1. After stating the facts of the case his Lordship proceeded: The plaintiff alleges that he was anxious to be heard by the arbitrators and to lay before them his evidence on the question of damages to be awarded to him.
2. The ordinary rule is that the enquiry before the arbitrator is assimilated as near as may be to the proceedings on a trial in the Courts. In the ordinary course, at the appointed time and place the parties appear with their witnesses to support their respective cases, as stated in Russell on Arbitration, 10th Edition, page 379. This rule has been applied in India. I need only refer to the leading case of Ganga Sahai v. Lekhraj Singh 9 A. 253 : 5 Ind. Dec. 604 and the Privy Council case of Amir Begam v. Badr-ud-din Husain 23 Ind. Cas. 625 : 36 A. 336: 18 C.W.N. 755 : 1 O.L.J. 249 : 12 A.L.J. 537 : 17 O.C. 120 : 16 Bom. L.R. 413 : (1914) M.W.N. 472 : 16 M.L.T. 35 : 27 M.L.J. 181 : 19 C.L.J. 494, where it is said:
If irregularities in procedure can be proved which would amount to no proper hearing of the matters in dispute there would be misconduct sufficient to vitiate the award without any imputation on the honesty or impartiality of the arbitrator.
3. Therefore, if the parties are not given notice of any meeting, in the ordinary case that would clearly amount to misconduct on the part or the arbitrators. The only question here is whether the case is an exceptional one to which, this ordinary rule does not apply. Mr. Munshi for the defendant relies upon the case of Johnston v. Cheape (1817) 5 Dow. 247 : 16 R.R. 114 : 3 S. R.R. 374 : 3 E.R. 1318. The submission in that case recited that the arbitrator had been appointed on account of his skill and knowledge of the subject, and it was held that the arbitrator was justified in refusing to receive certain evidence offered by one of the parties, if taking all the matters alleged to be facts into consideration', with his own local knowledge to guide him and all the circumstances in his view, he felt that such facts would have no effect upon his determination.
4. That case scarcely applies here. For, first of all, there is no recital either in the consent terms or in the order of reference, which was approved by the parties, that the arbitrators were appointed on account of their skill and knowledge of the subject. Secondly, this is not a case where the arbitrators merely refused to hear evidence,' but a case where they refused to hear, the parties at all. Therefore, this and similar rulings about arbitrators not examining witnesses do not, in my opinion, suffice to justify the departure from the general rule I have referred to. Then there' is the further point that the order approved by the parties clearly contemplates the arbitrators examining witnesses, so that it cannot be said that the terms of the order show-that the parties had agreed that the arbitrators should decide the matter without hearing the parties. No doubt there is the qualification 'if they think fit,' but I am inclined to agree with Mr. Setalvad's contention that this relates merely to the question of examining the witnesses upon oath, etc. As bearing on this matter, I may refer' to French Government v. Owners of Sections Tsurushima Maru (1921) 37 T.L.R. 261. In that case it was proved to be the present practice in commercial Arbitrations for the arbitrators to act as Advocates unless the parties gave notice of their desire to attend in person or by Solicitors or by Counsel; and as the arbitration clause there provided that, the arbitrators should be 'commercial men', it was held no evidence of misconduct that the umpire, without hearing the parties, had made his award on the case as presented by the arbitrator. But that is a very different case to this one, and it goes to show that there must be clear justification appearing, before the Court can allow a contention that the arbitrator had power to decide without hearing the parties.
5. Therefore, though I am reluctant to interfere with an award of this kind, I think that the omission did clearly amount to 'misconduct,' rendering the award liable to be set aside, under para. 15 of Schedule II of the C.P.C.
6. As the parties do not agree to the matter being remitted to the arbitrators for re-consideration, the award is set aside with costs.