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Pushraj Puranmal Vs. Clive Mills Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberAward Case No. 26 of 1959
Judge
Reported inAIR1960Cal180
ActsArbitration Act, 1940 - Sections 14(2) and 30
AppellantPushraj Puranmal
RespondentClive Mills Co. Ltd.
DispositionApplication dismissed
Cases ReferredUttam Chand Saligram v. Mahmood Jewa Mamooji.
Excerpt:
- .....for fresh application for further awards determining damages or compensation. rule 30 of such rules of arbitration provides inter alia :'xxx. whenever an award directs that a certain act or thing shall be done by one party to the reference, e.g., delivering or taking (with or without allowance) delivery of goods and such party fails to comply with the award, the party in whose favour the award is made may make a fresh application for a further award determining the amount of damages or compensation payable by reason of such failure, and the registrar on receipt of such application, shall proceed to constitute a new court, which may or may not consist of the same or or one or more of the members constituting the court who made the first award, and the new court shall proceed under.....
Judgment:
ORDER

P.B. Mukharji, J.

1. This is an application by Pushraj Puranmal to set aside award No. 575 of 1958 in Case No. 438 of 1958, dated 21-8-1958 made by the Bengal Chamber of Commerce and Industry.

2. The only ground on which the award has been challenged before me appears in paragraph 29 of the petition. Briefly that objection is that this award proceeds on the basis of two previous awards which have not been filed and on which court's pronouncement has not been obtained. It is then said that the said two previous awards are bad but because those awards had not been filed in court the petitioner could not have them set aside by the court. Therefore, it is contended first that the arbitrators did not have any jurisdiction to decide uponthe basis of the previous awards and secondly that to allow judgment to be pronounced on this present award in dispute will virtually enable the respondent to enforce unfiled awards upon which no judgment of the court has been pronounced. It is also pleaded in that paragraph that the petitioners will in future take steps to have these two previous awards set aside as soon as the same would be filed in Court.Finally it is contended that once an award is made the whole arbitration agreement merges in the award and therefore no fresh reference on the same arbitration agreement and no fresh award thereupon can any longer be made.

3. Before discussing these arguments and deciding the points of objection, I shall briefly state the few relevant facts leading to this dispute.

4. This was a contract by which the petitioner agreed to sell and deliver to the respondent 500 bales of jute cuttings on terms and conditions of the written contract, being Contract No. 37 dated 4-6-1957. It contains the usual arbitration clause. Clause 14 of this contract provides as follows :

'All matters, questions, disputes, differences, and/or claims arising out of and/or concerning and/ or in connection with and/or in consequence of or relating to this contract including matters relating to insurance and demurrage whether or not the obligations of either or both parties under this contract be subsisting at the time of such dispute and whether or not this contract has been terminated or purported to be terminated or completed shall bereferred to the arbitration of the Bengal Chamber of Commerce and Industry under the Rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted and any Award made by the said Tribunal under this clause shall be final, binding and conclusive on the parties.'

5. What happened in this case was that there were two prior references to arbitration by the respondents between the same parties on this contract but the two previous awards on these references did not determine the amount of money liable to be paid by the petitioner to the respondent. These two previous awards only decided the principle whether the goods offered were fair tender which should be accepted at contract rate and what should be the percentage of allowance for dust and damaged fibres. A glance at the two awards will make that clear, In Award No. 535 of 1957 in case No. 527 of 1957 dated 28-8-1957 between the same parties all that the arbitrators decided and awarded were as follows :

'1. That the cuttings under item (b) above are a fair tender under the contract, and that the buyers shall accept and pay for these 156 bales at the contract rate without any allowance;

2. That the sellers shall make to the buyers an allowance of 12 1/2 per cent (twelve and half per cent) for dust and damaged fibre on 27,127 lbs. Cuttings. -- item (a) above -- subject to which allowance the buyers shall accept and pay for these 94 bales at the contract rate;

3. That the cost of the arbitration which we fix at Rs. 404/- shall be paid as follows :

(a) The buyers shall pay Rs. 201-0-0;

(b) The sellers shall pay to the buyers Rs. 203-0-0 which amounts are to be recovered by the Tribunal from the deposit account of the buyers.'

6. Award No. 5-39 of 1957 in Case No. 550 of 1957 dated 30-8-1957 between the same parties under the same contract decided and awarded as follows :

'1. That the sellers shall make to the buyers an allowance of 3 per cent (three percent) for damaged fibre on 49,628 lbs. cuttings in dispute.subject to which allowance the buyers shall accept and pay for the cuttings at the contract rate;

2. That the seller shall pay to the buyers the costs of this arbitration which we fix at Rs. 371/-and which are to be recovered by the Tribunal from the deposit account of the buyers.'

7. What happened thereafter was that the buyers failed to get their relief or payment under and on the principle fixed by these two awards. Under Award No. 535 of 1957 the respondents themselves calculated and made out their Bill No. 1061 dated 30-8-1957 for Rs. 1,537/- and under Award No. 539 of 1957 they similarly made out their Bill No. 1062 dated 3-9-1957 for Rs. 799.08 np. on their calculation. Those bills were refused by the petitioner. Thereafter the respondent buyers referred the matter again to the Arbitrators of the Bengal Chamber of Commerce to decide and determine the actual amounts payable to them by the petitioners. Upon that reference, the Tribunal of Arbitration off the Bengal Chamber of Commerce made the award in dispute dated 21-8-1958 being Award No. 575 of 1958 in Case No. 438 of 1958 inter alia deciding and awarding :

'1. That Pushraj Puranmall shall pay to Clive Mills. Co. Ltd., in full settlement of their claim herein, the sum of Rs. 2,336.06 np. (Rupees two thousand three hundred and thirty six and naye paise six) together with interest thereon at the rate of 5 1/2 per annum from 13-9-1957 until the date of this award.

2. That Pushraj Puranmull shall pay to Clive Mills Co. Ltd., the costs of this arbitration which we fix at Rs. 260.50 np. and which are to be recovered by the Tribunal from the deposit account of the latter.'

8. To complete the account of relevant facts I shall only refer to the recital of this award where the Arbitrators recite the Fact of the two previous awards in the manner following :

'We, the undersigned, having been duly constituted by the Registrar, Tribunal of Arbitration. Bengal Chamber of Commerce and Industry, as the Court to adjudicate on a dispute between Clive Mills Co. Ltd., buyers, and Pushraj Puranmull, sellers, regarding a claim made by the former on the latter in respect of 219 bales N. C. Cuttings arising out of Bengal Chamber of Commerce and Industry awards Nos. 535 and 539 of 1957 (valued at Rs. 25,078.06) under contract No. 37 dated 4-6-1957, have taken upon ourselves the duties of arbitrators, read and carefully considered the papers in the case, heard the parties and hereby decide and award as follows :'

Then follows the award which I have quoted above.

9. The plain stipulation is to refer to arbitration of the Bengal Chamber of Commerce and Industry under the specific Rules of its Tribunal of Arbitration. These Rules expressly provide for fresh application for further awards determining damages or compensation. Rule 30 of such Rules of Arbitration provides inter alia :

'XXX. Whenever an award directs that a certain act or thing shall be done by one party to the reference, e.g., delivering or taking (with or without allowance) delivery of goods and such party fails to comply with the award, the party in whose favour the award is made may make a fresh application for a further award determining the amount of damages or compensation payable by reason of such failure, and the Registrar on receipt of such application, shall proceed to constitute a new Court, which may or may not consist of the same or or one or more of the members constituting the Court who made the first award, and the new Court shall proceed under these rules to arbitrate on the saidapplication and the award thereon may be filed separately or together with the original award.'

10. It is therefore, plain on this Rule that the two other awards Nos. 535 and 539 of 1957 not having determined the amount of money payable but having determined only (1) that the cuttings are fair tender and (2) that a certain percentage allowance to be made for dust and damaged fibres, it was competent under the express contract for arbitration in this case under Rule XXX for the Respondents 'to make a fresh application for a further award determining the amount of damages or compensation payable.'

11. The fact that the two other awards Nos. 535 and 539 were not filed in Court and the fact that no judgment upon them has been obtained by the respondent are no grounds whatever for setting aside this present award. If those two other awards were bad on any ground, then both under Section 14(2) of the Arbitration Act and under Rule XXVIII of the Rules of the Tribunal of Arbitration, the petitioner himself could have forced the filing of the award in order to have those awards set aside. The petitioner was not so helpless as he alleges that because these two awards were not filed in Court, therefore he could not take steps to set aside the award. Rule 28 of the Rules of the Tribunal of Arbitration expressly provides :

'XXVIII. The Court shall at the request of any party to the proceedings or of any person claiming under such party or, if so directed by the High Court at Calcutta and upon payment of the fees and charges due in respect of the arbitration and award, and of the costs and charges on filing the award, cause the award or a signed copy of it together with any depositions or documents, which may have been taken and proved before it, to be filed in the said High Court.'

Therefore, this Rule and Section 14(2) of the Arbitration Act clearly provide that the Arbitrators were bound to file the award if the petitioner who was a party to the arbitration proceeding had requested the Court of Arbitrators to do so. The petitioner, of course, never did make such a request.

12. There appears to be a tacit assumption in the argument advanced on behalf of the petitioner that an unfiled award is for all purposes a nullity. That, in my opinion, is quite an erroneous assumption. No section of the Arbitration Act says that an unfiled Award is a nullity. Section 14(2) of the Ar-bitration Act compels the Arbitrators to file the Award 'at the request of any party to the Arbitration agreement.' If the agreement for arbitration itself stipulates that the award shall be binding on the parties, then the award, subject of course to the rules of exception to the award recognised by the arbitration agreement or for grounds permitted by the Arbitration Act, remains binding as part of the agreed contract even though it is not filed. Such agreement is present in the facts of this case. Under Rule XVIX of the Rules of the Tribunal of Arbitration in this case it is expressly provided :

'XXIX. The parties shall in all things abide by and obey the award, which shall be binding on the parries and their respective representatives notwithstanding the death of anv party before or after the making of the award, and such death shall not operate as a revocation of the submission.'

The awards made, therefore, remain 'binding on the parties' and an express Rule provides that the parties shall 'obey the award which shall be binding on the parties'. No one for a moment disputes that this Court in a proper case can and has jurisdiction to set aside an award. But until such awards are set aside, they remain binding on the parries bythe express Rules of Arbitration and the express agreement entered into between the parties in such a case. The fact that Schedule I, paragraph 7 of the Arbitration Act provides for almost a similar Rule making the award binding on the parties does not in the least in my view detract from the correctness of this proposition but rather supports, the conclusion that an award cannot generally be treated as a nullity merely on the ground that it is not filed.

13. In this case there was no point in filing the two previous awards because they were not executable as such being merely declaratory awards declaring fair tender and the rate of allowance without determining the amount payable.

14. The next point of objection that a further award on the same arbitration agreement cannot be made, is in my opinion, concluded against the petitioner by the decision of the House of Lords in Chandanmull v. Donald Campbell and Co.. reported in 23 Cal WN 707 (FN). in extenso and appearing as a footnote on the judgment of Rankin, J. in Uttam Chand Saligram v. Mahmood Jewa Mamooji. 23 Cal WN 704: (AIR 1920 Cal 143). At p. 715, footnote of 23 Cal WN, Lord Sumner observes :

'The question how much Mr. Chandanmull should pay was not submitted to Mr. Ritchie; as is usual in trade he was only asked to fix default and the market value as the basis, if default, of a calculation for damages. The clerks were left to do the rest. Mr. Ritehie's award was valid, but in view of the Appellant's attitute towards it a second dispute arose and a second award was needed to resolve the first. That second award of Mr. Nevill was duly made and I think the Appeal fails.'

15. If I may say so, these observations put and decide succinctly the very point which arises in the present case before me. Here also the first two awards did not decide how much the petitioner should pay to the respondent. Those two awards only decided whether the cuttings were fair tender and what would be the rate of allowance.

16. The language of the Arbitration clause as contained in Condition 14 of the contract which I have quoted above clearly covers fresh arbitration of this nature.

17. An argument was advanced on an assumed theory that once an arbitration clause in a contract has been invoked on a particular point of dispute and an award obtained thereupon, no further reference under that arbitration clause is possible on any other point of dispute no,t covered by the award, on the principle that the arbitration agreement merges in the award. Neither the theory nor the principle in my opinion is universally true in an un-qualified form. The question in every case depends on first the ambit and scone of the arbitration clause and the special rules of arbitration incorporated in the arbitration clause and secondly on the nature of the dispute, reference and the award. Bv both these tests on the facts of this case the present third Award and the third reference on the same arbitration clause are unassailable. It will he relevant and perti-nent to quote the following observations of Earl Loreburn in the House of Lords decision as reported in 23 Cal WN 707 at page 712 footnote, with which I respectfully agree :

'The second arbitrator decided that the amount was due, and he did so on the ground that the first award was right and that the first award had decided liability, I agree with him that the first award had decided liability, or rather had decided default; and the second arbitrator was entitled to make a definite award and to put in on that ground.

Sir John Simon pointed out that danger of allowing arbitrations upon arbitrations, and so ad in-finitum, each arbitration being upon the validity of the previous award. The answer to this ingenious but unconvincing argument is that when an award assumes a shape which makes it available for a judgment enforcing it in a Court of law, the process of infinitesimal repetition is at once arrested because there is nothing left for an arbitrator when the Court of law becomes entitled to give effect to the award. But when there is a doubt upon that subject, this submission is wide enough to entitle the parties to treat not the construction of the earlier award, but the disputable right to have the liability placed upon an indisputable footing by the ascertainment of a sum certain, and by the ascertainment of a duty to pay as a different arbitration, always provided that! there is a dispute as to the liability to pay. Each case stands upon its own legs. This is a case in which the buyers were right as to that liability and dury to pay, but there was room For doubt or at least for technical difficulties of a formidable character being raised, and there was danger of a protracted litigation if the doubt were not set at rest.'

18. If the authority is there in an arbitration agreement incorporating special rules of arbitration enabling the arbitrator to make more than one award on the same arbitration contract although on different points of disputes, then that authority will not be regarded as repugnant to any jurisprudence of the law of arbiration. The learned Editors of the 16th Edition of Russell's Arbitration (1957) state the law briefly, and if I may say so correctly, at page 225 in the following terms :

'An arbitrator can mate only one final award, in the absence of some special authority to make more than one. Unless, however, the arbitration agreement expresses a contrary intention, he may make an interim award, and an interim award may well be final as to some of the claims referred; although it is perhaps more usual for such awards merely to determine certain of the issues arising upon the claim -- for instance, to determine the issue of liability while leaving questions of amount to be dealt with later.'

19. One arbitration agreement therefore can produce one or more awards and the law of arbitration, as I understand it, does not nurse any dogma to say that it can never do so under any circumstances because of some fancied universal doctrine of legal merger of the arbitration agreement in the award. The records of arbitration are replete with numerous instances where under particular arbitration agreements or special rules of arbitration the same arbitration agreement has given rise to interim awards supplemental awards and successive awards. See Russell's Arbitration 16th Edn. pages 230 and 289 Whether in a particular case the arbitration agreement can do so or not will depend primarily on the connotation and denotation of the arbitration agreement itself and secondarily on the nature of the dispute referred and the terms and character of the award thereupon. This is however very far from saving that the same point can be decided over and over again by different awards, which of course cannot be done.

20. For these reasons I am unable to accept the argument that the arbitration agreement in this case merged in the previous awards or was extinguished thereby.

21. The application therefore must fail and is dismissed with costs.


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