R. C. Lahoti, J. - (1.) The appellant, the Atlas Export Industries, Junagadh (hereinafter 'Atlas', for short) entered into a contract dated 3rd June, 1980 with M/s. Oceandale Company Limited, Hongkong (hereinafter 'Oceandale', for short). The agreement was for the supply of 200 MT of Indian groundnut extractions of the specifications as to quantity, quality and packages detailed in the contract and to be shipped on or before 30th June, 1980. The price was agreed at US $ 200 per M.T. The goods were to be supplied through M/s. Kotak and Company, Bombay (hereinafter 'Kotak', for short). M/s. Prashant Agencies, Bombay were the brokers. The existence of the contract, to which Atlas, Oceandale and Kotak were the parties, is not in dispute. Kotak were at all times responsible for the performance on behalf of the final buyers Oceandale. The letter of credit was opened by Oceandale in favour of Kotak who then transferred it in favour of Atlas. The letter of credit was opened at US $ 203 whereas Kotak's purchase from Atlas was at US $ 200. It was agreed upon between Atlas and Kotak that the difference would be paid locally by Atlas to Kotak in Indian rupees. The time for shipment was extended by mutual agreement between the parties and correspondingly the period of validity of the letter of credit was also extended. However, still there was failure to ship the goods by the time appointed by the contract and as extended which resulted into a dispute arising between the parties.
(2.) The contract dated 3rd June, 1980 incorporated an arbitration clause which is extracted and reproduced hereunder:- "This contract is made under the terms and conditions effective at date of the Grain and Food Trade Association Ltd., London Contract No. 15 which is hereby made a part of this contract...... both buyers and sellers hereby acknowledge familiarity with the text of the GAFTA contract and agree to be bound by its terms and conditions."
(3.) 'GAFTA' stands for the Grain and Food Trade Association Ltd., London, Clause 27 of the Standard Contract 15 of the GAFTA provides as under:- "27. Arbitration - (a) Any dispute arising out of or under this contract shall be settled by arbitration in London in accordance with the Arbitration Rules of the Grain and Food Trade Association Limited, No. 125 such Rules forming part of this contract and of which both parties hereto shall be deemed to be cognisant. (b) Neither party hereto, nor any persons; claiming under either of them, shall bring any such dispute until such dispute shall first have been heard and determined by the arbitrators, umpire or Board of Appeal, as the case may be, in accordance with the Arbitration Rules and it is expressly agreed and declared that the obtaining of the award from the arbitration, umpire or Board of Appeal, as the case may be, shall be a condition precedent to the right of either party hereto or of any person claiming under either of them to bring any action or other legal proceedings against the other of them in respect of any such dispute." ;