1. In this case, I mush regret that I cannot see my way to give effect to this motion. The circumstances arise in my opinion entirely from the conduct of the defendants in the suit, who appear to reconcile their conduct with the ordinary principles of fair dealing somewhat more readily than I am able to do myself.
2. The matter stands thus:
These defendants were sued before me for damages for loss of a certain quantity of tea carried by them. The question of the amount of damages was postponed until questions of liability, which were somewhat complicated, should have been determined. On my giving judgment against these defendants on the question of liability, I was informed that the amount of damages was likely to be either agreed or referred. The next step, after I had given some time to the parties, was that they tame to an agreement that Mr. Lloyd should arbitrate, and it was intended that a reference under Rule 1 of the Second Schedule should be made to him. That matter fell through. In the end the course adopted, which I very mush regret, was that I made an order that the decree should not be drawn up until further order and directed the parties to mention the amount of damages fixed by the arbitrator. My intention was that informally those people should go before a commercial gentleman of their choice, if they could not agree on the amount of the damages, get the amount fixed by him, and come before me with the amount fixed by the arbitrator, and have the amount inserted in the decree. In that position the defendants would be at liberty to contest the question of liability on appeal. The amount of damages would really be agreed independently. What has happened is that thereafter the parties by letter of the 20th September 1919 submitted the question of the amount of damages to E.J. Bvers of Messrs. J. 'Thomas & Co. They put in various claims and he has decided that the defendants are liable to pay so much, mentioning the amount naturally enough in rupees. The defendants object to that decision of the arbitrator, as I understand, on the ground that he has adopted a wrong rate of exchange in awarding the damages accruing to the plaintiff in London, It matters nothing to me what their objection to the award may be. They have no right to object to his award so long as the arbitrator has been fair and honest. They have not taken steps to ask him to take the opinion of the Court before giving his award. What they do now is to say the amount cannot be inserted in the decree by consent, that there is no valid reference and that the matter of the amount of damages must be determined by the Court. I think they are right. Their law is better than the principles of their conduct. It is quite clear that this is not in substance, any more than in form, a reference under Rule 1 of the Second Schedule. The mere fact that no decree was drawn up shows this, and there never was any legal authority to refer the question in that form.
3. The plaintiff asks me to say that in spite of this fact and in spite of Section 89, Civil Procedure Code, I san give effect to this award under Order XXIII, Rule 3, which deals with the recording of settlements and adjustments in a suit.
4. In my opinion, the terms of Section 89 are such that it is not possible to hold that an informal reference in a pending suit can be given effect to in that way. The words of Section 89, upon which the matter depends, are these; 'Save in so far as is otherwise provided by the Indian Arbitration Act, 1899, or by any other law for the time being in force.' The question is whether the last words let in Order XXIII, Rule 3. In my opinion they do not. The words 'Any other law for the time being in force' refer, to my mind, to amendments of, or substitutions for, the Arbitration Act, or other piece of legislation on that subject-matter. The decision in Shavahsha Dinsha Davar v. Tyab Haji Ayub 37 Ind. Cas. 149 : 40 B. 386 at p. 387 : 18 Bom. L.R. 559 is, in my judgment, right, and I propose to follow it. I cannot find, except in some Bombay cases before Section 89 was passed or in cases where observations have been obiter, that there is any convincing authority contrary to the decision of Mr. Justice Macleod.
5. That being so, I cannot think that an informal reference in a suit can be given effect under the Indian Arbitration Act, even although there is a written submission, vie., the letter of the 20th September.
6. The defendants were adjudged by me to be responsible for damages, but the arbitrator does not find or decree that any damages were payable. He fixed the amount and that is all. Liability on the part of the defendants is a matter they were quite entitled to question in a Court of Appeal.
7. The result is, that the proceedings which, have taken place before the arbitrator name to nothing, and I shall proceed to continue the trial of the suit, as if the whole matter was to be dealt with in the ordinary course,
8. It is asked that the defendants should pay the costs of the present application. I cannot do that, as it has failed. I direct that each party do pay his own costs. My reason is that the fault is partly my own. In spite of acquiescence or consent I should have provided against the contingency of a party not standing by his promise to abide by what the referee should think right.