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1969 Supreme(SC) 362

SUPREME COURT OF INDIA
J.C. SHAH AND A.N. GROVER, JJ.
Union Textile Traders, Appellant
Versus
Shree Bhawani Cotton Mills Ltd., Respondent.
Civil Appeal No. 1658 of 1966, D/- 15-9-1969.
Advocates appeared
Mr. D. N. Mukherjee, Advocate, for Appellant; M/s. A. N. Sinha and B. P. Jha, Advocates, for Respondent.

Advocates:
A.N.SINHA, B.P.JHA, D.N.MUKHERJI

Headnote:

Indian Arbitration Act – Section 33, 5 and 11 - Arbitration Rules - Rule V (5) – Contract - Dispute - Arbitration - Appeal by special leave - Appellant did not happen to be a member of Indian Chamber of Commerce, whereas respondent was a member - Dispute having been referred to Chamber appellant wrote to Registrar of Tribunal of Arbitration of Chamber of Commerce to intimate names of persons constituting the court to enable appellant to ascertain whether they were independent and disinterested persons - Registrar sent a reply saying that names of arbitrators constituting court could not be disclosed to appellant as it was a non-member - Appellant s attorney again sought information regarding names and particulars of arbitrators but without success - Ultimately appellant filed an application under S. 33 of Act - Case of appellant was that arbitration agreement contained in contract was void and ineffective - Whether they were independent and disinterested persons – Held, Under its Rules Chamber is authorised to delegate its power to a smaller body - Appointment of arbitrator was thus complete in every sense in present case - It could not be said that it would become complete only when names of persons constituting court of arbitration were communicated - It appears that aforesaid Rule which has been framed by all these bodies of long standing and experience in field of business is based on elimination of all possibility or chance of a party trying to influence members of Arbitration Court before they enter upon or proceed with the reference - It is axiomatic that as soon as a party appears before them or arbitration proceedings commence names of arbitrators can no longer remain a secret and it is always open to a party to initiate proceedings on ground of bias or prejudicial interest even at that stage or after award is made - Appeal dismissed.

Judgment

GROVER, J.: This is an appeal by special leave from a judgment of the Calcutta High Court dismissing a petition filed under S. 33 of the Indian Arbitration Act, hereinafter called the Act.

2. A contract was entered into between appellant and the respondent on January 28, 1964 for sale of 200 bags of Cone yarn. The contract inter alia contained the following terms and conditions:

"(a) In case of any dispute arising out of this contract the matter in dispute shall be referred to the arbitration of the Indian Chamber of Commerce whose decision shall be binding on both the parties.

(b) The Court at Calcutta alone and no other court whatsoever shall have jurisdiction to entertain and try suits in respect of any claim or disputes arising out of or under this contract or in anyway relating to the same". Certain disputes arose between the parties relating to the supply of goods and the respondent demanded a payment of Rs. 25,658-90 as price of the goods alleged to have been supplied. The appellant maintained that the said goods were not according to the contract and had been rightly rejected.

3. The appellant did not happen to be a member of the Indian Chamber of Commerce, Calcutta, whereas the respondent was a member. The dispute having been referred to the Chamber the appellant wrote to the Registrar of the Tribunal of Arbitration of the Chamber of Commerce to intimate the names of the persons constituting the court to enable the appellant to ascertain whether they were independent and disinterested persons. The Registrar sent a reply saying that names of the arbitrators constituting the court could not be disclosed to the appellant as it was a non-member. Later on a list of the office-bearers and committee members was sent but according to the appellant the names of the arbitrators were not disclosed. In September 1964 the Registrar intimated that the meeting of the court of the arbitrators would be held on September 24, 1964. There was further correspondence. The appellant s attorney again sought information regarding the names and particulars of the arbitrators but without success. Ultimately the appellant filed an application under S. 33 of the Act. The case of the appellant was that the arbitration agreement contained in the contract was void and ineffective as clauses (a) and (b) reproduced above were in conflict with each other and that the Rules of the Tribunal of Arbitration of the Indian Chamber of Commerce were illegal and void. The High Court repelled all the contentions raised before it and dismissed the application.

4. The main emphasis before us has been laid by learned counsel for the appellant on R. III of the Rules of Arbitration of the Indian Chamber of Commerce which, according to him, comes into conflict with the provisions of the Act. That Rule provides that the Tribunal shall consist of such persons as may be selected by the Committee of the Chamber from time to time. Sub-Rule (3) reads:

"The Committee may, at any time if they think proper so to do, add to the said list the names of other persons qualified as aforesaid. A list of the members of the Tribunal complete for the time being shall be kept by the Registrar, and shall always be open for inspection by members on application and at the discretion of the Registrar, also by persons other than members".

It is urged that the non-disclosure of the names of the arbitrators by the Registrar is violative not only of the rules of natural justice but also infringes the provisions of the Act. Before the High Court and before us reliance has been placed on an unreported judgment of the Calcutta High Court in Matter No. 95 of 1963, D/- 10-4-1964 (Cal) Suraj Ratan Binany v. Hindustan Motors Ltd. In that case a similar contention had been raised and it was held that if the names of the arbitrators were not known to the parties until the award was filed the parties would not be in a position to know whether the arbitrators had misconducted themselves entailing removal






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