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Deutsche Stahl-metallhande Isgesells. Haft Vs. Jamna Auto Industries - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberCivil Miscellaneous Appeal No. 746 of 1968
Judge
Reported inILR1970Delhi156
ActsArbitration Act, 1940 - Sections 13
AppellantDeutsche Stahl-metallhande Isgesells. Haft
RespondentJamna Auto Industries
Advocates: Y.K.Kumar,; M.K. Chawla,; G.S. Vohra and;
Cases Referred and Union of India v. Messrs. South India Corporation Madras
Excerpt:
.....act (1940), sections 13 & 14 - scope of clause (b) of section 13 --special case stated by arbitrator--question of law may be subject matter of--such question must, however, relate to subject matter of reference and not procedure.; that questions of law in relation to the procedure before the arbitrator cannot be referred to the court as and by way of special case under section 13(b), and the questions of law which can be referred must relate to the subject-matter of the reference, or in other words, the merits of the controversy between the parties, and may be referred either before the actual making of the award or stated in the form of a special case in the award.; the court will not have any say in the matter of procedure adopted by the arbitrator so long as such procedure..........pronounce its opinion thereon and such opinion shall be added to, and shall form part of, the award. the opinion is not binding upon the arbitrator. he may follow it or he may not. the only legal requirement is that the opinion of the court is added to and forms part of the award. in this connection only a reference may be made to union of india v. m/s ram sukh das and bros., and union of india v. messrs. south india corporation madras (private) ltd. (6) the scope of section 13(b) has, thereforee, to be determined in the background of the consultative nature of the opinion of the court and the fact that the arbitrator is the master of the procedure before him. as stated hereinbefore, the question of law in respect of which a special case is stated must be a question of law involved.....
Judgment:

S.N. Andley, J.

(1) This petition purports to have been filed on behalf of three arbitrators who had been appointed as such under a contract dated July 8, 1966, entered into between the claimants and the respondents. The arbitrators have staled a special case under the provisions of section 13(b) of the Arbitration Act, 1940, for the opinion of this Court on the following questions :-

'1. Whether having regard to its Rules the Tribunal of Arbi

(2) The respondents have raised a preliminary objectoion that the questions on which the arbitrators have sought the opinion of this Court are questions relating to procedure before the arbitrators even assuming that they are questions of law and, thereforee, the arbitrators cannot refer a special case for the opinion of this Court on these questions.

(3) The objection raised on behalf of the respondents calls for interpretation of section 13(b) of the said Act. Section 13 enumerates the powers of an arbitrator and with regard to the making of a reference by way of a special case provides :-

13.'The arbitrators or umpire shall unless a different intention is expressed in the agreement, have power to- (b) state a special case for the opinion of the Court on any question of law involved, or state the award, wholly or in part, in the form of a special case of such question for the opinion of the Court;

(4) This sub-section empowers the arbitrator to state a special case 'on any question of law involved' but, as an alternative, the arbitrator may state the award itself in the from of a special case of such question for the opinion of the Court. The award is the decision of the arbitrator on the subject-matter of the reference or, in other words, on the merits of the controversy between the parties. It does not relate to procedural matters arising before the arbitrator. To put it differently questions of law involved before the arbitrator may be the subject-matter of a special case either without making an Award or by staling the Award. So far as procedure before the arbitrator is concerned, it may be provided either by agreement between the parties or it may be decided upon or settled by the arbitrator himself and so long as such procedure is not repugnant to the principles of natural justice, no limitations have been imposed by law upon the powers of an arbitrator to devise such procedure as he may consider proper for the carriage of proceedings pending before him. The said Act does not provide for such procedure and since the dispute is to be adjudicated by a forum of the parties' choice, it must follow that the Court will not have any say in the matter of procedure adopted by the arbitrator so long as such procedure is consistent with the principles of natural justice.

(5) Further, the opinion given by the Court upon a speical case stated by the arbitrator is merely of a consultative nature and is not binding upon him. All that the Arbitration Act requires is, as provided by sub-section (3) of section 14, that where the arbitrator or umpire states a special case under clause (b) of section 13, the Court, after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of, the award. The opinion is not binding upon the arbitrator. He may follow it or he may not. The only legal requirement is that the opinion of the Court is added to and forms part of the award. In this connection only a reference may be made to Union of India v. M/s Ram Sukh Das and Bros., and Union of India v. Messrs. South India Corporation Madras (Private) Ltd.

(6) The scope of section 13(b) has, thereforee, to be determined in the background of the consultative nature of the opinion of the Court and the fact that the arbitrator is the master of the procedure before him. As stated hereinbefore, the question of law in respect of which a special case is stated must be a question of law involved or the arbitrator may state the award wholly or in part in the form of a special case. It appears to us that such question of law must be in relation to the subject-matter of the reference or the merits of the controversy between the parties and not in relation to procedure.

(7) In the English Arbitration Act, 1899 (52 & 53 Vict. c. 49) provisions similar to section 13(b) appear in sections 7 and 19. The relevant part of section 7 of the said English Act gives power to the arbitrators 'to state an award as to the whole or part thereof in the form of a special case for the opinion of the Court' and section 19 empowers an arbitrator 'at any stage of the proceedings under a reference ........ to state in the form of a special case for the opinion of the Court any question of law arising in the course of the reference.' It is, thereforee, clear that so far as the English law was concerned, the question of law which could be the subject-matter of a special case could be in respect of proceedings before the arbitrator also. But the Indian Legislature did not use that wide expression. The first Indian statute which has been brought to our notice is the Indian Arbitration Act, 1899, section 10(b) whereof empowered the arbitrator to state a special case for the opinion of the Court on any question of law involved. This Act did not incorporate in any of its sections provisions similar to section 19 of the English Act. The intention of the Indian Legislature, thereforee, appeared to be that question of law arising in the course of the reference, or, in other words, questions of law relating to procedure before the arbitrator could not be stated by way of a special case for the opinion of the Court. This Act governed arbitration by agreement without the intervention of a Court. Then in 1908 provision was made in the Code of Civil Procedure in Schedule Ii which related to arbitration pursuant to orders of Court. Para 11 of the Schedule provided that in any such arbitration the arbitrator could, with the leave of the Court, state the award as to the whole or any part thereof in the form of a special case for the opinion of the Court. Para 11 also refers to the questions of law in relation to the reference made to the arbitrator and not in relation to the procedural matters before the arbitrator. Even Schedule Ii did not contain any provision corresponding to section 19 of the said English Act. The intention, thereforee, seems to be clear that the power given to the arbitrator in the English Act to refer a question of law for the opinion of the Court, which arose in the course of the reference, was not given to the arbitrator either under the said Indian Act or the said Second Schedule to the Code of Civil Procedure. The Arbitration Act, 1940, is a consolidating and amending Act relating to arbitration and contains provisions not only with regard to arbitrations without the intervention of a Court but also arbitrations with the intervention of a Court. Section 13(b) of the said Act, thereforee, included both the language of the said Indian Act of 1899 and the language of the said para 11 of Schedule Ii of the Code of Civil Procedure and still did not include the language used in section 19 of the said English Act.

(8) It, thereforee, appears to us that questions of law in relation to the procedure before the arbitrator cannot be referred to the Court as and by way of special case under section 13(b) and the qestions of law which can be referred must relate to the subject-matter of the reference, or, in other words, the merits of the controversy between the parties and may be referred either before the actual making of the award or stated in the form of a special case in the award.

(9) The questions referred to us appear to be questions which relate to the procedure before the arbitrators and not questions relating to the reference or the merits of the controversy between the parties. We, thereforee, decline to answer the aforesaid questions.

(10) By the said application prayer has also been made for extension of time for the making of the award by four months. To deal with this prayer and to dispose of the matter, the case will be now placed before a Single Judge on the original side on 2nd February, 1970.


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