Judgement

RAY, J.:- These two appeals are by special leave against the judgment dated 17 October, 1968 of the High Court at Bombay determining under Section 33 of the Arbitration Act that the umpire rightly entered upon the reference and further extending the time till 31 December 1968 for making an award thereof by the umpire.

2. Two questions arise for consideration in these appeals. First whether there can be any valid appointment of umpire by arbitrators without obtaining consent of the appointee to be an umpire. Second, on the construction of the arbitration agreement in the present case was the operation of paragraph 4 of Schedule I of the Arbitration Act excluded with the result that the umpire could enter upon the reference only in the event of a difference arising between the arbitrators.

3. On 26 April, 1967 there was an arbitration agreement between the partnership firm of Indian Engineering Company and Keshavsinh Dwarkadas Kapadia. Kapadia had appointed M/s. Chetan Trading Company as the sole selling agent of Kapadia s several products including aluminium and copper wires by an agreement dated 16 September, 1965. Chetan Trading Company in their turn appointed Indian Engineering Company as their sole selling agent in respect of aluminum and copper wires. Chetan Trading Company terminated their agreement with Indian Engineering Company. Kapadia also terminated the sole selling agency with Chetan Trading Company. Indian Engineering Company contended that on the termination of the sole selling agency between themselves and Chetan Trading Company. Indian Engineering Company became the sole selling agent of Kapadia in terms of the agreement dated 16 September, 1965. Indian Engineering Company claimed damages against Kapadia for breach of the agreement. Kapadia claimed damages and moneys from Indian Engineering Company. Disputes arose between the parties. These disputes were referred to arbitration in accordance with the agreement dated 26 April, 1967.

There was a similar arbitration agreement between Chetan Trading Company and Indian Engineering Company on 5 June, 1967 in respect of their disputes and claims against each other. The arbitration agreement and the arbitrators were identical in both the cases.

4. Clauses 1, 2, 5 and 6 of the arbitration agreement which are relevant for the purposes of the present appeals are as follows :

Clause (1): All the disputes and differences arising out of or in relation to the said Sole Selling Agency Agreement be and they are hereby referred to the arbitration of the said Shri H. G. Advani and Shri J. M. Gandhi.

Clause (2) : That the arbitration shall be governed by the provisions of the Arbitration Act 1940.

Clause (5) : The arbitrators shall make and publish their award within four months from the date of their entering upon the reference and they are hereby authorised to extend the said time from time to time as may be required with the previous written consent of both the parties hereto.

Clause (6) : The said arbitrators shall before proceeding with the arbitration appoint an umpire and in the event of any difference arising between them, they shall refer the matter to the umpire for his decision and award.

5. The arbitrators Messrs. Advani and Gandhi held their first meeting on 12 September, 1967. At the said meeting before entering upon the reference the arbitrators appointed an umpire in the following terms :

"Mr. Porus Mehta failing him Mr. Murzhan Mistry appointed umpire."

6. On 11 January, 1968 the time laid down by clause (5) of the agreement for making the award expired. On 14 January, 1968 the respondents wrote to the appellants to obtain the necessary extension of time for making the award. The appellants did not comply with the request and on 6 March, 1968 wrote to the arbitrators that Mr. Advani one of the arbitrators would be biased in favour of the respondents. Thereafter, the respondents through their solicitors called upon the arbitrators to refer the matter to the umpire a