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Burla Ranga Reddi Vs. Kalapalli Sithaya - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai
Decided On
Judge
Reported in(1883)ILR6Mad368
AppellantBurla Ranga Reddi
RespondentKalapalli Sithaya
Cases ReferredThe Coringa Oil Company (Limited) v. Koegler I.L.R.
Excerpt:
civil procedure code, sections 523, 524 - contract act, section 28, exceptions 1, 2. - - it seems to me that the grounds enumerated in section 521 of act x of 1877 suggest the requisites of a valid agreement as well as of a valid award......registered as a suit. it was thereupon subject to the provisions prescribed with reference to a suit so filed (section 524) so far as they might be consistent with the agreement filed, and it is said that the agreement in this case excluded all interference of a court of justice after the reference to arbitration. but, supposing the arbitrator arrived at a decision not warranted by the matters referred, or left out some material matter which had been referred, it would be too much to say that the party aggrieved had no remedy. the very filing of the agreement in court for the purpose of reference is a submission to the procedure in accordance with which it is filed, and promotes the jurisdiction of the court under the arbitration chapter. the words 'so far as they may be consistent.....
Judgment:

Innes, J.

1. The parties agreed to accept the decision of the arbitrators without any appeal whatever. On the ground that in disposing of Civil Miscellaneous Petition No. 50 of 1881 we overlooked this portion of the agreement and the objection to the jurisdiction of the Judge founded upon it, a Review is now sought of our order passed on 11th November 1881.

2. The date of the karar was 30th March 1880. No suit was then pending. On the 20th July the petition was put into Court under Section 523 of the Civil Procedure Code to be numbered and registered as a suit. It was thereupon subject to the provisions prescribed with reference to a suit so filed (Section 524) so far as they might be consistent with the agreement filed, and it is said that the agreement in this case excluded all interference of a Court of Justice after the reference to arbitration. But, supposing the arbitrator arrived at a decision not warranted by the matters referred, or left out some material matter which had been referred, it would be too much to say that the party aggrieved had no remedy. The very filing of the agreement in Court for the purpose of reference is a submission to the procedure in accordance with which it is filed, and promotes the jurisdiction of the Court under the arbitration chapter. The words 'so far as they may be consistent with the agreement filed' appear to refer to the provisions of the agreement as to the number of arbitrators or other matters for which the agreement may lawfully provide. It appears to me that an agreement to exclude all applications to the Court to examine and, if necessary, set aside or alter the award would be contrary to the object with which the agreement would be filed--the object of giving the Court a control over the proceedings taken by the arbitrator, and the provision in Section 524 that 'the foregoing provisions of this chapter, so far as they are consistent with the agreement so filed, shall be applicable to all proceedings under an order of reference made by the Court under Section 523' cannot have been intended to recognize such an agreement. I think it is within the mischief of Section 28* of the Contract Act, and in this view I am borne out by expressions in the judgment of GARTH, C.J., in The Coringa Oil Company (Limited) v. Koegler I.L.R. 1 Cal. 466.

3. When once a matter has been referred to arbitration through a Court, the arbitration is not complete until the Court has exercised the control over the proceedings of the arbitrator provided by law in that behalf, and on this ground also I think that the agreement that there shall be no appeal, if it be lawful under Section 28 of the Contract Act, would still not stand in the way of the Court acting on the provisions prescribed for examining the proceedings of the arbitrators and passing orders as it did.

4. I would dismiss the petition for Review with costs.

Muttusami Ayyar, J.

5. I also think that the agreement relied upon in support of this application does not oust the jurisdiction of the Civil Courts. It seems to me that the grounds enumerated in Section 521 of Act X of 1877 suggest the requisites of a valid agreement as well as of a valid award. Although this section applies to awards passed upon agreements made with reference to a suit pending decision, it is extended by Section 526* to awards passed without a suit and without the intervention of a Court of Justice. This being so, I do not see any difference in principle between the awards mentioned in Sections 524 and 525. The words in Section 524, 'so far as they are consistent with any agreement so filed,' relate to matters of procedure already provided for, and are not, I think, intended to dispense with the prerequisites of a valid award. Neither an agreement not to appeal nor an agreement to postpone the cause of action until there is an award forbids all resort to a Court of Justice, and 1 am therefore of opinion that the exceptions 1 and 2 to Section 28 of the Contract Act do not legalize an agreement not to object at all to the validity of the award on the grounds mentioned in Section 521 of Act X of 1877.

* Agreement in restraint of legal proceedings void.

[Section 28: Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent.

Saving of contract to refer to arbitration dispute that my arise.

Exception 1.--This section shall not render illegal a contract, by which two or more persons agree that any dispute, which may arise between them in respect of any subject or class of subjects, shall be referred to arbitration and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred.

Suit barred by such contracts.

When such a contract has been made a suit may be brought for its specific performance; and if a suit, other than for such specific performance, or for the recovery of the amount so awarded, is brought by one party to such contract against any other such party, in respect


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