned senior Counsel for the Respondent rightly invited our attention to a decision of learned single Judge of Orissa High Court in the case of State  of Orissa v Civien Construction Co AIR 1983 Orissa 48, wherein Hon’ble R. N. Mishra J (as he then was) in a similar situation held that as per the terms of the notice when the amount of claim was subject to further variations, if found necessary, additional claim could be submitted by the claimant before the Arbitrator. Once this conclusion is reached the result become obvious.”
The Court upheld the adjudication of the further claims. 
     8.3.11      Thus, even if the earlier notice for reference “confined the total claim of the Respondent to the amount mentioned therein” the Court can still go into the further question and ascertain whether there was any further material before the Arbitrator to enhance the claim. If it is found that the claim “is subject to further variations” an additional claim could be adjudicated by the Arbitrator.  
     8.3.12    These judgements all point to one conclusion. Whether a claim once quantified  at the stage of the reference can be enhanced will depend on the nature of the claim, and whether it  is from its very nature subject to variations.
    • Here we have a claim for unliquidated damages, where quantification is not a matter going to its substance but is a matter of proof.
    • When the Claim was first quantified in the Section 11 application, the quantification was expressly stated to be on estimate basis.
    • A claim for loss of future earnings is inherently subject to variation, as subsequent events occur which affect the Claimant and his prospects.

     8.3.13    In these circumstances, and in any view of the matter, the changes in the quantification of the Claimant’s claim for damages for Defamation are adjudicatable by the learned Tribunal.

      8.4 Whether the Tribunal has even the power to adjudicate upon the aforesaid challenges to jurisdiction, or whether these challenges can only be adjudicated by the High Court. 
     8.4.1 The Respondent has sought to rely on the judgement of the Supreme Court in the case of S. B. P. & Co. v. Patel Engineering (2005) 128 Com Cas 466 to submit that the learned Tribunal is not even empowered to hear the jurisdictional objections raised by it before the Tribunal, the sole authority empowered to hear it being the High Court. 
     8.4.2 This objection is open to the answer that the Supreme Court itself laid down that its ratio will not apply to pending arbitrations: please see paragraph 48 (x):
         "Since all were guided by the decision of this court in Konkan Railway Corp Ltd v. Rani Construction P Ltd (2000) 8 SCC 159 and orders under section 11 (6) of the Act have been made based on the position adopted in that decision, we clarify that appointments of arbitrators or  arbitral tribunals thus far made, are to be treated as valid, all objections being left to be decided under section 16 of the Act. As and from this date, the position as adopted in this judgement will govern even pending applications under section 11 (6) of the Act.
In the present case, the order of Patankar J under section 11 of the Act is dated 14th December 2001. The judgement of the Supreme Court in the S. B. P. Case was delivered in the year 2005. Clearly, therefore, by reason of the passage quoted above, the prior law will continue to apply, and so far as objections to the jurisdiction of the Tribunal are concerned, “ all objections being left to be decided under section 16 of the Act."  
     8.4.3   The Respondent submits however that the last sentence of the quotation will operate to remove from be Tribunal the power to adjudicate upon the said issues. The Respondent submits that as from the year 2005 all "pending applications" are to be decided in accordance with the law laid down in the S. B. P. Case, this would include even a Section 16 application before an Arbitration Tribunal. Since the Tribunal is hearing the objection today, long after the S.B.P. judgement, it is bound to follow it. This argument, with respect, is an entirely unacceptable reading of the judgement. The "pending applications" that are referred to in the last sentence of the said quotation are applications under section 11 of the Act for appointment of Arbitrators, not applications to the Tribunal under Section 16. Any other reading would give rise to intractable problems, and would contradict what was said by the Supreme Court in the sentence just previous to it. For instance, as in the present case, once a matter has been referred to the Tribunal, how are jurisdictional objections to be brought before the High Court when the matter is still pending before the Tribunal? The Act makes no provision for any such  resort to the High Court in a pending Arbitration. In fact, when in the present case the learned Arbitrator put this question to learned Counsel of the Respondent, the response was that it was Counsel's duty only to set forth the law and not to resolve problems. 
     8.4.4 Furthermore, the reason why the jurisdictional issues in the present case do fall for decision before the Tribunal under section 16 is to be found in the ratio of the Supreme Court's judgement itself. In paragraph 22 of the said Judgement the Court recognised the fact that an arbitral tribunal does have the competence to rule on its own jurisdiction, and that this will happen when the parties have gone to the arbitral tribunal without recourse to section 8 or 11 of the Act. The reason why the jurisdictional issues cannot be decided by the tribunal under section 16 once the law declared in the S. B. P. Case comes into effect is set out in the following words:
         "But where the jurisdictional issues are decided under these sections before a reference is made, Section 16 cannot be held to empower the arbitral tribunal to ignore the decision given by the judicial authority or the Chief Justice before the reference to it was made. The competence to decide does not enable the arbitral tribunal to get over the finality conferred on an order passed prior to its entering upon the reference by the very statute that creates it.... Once it is held that there is an adjudicatory function entrusted to the Chief Justice by the Act, obviously, the right of the arbitral tribunal to go behind the order passed by the Chief Justice would take another hue and would be controlled by section 11 (7) of the Act.” 
     8.4.5   In other words, though the power under section 16 remains, it cannot be exercised by the Tribunal because of the fact that the jurisdictional issues have already been decided by the Court. In the present case, the jurisdictional issues have not been decided by the Court and, as specifically directed in paragraph 3 of the Order of Patankar J, they
     "can be gone into by the Arbitrator and it is not necessary to decide the same in this Petition."
Applying the ratio in the S. B. P. Judgement (in paragraph 22, as quoted above) and applying the specific direction of the Supreme Court in paragraph 48(x), the jurisdictional issues that fall for determination can be properly decided by this Tribunal under Section 16. There is no prior determination of the Court which alone can deprive it of this power. The objection raised by the Respondent is devoid of merit.


     9.1 A view may be taken that since what is being sought is compensation for future loss of wages, any award that grants that compensation should provide for interest to be calculated on each yearly segment only from the time that year is over. (For instance, if loss of earnings for the year 2005 be granted, then interest on that amount should be payable only from the end of the year 2005).  While such a view may have some theoretical rationale, its application would unduly complicate the calculation of compensation. To deal with any objection on this ground, the Claimant would respectfully submit that the adjustment, if it be made, be done by reducing the overall rate of interest. While the Statement of Claim seeks interest at the rate of 18% per annum, the Tribunal may see fit to lessen the grant of interest to take account of this point. 
     9.2 Costs:  The Claimant has submitted the statement of the costs he has incurred, and prays that these be allowed.


10.1   This is a case in which a man has suffered because he has offended those who wield power and influence in the maritime world in which he lived and earned his living. It is highly probable that the action that was taken against him was intended as an object lesson.  And indeed, the steps taken to destroy his professional reputation were completely successful. 
10.2      Today the Claimant’s only remedy lies in the Tribunal’s hands. If the remedy is deserved, as it is submitted it truly is, then let it be rendered in the fullness that it deserves. There was no moderation or leniency in the Respondent’s acts; likewise there need be no leniency in the Tribunal in compensating and alleviating the loss and suffering that the Claimant has had to endure,

1 comment:

  1. This case will hopefully set a precedent. Glad to see that companies will finally realize that their muscling and blackmailing techniques will not work anymore. Due credit for sticking to the fight though all these years.