# GREAT OFFSHORE LTD v. IRANIAN OFFSHORE - **Citation:** [2008] 12 S.C.R. 515 - **Court:** Supreme Court of India - **Decided:** 2008-08-25 - **Case number:** Arbitration Petition No.1 O of 2006 - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/great-offshore-ltd-v-iranian-offshore-23730 - **Pages:** 29 ## Headnote [2008] 12 S.C.R. 515 ../ GREAT OFFSHORE LTD. A II. IRANIAN OFFSHORE ENGINEERING & CONSTRUCTION COMPANY (Arbitration Petition No.1 O of 2006) AUGUST 25, 2008 8 Arbitration and Conciliation Act, 1996: s. 7 - Petition for appointment of arbitrator - On the basis of arbitration agreement faxed by petitioner - Claim of c respondent that there was no conclu(led agreement between parties and signatures on FAX agreement were forged - Held: Initial burden to prove that valid arbitration agreement existed was on petitioner - Fax header prima facie suggested that agreement was genuine - Burden shifted to respondent D to prove that the signatures on agreement were forged w~ich it failed to discharge - Thus valid arbitration agreement _,.. existed - Petition for appointment of arbitrator allowed - UNCITRAL Model Law on International Commercial Arbitration (1985). E s. 7(4)(a) - Arbitration agreement - Essential elements of - Held: Arbitration agreement has to be in writing and signed by both the parties, though no need for parties to sign every page of the arbitration agreement - Also no requirement that it has to be original - The Act defines the F ,....,_ term 'in writing' - Court is precluded from adding another term to the definition - Adding technicalities disturbs parties autonomie de la volonte - Interpretation of statutes - Adding or reading words into the statute. s. 7(4)(a) - FAX agreement - AcceptabHity of, under s. 7.,... G r-___. Held: FAX falls under 'other means of telecommunication' - Hence acceptable under s. 7 - Court to view the legislative intention especially in the light of Act's main objectives of minimizing the supervisory role of Courts in the arbitral process. 515 H ( 516 SUPREME COURT REPORTS [2008] 12 S.C.R. A Words and phrases: 'Fax' - Meaning of The parties had done business with each other in 2004. They expressed mutual interest for doing business for the second time. On June 23rd, 2005, the applicantpetitioner faxed an offer to the respondent. In turn, the 8 respondent faxed a letter of intent on the same day. Applicant acknowledged the award of contract in favour of respondent. On August 13th, the respondent faxed a letter to c the respondent, suggesting that additional provisions be incorporated in a new draft of the contract and further asked the applicant to pay the outstanding amount from the preceding contract. On August 22nd, the applicant allegedly sent the D faxed Charter Party Agreement (CPA) to the respondent. Both parties signed the faxed CPA, and it bore the applicant's seal. However, it did not bear the respondent's seal. On October 26, the respondent originally asserted that it never signed the faxed CPA E and that the document was forged. The applicant filed the present petition seeking appointment of sole arbitrator. The respondent contended that the two parties had not progressed beyond the stage of negotiation and that there was no F concluded contract between them and hence there was no question of referring the dispute to arbitration; and the "faxed CPA" of August 22nd was (1) a copy, not the original; (2) was stamped by one, not by both parties; (3) one of the parties did not sign every page; and (4) it G was first sent vide fax. Allowing the petition, the Court HELD: 1.1. The burden to prove that a valid contract containing an arbitration clause existed first rested on H the applicant, as it was the applicant who moved this GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 517 ENG. & CONST. COMPANY v Court. The faxed CPA, on its face, appears legitimate, A thus the onus shifted to the respondent to prove that it was forged. It appears, prima facie, to be legitimate because it bears the heading "08-SEP-2005 13:52 FROM IOEC HEAD OFFICE TO ALLAHVER[)I" (the "fax header"). This is an important piece of evidence that s makes its genuineness more probable. Hypothetically, the applicant could have fabricated the fax header. But that is highly unlikely and presumes much more than what is expected in nor ## Text _Characters 0–39,893 of 55,985. This is a partial read: ask again with offset=39893 for what follows._ [2008] 12 S.C.R. 515 ../ GREAT OFFSHORE LTD. A II. IRANIAN OFFSHORE ENGINEERING & CONSTRUCTION COMPANY (Arbitration Petition No.1 O of 2006) AUGUST 25, 2008 8 Arbitration and Conciliation Act, 1996: s. 7 - Petition for appointment of arbitrator - On the basis of arbitration agreement faxed by petitioner - Claim of c respondent that there was no conclu(led agreement between parties and signatures on FAX agreement were forged - Held: Initial burden to prove that valid arbitration agreement existed was on petitioner - Fax header prima facie suggested that agreement was genuine - Burden shifted to respondent D to prove that the signatures on agreement were forged w~ich it failed to discharge - Thus valid arbitration agreement _,.. existed - Petition for appointment of arbitrator allowed - UNCITRAL Model Law on International Commercial Arbitration (1985). E s. 7(4)(a) - Arbitration agreement - Essential elements of - Held: Arbitration agreement has to be in writing and signed by both the parties, though no need for parties to sign every page of the arbitration agreement - Also no requirement that it has to be original - The Act defines the F ,....,_ term 'in writing' - Court is precluded from adding another term to the definition - Adding technicalities disturbs parties autonomie de la volonte - Interpretation of statutes - Adding or reading words into the statute. s. 7(4)(a) - FAX agreement - AcceptabHity of, under s. 7.,... G r-___. Held: FAX falls under 'other means of telecommunication' - Hence acceptable under s. 7 - Court to view the legislative intention especially in the light of Act's main objectives of minimizing the supervisory role of Courts in the arbitral process. 515 H ( 516 SUPREME COURT REPORTS [2008] 12 S.C.R. A Words and phrases: 'Fax' - Meaning of The parties had done business with each other in 2004. They expressed mutual interest for doing business for the second time. On June 23rd, 2005, the applicantpetitioner faxed an offer to the respondent. In turn, the 8 respondent faxed a letter of intent on the same day. Applicant acknowledged the award of contract in favour of respondent. On August 13th, the respondent faxed a letter to c the respondent, suggesting that additional provisions be incorporated in a new draft of the contract and further asked the applicant to pay the outstanding amount from the preceding contract. On August 22nd, the applicant allegedly sent the D faxed Charter Party Agreement (CPA) to the respondent. Both parties signed the faxed CPA, and it bore the applicant's seal. However, it did not bear the respondent's seal. On October 26, the respondent originally asserted that it never signed the faxed CPA E and that the document was forged. The applicant filed the present petition seeking appointment of sole arbitrator. The respondent contended that the two parties had not progressed beyond the stage of negotiation and that there was no F concluded contract between them and hence there was no question of referring the dispute to arbitration; and the "faxed CPA" of August 22nd was (1) a copy, not the original; (2) was stamped by one, not by both parties; (3) one of the parties did not sign every page; and (4) it G was first sent vide fax. Allowing the petition, the Court HELD: 1.1. The burden to prove that a valid contract containing an arbitration clause existed first rested on H the applicant, as it was the applicant who moved this GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 517 ENG. & CONST. COMPANY v Court. The faxed CPA, on its face, appears legitimate, A thus the onus shifted to the respondent to prove that it was forged. It appears, prima facie, to be legitimate because it bears the heading "08-SEP-2005 13:52 FROM IOEC HEAD OFFICE TO ALLAHVER[)I" (the "fax header"). This is an important piece of evidence that s makes its genuineness more probable. Hypothetically, the applicant could have fabricated the fax header. But that is highly unlikely and presumes much more than what is expected in normal human conduct especially when that conduct concerns the forgery of an executive c officer's signature. It should not be forgotten that this case is between sophisticated companies, not warring family members that dispute the authenticity of a Will. [Para 55] [536-F-H, 537-A] Dresser Rand S.A. v. Mis. Bindal Agro Chemical Ltd. D & Another, AIR 2006 SC 871 - relied on. May & Butcher Limited v. The King (1934) 2 KB 17; Ml s. Rickmers Verwaltung Gimb .H v. Indian Oil Corporation Ltd., AIR 1999 SC 504 - referred to. E Chitty on Contracts [29th Edn. Vol.1] - referred to. 1.2. There is no evidence· to suggest that the faxed CPA was forged. To the contrary, the evidence is the faxed CPA bearing the parties' signatures coupled with correspondence between the parties. The F correspondence, as it is more than just a pleading, adds additional weight to the applicant's story. The applicant's letter of 21st October corroborates the allegation that respondent's official delivered the faxed CPA to the applicant on 12th September. The date of delivery of G 12th September fits the timeline provided on the fax t- "· header, as the respondent could only have delivered the faxed CPA after 8th September. Moreover, it appears that having received the faxed CPA on 12th September, the applicant was prompted to ask for the original vide H .... 518 SUPREME COURT REPORTS [2008] 12 S.C.R. A email on 14th September. Once again, the dates match ·"* up. [Para 57] [537-C-E] 2.1. In terms of Section 7(3) and 7(A)(a) of Arbitration and Conciliation Act, 1996, the arbitration agreement has to be in writing and signed by the parties. There is no B requirement that the arbitration agreement has to be an original. Where the statute has gone to great lengths to define exactly what is meant by the term "in writing," the Court is precluded from adding another term to definition. Indeed, "it is contrary to all rules of c construction to read words into an Act unless it is absolutely necessary to do so." An exception to this rule can be made. But before adding words to a statute, the Court must be abundantly clear of three matters: (1) the intended purpose of the statute or provision in question, (2) that by inadvertence the draftsman and D Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have used, had the error in the Bill been noticed. One of the main objectives of the Arbitration and Conciliation Act, 1996 is to minimise the E role of the Court; adding additional requirements to the Act is antithetical to such a goal. [Paras 61- 64] [539E,G-H, 540-A,B] Bihar State Mineral Development Corporation & Another v. Encon Builders (1) (P) Ltd., (2003) 7 SCC 418; K.K. Modi F v. K.N. Modi & Others, (1998) 3 SCC 573; Renula Bose (Smt.) v. Rai Manmathnath Bose, AIR 1945 PC 108; Assessing Authority-Cum-Excise and Taxation Officer, Gurgaon & Another v. East India Cotton Mfg. Co. Ltd., Faridabad (1981) 3 SCC 531 - relied on. G Stock v. Frank Jones (Tiptan) Ltd., (1978) 1 All ER 948, p.951; Justice G.P. Singh's Principles of Statutory Interpretation, 11th Edition, 2008 - referred to. H 2.2. Section 7 does not require that the parties stamp I ~ GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 519 ENG. & CONST. COMPANY the agreement. It would be incorrect to disturb the A Parliament's intention when it is so clearly stated and when it in no way conflicts with the Constitution. [Para 65] [540-C] 2.3. Nothing in Section 7 suggests that the parties must sign every page. Even if the faxed CPA is construed 8 as a "document," it need only be "signed by the parties" pursuant to Section 7(4)(a). Every page does not need to be signed. If it is considered a "document," then this requirement would be met. Both parties signed the faxed CPA in the signature box at the bottom of Part I. That C said, the faxed CPA more closely fits within Section 7(4)(b)'s requirements. [Para 66] (540-D-F] 2.4. Section 7(4)(b) states that an agreement is in writing if it is contained in "an exchange of letters, telex, 0 telegrams or other means of telecommunication which provide a record of the agreement." This section covers agreements that are sent via facsimile ("fax") as they are "other means of telecommunication". "Fax" is defined as "a machine that scans documents electronically and transmits a photographic image of the contents to a E receiving machine by telephone line'' or "a document received by such a machine." This definition clearly provides that a fax falls under "other means of telecommunication." Thus, faxed agreements are acceptable under Section 7 of the Act. [Para 67] [540-F-H, 541-A] F Chambers 21st Century Dictionary - referred to. 2.5. With no evidence to indicate that the respondent's signature was forged, the faxed CPA stands on its own as the record of agreement. Likewise, G Section 7(4)(b) stands satisfied. The court has to translate the legislative intention especially when viewed in light of one of the Act's "main objectives": "to minimise the supervisory role of Courts in the arbitral process. Adding technicalities disturbs the parties' "autonomy of H 520 SUPREME COURT REPORTS [2008] 12 S.C.R. A the will" (I' autonomie de la volonte}, i.e., their wishes. If this Court adds a number of extra requirements such as stamps, seals and originals, then ·the parties' intention to arbitrate would be foiled by formality. Such a stance would run counter to the very idea of arbitration, wherein B tribunals all' over the world generally bend over backwards to ensure that the parties' intention to arbitrate is upheld. [Paras 68- 71] [541-8,C,E,F] 2.6. Technicalities like stamps, seals and even signatures are red tape that have to be removed before C the parties can· get what they really want - an efficient, effective and potentially cheap resolution of their dispute. The autonomie de la volonte doctrine is enshrined in the policy objectives of the United Nations Commission on International Trade Law ("UNCITRAL") Model Law on D International Commercial Arbitration, 1985, on which Indian Arbitration Act is based. The courts must implement legislative intention. It would be improper and undesirable for the courts to add a. number of extra formalities- not envisaged by the legislation. The courts E directions should be to achieve the legislative intention. [Para 71, 72] (541-H, 542-A-C]' Law and Practice of International Commercial Arbitration, Alan Redfern and Martin Hunter, Street & Maxwell, London, 1986; · Model Law on International Commercial F Arbitration, 1985 - referred to. 3.1. Once it is established that the faxed CPA is valid, it follows that a valid contract and a valid arbitration clause exist. This contract, the faxed CPA, does not suffer G from a conditional clause, as did the Letter of Intent. Thus, the respondent's argument that the parties were not ad idem must fail. [Para 74] (542-G] 3.2. The charter party agreement that had been signed by the applicant and the respondent clearly H indicated that the parties have entered into a valid and " i GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 521 ENG. & CONST. COMPANY ~f concluded contract. The other correspondence between · A the parties also leads to a definite conclusion: the parties have entered into a valid contract containing an arbitration clause. Since a dispute has arisen between y ·, the applicant and the respondent, it needs to be referred to the arbitrator. On consideration of the totality of the B facts and circumstances, the applicant is entitled in law to an order for appointment of a sole arbitrator. Consequently, Hon'ble Justice S.N. Variava, the retired Judge of the Supreme Court is requested to accept this arbitration. [Para 75, 76] [542-H, 543-A,C] Case Law Reference AIR 2006 SC 871 AIR 1999 SC 504 {2003) 1 sec 418 (1998) 3 sec 573 AIR 1945 PC 108 (1981) 3 sec 531 relied on Para 51 referred to Para 51 relied on Para 61 relied on Para 61 relied on Para ?3 relied on Para 63 c D ORIGINAL CIVIL JURISDICTION : Arbitration Petition No. E 10 of 2006 S.K. Mukherjee, Vivek Kishore, Sangeeta Bharti, Ruchi Gaur Narula and S.R. Setia for the Appellant. Shrish Kumar Misra, Garbesh Kabra, Ajay Kr. Singh and F ~ Uma Bhattacharya for the Respondents. The Judgment of the Court was delivered by DALVEER BHANDARI, J. 1. Great Offshore Limited has filed a petition under section 11 (5)(6)(9) and (12) of the G Arbitration and Conciliation Act, 1996 whereby the applicant seeks the appointment of a sole arbitrator. The applicant, Great Offshore Ltd., submits that it has entered into a charter party agreement with the respondent, Iranian Offshore Engineering & Construction Company. The charter party agreement ("CPA") H 522 SUPREME COURT REPORTS [2008] 12 S.C.R. A contains an arbitration clause. Relying on this' .. Clause, the applicant has asked this Court to appoint an· arbitrafor to resolve the dispute. The respondent, however, contends that the two parties had not progressed beyond the stage of negotiation and that there is no concluded contract between B them. Therefore, it is argued that th·ere is no question of referring the dispute to arbitration. 2. Brief facts which are relevant to dispose of this J arbitration petition are recapitulated below. 3. The charter party agreement in dispute marks the C second time the parties have done business with each other. The first time was in 2004. In March of that year, the respondent entered into a contract with the Oil and Natural Gas Corporation Limited ("ONGC") to carry out construction work on ONGC's installations at Bombay High. On 26th October, D 2004, the applicant and the respondent entered into a charter party agreement. Under this prior agreement, the respondent hired a vessel combination from the applicant. The respondent required a specialized offshore construction barge known as a "Gal Constructor." It also required an anchor handling tug, E named "AHT Malaviya Five." The AHT Malaviya is used in combination with the Gal Constructor. I shall refer to the Gal Constructor and the AHT Malaviya as the "vessel combination." 4. The respondent needed this combination to. execute offshore work for ONGC. This work was part of ONGC's F RSPPM project, Phase I. The first phase was completed in : November 2004. 5. In this case, the controversy is confined to the alleged agreement relating to the second phase of ONGC's project. G 6. In this arbitration petition, I need to decide whether the pa'rties have entered into a valid contract containing an arbitration clause. To this end, it has become imperative to review the relevant correspondence between them. Only then will I be able to arrive at a conclusion as to whether there was a concluded contract or whether the parties had never . H , ·progressed beyond the stag~ of negotiation. ..... · GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 523 ENG. & CONST. COMPANY [DALVEER BHANDARI, J.] ..,.r 7. After the parties expressed mutual interest in resuming A business for Phase 11, the respondent faxed a letter to the applicant. The letter is dated June 20th, 2005. In this letter, the respondent expressed its intention to use the applicant's vessel combination for 170 days pursuant to the same terms as the preceding agreement. A few amendments, however, B ' were to be made to that agreement. 'f 8. The applicant responded vide email the next day and stated that it would like to "come to an agreement." After meeting the respondent on 22nd June, the applicant faxed an offer to the respondent on June 23rd, 2005. c 9. In turn, the respondent faxed a letter of intent on June 23rd, 2005. The letter stated that it was " ... a firm and unconditional letter of intent (for short LOI) for award of contract for charter hire of your barge Gal Constructor and Malviya 5". D Nevertheless, the very same letter contained a contingency clause: "This Agreement is subject to IOEC [respondent] providing a suitable barge and AHT acceptable to GE Shipping [applicant] for a period of 45-55 days on mutually agreed rates for commencement between 25th E October and 10th November 05 for BHN MOL project works." 10. On July 15\ 2005, the respondent's minutes of meeting indicate that the barge (vessel) was to be available for visual examination .i ••• until 25th of July after which the barge F .. will leave AJMAN port in UAE for the project in PG". 11. On August 4th, 2005, the applicant explained that it no longer wanted the respondent to provide a barge for 4555 days, as mentioned in the respondent's June 23rd letter of G intent. Because the parties could not agree on the rate for this service1 the applicant said that it would make alternate arrangements. 12. On August 11th, the respondent sent a letter in regard to modifying the Barge Gal Constructor so that it could function H 524 SUPREME COURT REPORTS [2008] 12 S.C.R. A as a riser installation barge. Based on its engineering analysis, '-r it sought to install " .... 5 davits in the port or STBD side at the barge" as well as a " ... working platform as an extension to main deck in the aft quarter over one of the anchor rests". 13. In response to a meeting on August 8th and the above B letters, the respondent faxed a letter to the applicant on August 13th, 2005. The letter suggested that additional provisions be f :.>f.. incorporated in a new draft of the contract. The respondent requested the right to modify the Gal Constructor, thereby enabling it to perform a riser installation. The respondent further c asked the applicant to pay the outstanding amount (USO 188,500) from the preceding contract. In conclusion, the respondent stated that it would be willing to finalize the contract before the 30th of August. "' 14. On 16th August, the parties met to discuss the D proposed changes. The applicant formally responded to the respondent's suggestions in a letter dated August 22nd, noting .._ that the parties had come to the following agreement regarding a number of outstanding issues: '.)- E S. No. Clause Agreement 1 Modifications for Riser Clause on the basis of Installation Addendum 3 to Charter ' Party dated 26th Oct 04 to be incorporated · f • 2 Early Termination Clause It was mutually agreed not to include the clause suggested 3 Employment of vessel Clause as per Charter Party dated 26th Oct 04 to be incorporated G 4 Sublet Clause Clause 17 of the charter party to be referred in d additional clause pertaining to sublet ,. H 5 . Cred.it note issue Addressed hereunder GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 525 ENG. & CONST. COMPANY [DALVEER BHANDARI, J.] ~· ... we confirm our acceptance of the credit note amounting A to US$186,618 ... for subject vessel combination for charter party dated 25th Oct 2004 .... " 15. Before proceeding with the correspondence, it is pertinent to note that the faxed charter party agreement ("faxed CPA") is dated August 22nd. After having settled a number of B '¥ outstanding issues vide the above letter, the applicant allegedly ;y. sent the faxed CPA to the respondent on the same day. 16. The faxed CPA officially entitled the "Charter Party for Offshore Service Vessels Code Name 'Supplytime 89"' c dated August 22nd, 2005 is reproduced, in relevant part. The "charterer" is the respondent, and the applicant is the "owner": 1. Place & Date. Mumbai, India. 22nd August 2005. . .. 9. Period of Hire. 204 days firm I minimum ... 14. Early termination of charter (state amount of hire payable) D (Cl. 26(a)) Not Applicable. 18. Employment of Vessel restricted to (state nature of service(s)) (Cl Sa)) Hook up, commissioning, accommodation and E offshore Installation work such as I-Tube installation and Riser Installation and all other activities of RSPPM Project, within Vessel's natural Capabilities and safe practices/ operations. 19. Charter Hire (state rate & currency) (Cl 10(a) & (d)) F -· USO 31,000 ... PDPR ... 22. Payments ... Payments shall be made against acceptable, unconditional, revolving and irrevocable Letter of Credit G issued at sight by the Charterer's bank for USO ~ 6,500,000 ... These L/C(s) to be opened, latest by 15th September 2005. However draft of L/C(s) should be provided to the Owners by 1st September 2005. H A B 526 SUPREME COURT REPORTS [2008] 12 S.C.R. 33. Law and arbitration (state Cl 31 (a) or 31 (b) or 31 (c), as agreed, If 31c agreed also state place of arbitration) (Cl.31) Clause 31 (c)-lndianArbitration and Conciliation Act, 1996 at Mumbai • 17. I must provide some background before dealing with other documents, as the faxed CPA sits at the center of this .dispute. C 18. It appears that both parties signed the faxed CPA, and it bears the applicant's seal. However, it does not bear the respondent's seal. The applicant contends that it had sent the original to the respondent on August 22nd. The respondent did not return the original. Instead, on September 8th, the D respondent's head office faxed a copy of the CPA to its local office. [The top of the said fax shows the date and time as well as the place from and to which it was sent; it reads "08S E P-2005 13:52 FROM IOEC HEAD OFFICE TO ALLAHVERDI"]. This faxed copy is signed by the. respondent'~ Project Director, Mr. M. Sabbaghi. E 19. The respondent's Mr. Ali Rahmati provided the applicant the faxed CPA on October 12th, according to the applicant's letter dated October 21st. In a letter dated October 26, the respondent originally asserted that it never signed the F faxed CPA and that the document was forged. 20. Between the date on which the applicant sent the faxed CPA - 22nd August - and the date on which the respondent reportedly returned it to the applicant - 12th September, ONGC had advised the respondent to get the G vessel combination certified before proceeding with a Riser installation. ONGC's letter dated 30th August stated that the vessel did not have any past track record with riser installations. 21 . The applicant later expressed concern that the respondent's failure to return the original contract, i.e., charter H '( ·¥ .;-· GREAT OFFSHORE LTD. v. IRANIAN OFFSHORE 527 ENG. & CONST. COMPANY [DALVEER BHANDARI, J.] o/ party agreement, could result in undue delay. In an email sent A at 9:03 a.m. on 14th September, the applicant stated, in relevant part, that:- " ... You would appreciate that it is imperative for us to have the charter party with us in order to initiate actions from B various departments such as operations, fleet personnel, '; accounts etc to prepare for the said contract and in ,'.¥ absence of this document we are not in a position to push for same. This will result in last minute hassles and delays. " c 22. The respondent's email rejoinder came at 4:31 p.m. on the same day. The relevant part reads as under:- " The CPA of Gal Constructor and Malavya 5 is ready in our D office and will be hand over to you. '"!' " 23. On September 15th, 2005, the applicant sent the following email to the respondent. It reads in relevant part as E under:- "1. Understand that charter party is ready in your office. However, we are yet to receive the same and urgently require it to be circulated among the concerned departments so that they are prepared for the next contract. F ~'\- Will get in touch with your office again today for the same_ " 24. The respondent faxed a letter dated September 23rct, 2005 to the applicant. The letter asks the applicant to issue a cheque for the outstanding amount due from the parties' G ;~ Phase I work. It further demands that the applicant grant the respondent the sole and absolute right to sublet the vessel to its subcontractor(s) at the agreed charter party rate. It concludes by saying that the respondent " ... can not conclude the charter party agreement until the above issue are settled." H 528 SUPREME COURT REPORTS [2008] 12 S.C.R. . A h ~~ 25. On September 24t , the respondent met with Likpin 1 B· c . Engineers to discuss whether the applicant's vessel could be converted to perform a riser installation. Likpin surveyed the vessel on_ 23rd September 2005 and, in the following minutes, concluded that:- . "Taking into account the number of problems associated with the vessel, it is the conclusion of Likpin and IOEC that the Gal Constructor is not suitable as a riser installation . . . . the vessel size combined with the limited crane reach , cannot be corrected or overcome and hence the vessel should not be chart~red for riser installation operations." 26. fn a letter dated September 27th, 2005, the respondent again asked the applicant to issue a cheque or remit $186,618. It once again demanded that it be granted 0 the right to sublet the vessel and that until those issues were settled, it could not conclude the CPA. '( :¥.. I 27. In a letter dated September 29th, 2005, the respondent reiterated its demands, namely, that the applicant ::.. remit $186,618 and that it provide the respondent with the E sole and absolute right to sublet the vessel combination. It admitted that this payment had nothing to do with Phase 11 of the project and thus " ... has no connection with the current negotiations and should be closed out immediately, so that Phase II can begin on a clean slate." It further stated that: F " ... the sole and absolute right to sublet the vessel to IOEC -1· subcontractors ... is an essential element in IOEC work · ' G H plan for Phase II. ... Lack of, or delay in, the ability to exercise the sublet option will impact on IOEC work plan and also affect the cost schedule of RSPPM project and is not acceptable to IOEC. Please note that time is running short and in absence of GESCO's immediate compliance ;>---< with above two requirements IOEC may be compelled to tal