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Ram NaraIn Gunga Bissen Vs. Liladhur Lowjee - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata
Decided On
Judge
Reported in(1906)ILR33Cal1237
AppellantRam NaraIn Gunga Bissen
RespondentLiladhur Lowjee
Cases ReferredCaerleon Tinplate Co. v. Hughes and Anr.
Excerpt:
arbitration act (ix of 1899) sections 4 and 5 - submission--contract by bought and sold notes--arbitration clause--award ex parte--rules of the bengal chamber of commerce. - .....is opposed by the person against whom the award has been given.2. liladhur lowjee, the opposite party, contracted to sell a certain quantity of corn sacks to the applicants. he did not deliver these goods. it is admitted that the contract, which was by bought and sold notes, was entered into and there is no question as to the parties being ad idem. what the opposite party says is that there was a contract, but that it had subsequently been cancelled. this is denied.3. now clause 12 of the contract contains a provision under which any dispute arising on or out of the contract should be referred to arbitration under the rules of the bengal chamber of commerce and that the decision of the chamber should be accepted as final and binding on both parties to the contract. that clause further.....
Judgment:

Woodroffe, J.

1. This is an application under the Indian Arbitration Act to file an award, which is opposed by the person against whom the award has been given.

2. Liladhur Lowjee, the opposite party, contracted to sell a certain quantity of corn sacks to the applicants. He did not deliver these goods. It is admitted that the contract, which was by bought and sold notes, was entered into and there is no question as to the parties being ad idem. What the opposite party says is that there was a contract, but that it had subsequently been cancelled. This is denied.

3. Now Clause 12 of the contract contains a provision under which any dispute arising on or out of the contract should be referred to arbitration under the rules of the Bengal Chamber of Commerce and that the decision of the Chamber should be accepted as final and binding on both parties to the contract. That clause further provides that the award may at the instance of either party and without any notice to the other of them be made a Rule of this Court.

4. The applicant therefore upon the dispute mentioned arising applied for arbitration in accordance with the provisions of Clause 12. The Registrar of the Chamber gave notice of the intended arbitration to the opposite party. In answer to that notice the latter (who I may observe is a broker of some years' standing) stated that Clause 12 did not bind him as it was not explained to him, when the contract was entered into, further that he was not willing to abide by the rules made by the Chamber referring to arbitration. He accordingly refused to have anything whatever to do with the arbitration, although invited to join. The arbitrators accordingly proceeded ex parte and made an award against him, which is now sought to be filed in Court in terms of the contract between the parties.

5. The filing of this award is opposed on three grounds. It is contended that there was no submission to arbitration within the meaning of Section 4 of the Arbitration Act. The argument in effect is that in order to constitute a submission under that section there must be an agreement on a single piece of paper signed by both of the parties to that agreement. In this case there are bought and sold notes signed by the broker. The case Caerleon Tinplate Co. v. Hughes and Anr. (1891) 60 L.J. Q.B. 645 is cited to establish that there has been no submission within the meaning of this section. I think that what that case decides has been accurately stated in the following terms in the annual practice in the notes to Section 27 of the English Arbitration Act:

The agreement must be signed by both parties or their authorised agents. A mere stipulation inserted by one party and not formally agreed to by the other does not constitute' a submission.

6. In that particular case only one of the notes contained the clause providing for arbitration, viz. the bought note. The sold note differed from the bought note in the important particular that this clause for arbitration was omitted.

7. In the present case there is no question, but that the bought and sold notes are identical, they are both. signed by Liladhur Lowjee & Co., brokers, Liladhur Lowjee & Co. were acting in this matter both as brokers and as undisclosed principals. The sold note therefore was signed by Liladhur Lowjee & Co. as brokers on behalf of themselves as principals in the transaction and the bought note was signed by Liladhur Lowjee & Co. acting as brokers and agents of the applicant.

8. There has therefore been clearly a submission within the meaning of Section 4 of the Indian Arbitration Act.

9. The second line of argument is that under Rule 6 of the Rules and Regulations of the Bengal Chamber of Commerce the opposite party was not allowed the requisite time to enable him to prepare and submit his case to the Registrar.

10. The answer of course to this is that he was, as I have stated, called upon to do so, but he refused to have anything whatever to do with the arbitration. It is idle to suggest that after he had refused to arbitrate at all, it was necessary for the Chamber to wait any longer before proceeding with the arbitration, when it is admitted before me that had any further notice been given nothing would have come of it.

11. The third ground has been that, assuming there was a submission, this Court should not, by allowing this application to file the award, in effect compel the opposite party to submit to an arbitration without his will. It is suggested that the remedy of the applicant is, not to enforce the award, but to sue Liladhur Lowjee for damages for breach of his contract to refer to arbitration. It has been contended that the Courts cannot decree specific performance of an agreement to arbitrate and therefore they cannot enforce an ex-parte award made against the other party not submitting to the arbitration, as such enforcement would in effect amount to the same thing as specific performance. Reference has been made to the case of Ex-parte Smith and Service and Nelson & Sons(1890) 25 Q.B.D. 545. This decision is not in point. This is not the case of an attempted enforcement of an agreement to arbitrate, but an application to enforce an award, which has already taken place in an arbitration held.

12. But it is further said that the award should not have taken place as there was no authority in the arbitrators to proceed ex parte. The answer to this argument is to be found in the provisions of Section 5 of the Indian Arbitration Act under which the power of the arbitrators cannot be revoked except by leave of the Court and in the Rules of the Chamber of Commerce, which have been incorporated in the contract by virtue of the agreement of the parties. Those Rules indicate that the trial is to take place before the arbitrator ordinarily on a case as stated by the parties and that in the event of failure or refusal of the parties to state such a case, the arbitrator is to proceed ex-parte as against the person failing or refusing to state the case under Section 6, clause for to attend, when allowed to do so under Section 6, Clause h.

13. In my opinion therefore the applicant has followed the correct course. He is entitled under his contract to refer the matter to arbitration. He and the arbitrators are entitled under the contract, Arbitration Act and Rules of the Chamber, to proceed in the absence of the opposite party, if that opposite party has had, as be has had here, due notice to attend and therefore he is entitled to file the award, when it is made under the provisions of the Indian Arbitration Act.

14. I therefore order that the award be filed in terms of the application and direct (hat the opposite party pay the costs of this application (which will be taxed according to the usual practice in such matters).


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