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1922 Supreme(SC) 48
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT HALDANE, VISCOUNT CAVE, AND LORD PARMOOR.
E. D. SASSOON AND COMPANY - Appellant
Versus
RAMDUTT RAMKISSEN DAS - Respondents
On Appeal from the High Court at Calcutta.
Decided On : July 24, 1922.
Solicitors for the appellants :Sandersons & Orr Dignams. Solicitors for respondent firm: W. W. Box & Co.
A specific arbitration agreement providing for a multi-member tribunal and appointment by a trade association chairman constitutes a "different intention" that excludes the statutory appointment of a sole arbitrator under Section 9(b) of the Indian Arbitration Act. Awards made without jurisdiction remain challengeable after execution.
Headnote:(A) Indian Arbitration Act - Section 9(b) - Appointment of sole arbitrator - "Different intention" - Where a contract incorporates by-laws providing that a chairman of a trade association shall appoint an arbitrator upon failure of a party to do so, and requires two arbitrators and an umpire from the trade with a right of appeal to a committee, such a scheme constitutes a "different intention" excluding the operation of Section 9(b) of the Act.
(B) Indian Arbitration Act - Section 15 - Execution of award - An award enforced by execution is not a decree of the court but is only enforceable as one; therefore, a suit to declare an award void on the ground that the arbitrator acted without jurisdiction is maintainable despite execution.
(C) Specific Relief Act, 1877 - Sections 42 and 56 - Suit for declaration and injunction - A suit seeking a declaration that an award is void, coupled with an injunction and repayment of levied sums, is maintainable.
Facts of the case:
Parties entered into contracts for the sale of goods with an arbitration clause referring to the rules and by-laws of a trade association. The by-laws stipulated that if a party failed to appoint an arbitrator, the chairman of the association would make the appointment. Following the withdrawal of appointed arbitrators, one party appointed a sole arbitrator under the statutory provisions of the arbitration act. The sole arbitrator issued awards which were filed and executed. The other party subsequently brought a suit for a declaration that the awards were void and for the refund of the executed amount.
Findings of Court:
The appointment of the sole arbitrator was illegal as the specific arbitration mechanism agreed upon in the contract and by-laws was inconsistent with the statutory default of appointing a single arbitrator. The court found that the parties had agreed to submit their disputes to a domestic tribunal of two trade-experienced arbitrators and an umpire.
Issues: Whether the arbitration agreement expressed a "different intention" from Section 9(b) of the Indian Arbitration Act, and whether the suit was maintainable after the award had been executed.
Ratio Decidendi: The court held that a detailed arbitration procedure specified in a contract, including the appointment of arbitrators by a trade association chairman and a multi-member tribunal structure, overrides the statutory provision for a sole arbitrator under Section 9(b) of the Indian Arbitration Act. Furthermore, an award made without jurisdiction can be challenged in a suit for declaration even after execution under Section 15 of the Act.
Result: Appeal dismissed.
Legal Category Hierarchy
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practice and procedure
-
arbitration
- appointment of arbitrators
- jurisdiction of arbitrator
- enforcement of awards
-
specific relief
- declaratory relief
- injunctions
-
arbitration
Judgement
Appeal (No. 78 of 1921) from a judgment and decree of the High Court in its appellate jurisdiction (December 13, 1920) reversing a decree of that Court in its original civil jurisdiction (March 15, 1920).
The respondent firm brought a suit in the High Court against the appellant firm claiming (a) a declaration that eleven awards of an arbitrator dated September 28, 1916, purporting to be made under eleven contracts for the sale of jute by the respondent firm to the appellants were void; (b an injunction restraining the appellants from withdrawing the sum of Rs.68,574, or any part thereof, from the sheriff ; (c) a declaration that the plaintiffs were entitled to a refund of the said sum. There was also a claim to damages, which was given up.
The circumstances in which the suit was brought fully appear from the judgment of the Judicial Committee.
The suit was tried by Ghose J. and was dismissed. On appeal that decision was reversed, the learned judges (Sanderson C.J. and Richardson J.) being of opinion that the appellants were not entitled to proceed under s. 9 (b) of the Indian Arbitration Act, since the submission contained in the contracts showed an intention differing from that section.
A decree was made declaring the awards to be void and inoperative, and it was further ordered by the consent of the- parties that the respondent firm should pay to the appellants Rs.68,574 received by them from the sheriff, the appellants undertaking to return the said sum if the awards were held by the Judicial Committee to be valid.
1922. June 21, 22. Sir John Simon K.C. and S. Hyam for the appellants. It was too late to contend that the awards were invalid since they had been filed in Court, thereby acquiring the character of decrees, and had been executed under s. 15. The matter thereafter was in the hands of the Court. Secondly, the letters in July, 1916, amounted to an agreement, or raised an estoppel, that the associations by-law 15 was not to apply, but that the procedure should be according to Act. Thirdly, by-law 15 applies only where a party has wholly failed to appoint an arbitrator, not where an arbitrator has been appointed but has died or has withdrawn. Fourthly, the suit was not maintainable, since by s. 56 (a), (b), of the Specific Relief Act, 1877, no injunction could be asked for, the suit became therefore one simply for declarations and was therefore invalid under s. 42 of that Act. The awards were not out of time, since the period allowed runs only from the time when the arbitrators enter upon the reference.
Dunne K.C. and J. K. Roy for the respondent firm. The terms of the submission in the contracts, especially having regard to by-law 15 of the association, show a " different-intention " from s. 9 of the Act, consequently the section is by its terms inapplicable ; the appointment of the sole arbitrator was therefore wholly inoperative. The appellants should have followed the procedure provided by by-law
15. Under s. 15 of the Act an award filed under s. 11 is not a decree, but only enforceable as a decree. The proceeds of the execution are no longer in the hands of the sheriff, but were dealt with by consent. The suit was maintainable, although no steps had been taken under the Act to set aside the awards, because the awards were not merely irregular, but made without jurisdiction Oppenheim & Co. v. Mahomed Haneef. (( 1922) L. R, 49 I. A. 174, 180.) The contention as to the letters in July,
Law Rep. 49 Ind. App. 366 ( 1921- 1922)
E. D. Sassoon and Company V. Ramdutt Ramkissen Das 170
1916, was not advanced in the Courts below ; in any case those letters do not amount to an agreement or give rise to any estoppel. Having regard to the relief prayed s. 42 of the Specific Relief Act did not preclude the suit being maintained.
S. Hyams replied.
July 20. The judgment of their Lordships was delivered by
VISCOUNT CAVE. This is an appeal from a decree of the High Court of Judicature at Fort William in Bengal, in its ci
