M/S MANGALA CASHEW INDUSTRIES vs CONNECT INDIA TANZANIA CO LTD

HC-KAR
NC: 2026:KHC:55092
WP No. 28408 of 2024

CNR: KAHC010553022024




IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 5 DAY OF OCTOBER, 2026


BEFORE

HON'BLE MS. JUSTICE TARA VITASTA GANJU

WRIT PETITION NO. 28408 OF 2024 (GM-CPC)

BETWEEN:

M/S. MANGALA CASHEW INDUSTRIES
A REGISTERED PARTNERSHIP FIRM,
HAVING ITS OFFICE AT D NO. 1-1,
PADAVINANGADY,
MANGALORE CITY-575 008.
REPRESENTED HEREIN BY ITS PARTNER
AND AUTHORISED SIGNATORY
MRS. VAISHNAVI.V.KAMATH.
…PETITIONER
(BY SMT. PARIM LALLA., ADVOCATE FOR
SRI. NARENDRAH.H.N., ADVOCATE)

AND:

1. CONNECT INDIA TANZANIA CO. LTD.,
A COMPANY REGISTERED UNDER THE
LAW OF TANZANIA
HAVING OFFICE AT
1209, YOUTH CLUB ROAD,
DOUBLE TREE HOTEL ROAD, MASAKI,
DAR ES SALAM, TANZANIA-11103.

(AND ALSO HAVING OFFICE AT
FASHIONS INC. PVT. LTD.,
NO. 24, SHIVAJI NAGAR,
GANDHINAGRAMSOUTH KARUR 639004)
REPRESENTED HEREIN BYITS MANAGING DIRECTOR,
MR. CHANDRASEKARAN VENKITARAMAN.

2. MR. CHANDRASEKARAN VENKITARAMAN
AGED ABOUT 65 YEARS,











Digitally signed
by JAI JYOTHI J
Location: HIGH
COURT OF
KARNATAKA

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FATHER’S NAME NOT KNOWN,
RESIDING AT HOME FASHIONS INC. PVT. LTD.,
NO.24, 25, SHIVAJI NAGAR,
GANDHINAGARAM, SOUTH KARUR,
TAMILNADU-639 005.

3. MRS. RUKMINI CHANDRASEKARAN
AGED ABOUT 61 YEARS,
W/O MR. CHANDRASEKARAN VENKITARAMAN,
RESIDING AT HOME FASHIONS INC. PVT. LTD.,
NO. 24, 25, SHIVAJI NAGAR, GANDHINAGARAM,
SOUTH KARUR, TAMILNADU-639 005.
…RESPONDENTS
(BY SMT. SHIVANI SHETTY., ADVOCATE FOR
SMT. AKANKSH ASHOK., ADVOCATE FOR R1 TO R3)


THIS WP IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION
OF INDIA, 1950, PRAYING TO SET ASIDE THE IMPUGNED ORDER
DATED: 01.04.2023 PASSED BY THE 1ST ADDL. DISTRICT AND
SESSIONS JUDGE (COMMERCIAL COURT), D.K., MANGALORE
(ANNEXURE-A) ON ISSUE NO.6 THAT HAS BEEN TREATED AS
PRELIMINARY ISSUE IN COM.O.S NO. 1/2022, AND THEREBY
RESTORE THE SUIT IN COM. OS NO. 1/2022 TO THE FILES OF
THE 1ST ADDL. DISTRICT AND SESSIONS JUDGE (COMMERCIAL
COURT), D.K., MANGALORE AWARD COSTS OF THE PRESENT
PROCEEDINGS.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’
GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:


CORAM: HON'BLE MS. JUSTICE TARA VITASTA GANJU


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HC-KAR
NC: 2026:KHC:55092
WP No. 28408 of 2024

CNR: KAHC010553022024


ORAL ORDER

1. The present petition seeks to challenge an order dated
01.04.2023 passed by the I Additional District Judge &
Commercial Court, D.K. Mangaluru in Com.O.S.No.1/ 2022
(hereinafter referred to as the ‘Impugned Order’).

2. By the Impugned Order, the learned Commercial
Court has referred the suit to an Arbitrator and has directed
to return the plaint and also to refund the entire court fees.
3. The learned counsel for the petitioner submits that the
Impugned Order suffers from an infirmity, in as much as
the order has been passed referring the matter to
arbitration despite no existence of an arbitration clause.
Reliance is placed on the contract executed between the
parties both on 17.01.2017 as well as the revised contract
dated 24.01.2017 which does not contain any arbitration
clause.3.1 Learned counsel for the petitioner submits that
although the application under Section 8 of the Arbitration
and Conciliation Act, 1996 (hereinafter referred to as the
‘A&C Act’) was filed within the requisite time, the learned
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CNR: KAHC010553022024


Commercial Court ought to have examined the agreement
to see if an arbitration clause in fact exists. She further
submits that even the compliance of Section 8 of the A&C
Act was not done by the respondents/defendants, since the
original agreement was not placed on record.

4. Learned counsel for the respondents/defendants on
the other hand, seeks to rely upon the arbitration clause as
existing in both the contracts executed on 17.01.2017 and
24.01.2017 between the parties. Learned counsel however
does not refute the suggestion that the original agreements
were not filed before the Court.

5. An examination of the contracts executed between the
parties reflects that there were two contracts executed, the
first on 17.01.2017 which is a one-page contract termed as
a Revised Contract and is in fact a purchase order which
sets out the details of the seller, seller bank, buyer,
product/origin, quantity, price, packing, out turn, quality,
shipment period, place of loading, destination, insurance,
as well as the documents required and payment. It also sets
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NC: 2026:KHC:55092
WP No. 28408 of 2024

CNR: KAHC010553022024


out as “Other Conditions” that arbitration and litigation, if
any, will be settled amicably on “Mangalore court
jurisdiction only”. The contract dated 17.01.2017 is set out
below:
“ Re: DVL/158 Date: 17.01.2027
“REVISED CONTRACT
On behalf of Seller and buyer we hereby confirm the
following contract. Thanks for the following business
confirmation details as follows:

Seller: Connect India (TZ) Co. Ltd.
1209, Yacht Club Road, Masaki.
Dar Es Salaam, Tanzania.
Seller Bank: NMB Bank Plc
Oyster Bay Branch, 12109, Vacht Club Road
Masaki, Dar Es Salaam, Tanzania.
A/c No: 23910000271
Swift Code: NMIBTZTZ
Buyer: M.P.K. MINING equipment & Supplies FZC PO Box
38116, Ras Al Khaimah, UAE
Product/Origin:

Well Sun Dried Cashew nut in shell Crop 2016 of
Tanzania origin
Quantity: 500 MT (+/-10% allowed)
Price: USD 1900 C&F Catlai/Mangalore port
Packing: Approximately 80 kgs to 90 kgs in seaworthy good
quality jute bags
Out turn: 51 lbs Min per 80Kgs bag/nut count 200 per kg
Quality: Shipped quality landed weight (Vina Control/RBS
Report)
Shipment
Period:
January 2017
Place of
Loading:
Mtwara port
Destination: Catlai/Mangalore Port
Insurance: Buyer’s Account
Documents
Required:
1) Commercial invoice, 2) 3/3 original bill of lading
- shipped on board (CMA-CGM, PIL), 3) Certificate
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of Origine DGFT-LDC),4) Phytosanitary Certificate,
5) Fumigation certificate, 6) Packing list, 7) weight
certificate, 8) Quality Inspection
Payment: 30% Advance immediate 65% TT payment against
copy documents, balance 2% against Vina
control/RBS report
Other
Conditions: 1. Arbitration and litigation if any will settle
amicably or Mangalore court jurisdiction only.
2. 21 Free days to be granted to this consignment
and same should be mentioned in the bill of lading.
3. Seller must take care for the net weight of the
container and take precaution to prevent the
pilferage.
4. After Vessel sailing within 5 days B/1 copy
should be sent by you to us by mail.
5. Before sending the original documents through
courier send the copy of the same to us and only
after our confirmation submit the same through
courier, if not then there is any mistake in
documents then seller is solely responsible for the
same.
6. If shipment is not effected within the shipment
period and market is favourable then buyer may
extend the shipment period, if not then buyer may
cancel/ renegotiate the contract price. If contract
is defaulted by Buyer/seller then defaulter must
pay 10% of the invoice value
7. This Contract is subject to Force Majeure clause.

6. The contract dated 24.01.2017 also sets out certain
terms and conditions between the parties. However, the
arbitration clause in this contract is a one-liner which reads
as follows:
“Arbitration: This contract shall be governed and
construed in accordance with the Existing U.A.E. law.”



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7. Section 7 of the A&C Act while defining an ‘arbitration
agreement’ provides that an arbitration agreement is an
agreement by the parties to submit to arbitration all or
certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship,
whether contractual or not. Sub-section (2) of Section 7 of
the A&C Act provides that an arbitration agreement may be
in the form of an arbitration clause in a contract or in the
form of a separate agreement. Section 7(3) and (4) of the
A&C Act provides that the arbitration agreement should be
in writing and can also be contained in a document signed
by the parties or exchange of letters, telex, telegrams or
other means of telecommunication. Section 7 of the A&C
Act, is reproduced below:
“7. Arbitration agreement.
(1) In this Part, arbitration agreement means an
agreement by the parties to submit to arbitration all or
certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship,
whether contractual or not.
(2) An arbitration agreement may be in the form of an
arbitration clause in a contract or in the form of a separate
agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained
in
(a) a document signed by the parties;
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CNR: KAHC010553022024


(b) an exchange of letters, telex, telegrams or other
means of telecommunication including communication
through electronic means which provide a record of the
agreement; or
(c) an exchange of statements of claim and defence in
which the existence of the agreement is alleged by one
party and not denied by the other.
(5) The reference in a contract to a document containing
an arbitration clause constitutes an arbitration agreement
if the contract is in writing and the reference is such as to
make that arbitration clause part of the contract.”

8. As can be seen from the extract above, what is being
sought to be termed as an ‘arbitration clause’ as in the
contract executed on 17.01.2017 can at best be stated to
be a jurisdiction clause while the contract on 24.01.2017,
references only the governing law of the contract. Neither
clause could qualify as an arbitration clause/agreement
between the parties.

9. Thus, the agreement between the parties which is
extracted in both these documents, does not in fact provide
for an arbitration between the parties. Neither is there an
arbitration clause in existence nor is there a separate
arbitration agreement in existence between the parties.

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10. In addition, Section 8 of the A&C Act provides that an
application under sub-section (2) of Section 8 will not be
entertained unless there is an original agreement or a duly
certified copy of the arbitration agreement placed before the
Court. The relevant extract of Section 8 is set out below:
“8. Power to refer parties to arbitration where there
is an arbitration agreement. -

[(1) A judicial authority, before which an action is
brought in a matter which is the subject of an
arbitration agreement shall, if a party to the
arbitration agreement or any person claiming
through or under him, so applies not later than the
date of submitting his first statement on the
substance of the dispute, then, notwithstanding any
judgment, decree or order of the Supreme Court or
any Court, refer the parties to arbitration
unless it finds that prima facie no valid
arbitration agreement exists.]

(2) The application referred to in sub-
section(1) shall not be entertained unless it is
accompanied by the original arbitration
agreement or a duly certified copy thereof.

[Provided that where the original arbitration
agreement or a certified copy thereof is not
available with the party applying for reference to
arbitration under sub-section (1), and the said
agreement or certified copy is retained by the other
party to that agreement, then, the party so
applying shall file such application along with a copy
of the arbitration agreement and a petition praying
the Court to call upon the other party to produce
the original arbitration agreement or its duly
certified copy before that Court.]

(3) Notwithstanding that an application has been
made under sub-section (1) and that the issue is
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WP No. 28408 of 2024

CNR: KAHC010553022024


pending before the judicial authority, an arbitration
may be commenced or continued and an arbitral
award made.”
[Emphasis Supplied]

11. It is undisputed by the parties that the original was
not filed before the Court. Thus, the application in any
event, could not have been allowed. Although the
Commercial Court examined this aspect, it has not
examined sub-section (1) of Section 8 of the A&C Act and
failed to notice sub-section (2) of Section 8 of the A&C Act
in the Impugned Judgment.

12. In any event, as is set out above, the agreement
between the parties does not in fact contain any arbitration
clause whatsoever. Accordingly, the petition stands
allowed. The Impugned Order dated 01.04.2023 passed by
the I Additional District Judge & Commercial Court, D.K.
Mangaluru in Com.O.S.No.1/2022, is set aside. Pending
applications, if any, stand closed.
Digitally signed by TARA
VITASTA GANJU
Location: HIGH COURT OF
KARNATAKA
Sd/-
(TARA VITASTA GANJU)
JUDGE
KS
List No.: 1 Sl No.: 34
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