If an appellate decision in arbitration is a nullity, the original award is not merged and remains valid. While Section 16 of the Arbitration Act, 1940, does not allow remitting a nullity, parties retain their right to a new, effective hearing.

Judgement

Appeal (No. 14 of 1943) from an order of the High Court made in the exercise of its appellate jurisdiction (March 20, 1942), which varied an order of the same court in its original jurisdiction (November 25, 1941).

The following facts are taken from the judgment of the Judicial Committee In September, 1940, a dispute arose between the parties to this appeal as a result of transactions in which they had been engaged in the cotton markets of Bombay, Liverpool and New York. An agreement between the parties provided for arbitration under the by-laws of the East India Cotton Association, Ld. Two arbitrators were appointed in accordance with those by-laws, and there was now no dispute about the validity of their appointment. On March 19, 1941, the arbitrators made an award whereby they awarded to the respondents the sum of Rs. 34,508-6-5, with interest. The appellants were dissatisfied with that award. The by-laws of the East India Cotton Association gave them a right of appeal to the Board of the Association " within " 10 days from the date of publication of the award," and they gave a proper notice of appeal within the prescribed period. The by-laws defined " the Board " as meaning " the Board of " Directors " of the Association " acting through at least a " quorum of their number at a meeting of that Board duly " called and constituted." The articles of association provided that six should form a quorum. Nine members of the Board were convened to hear the appeal. During the argument of counsel for the appellants one of the nine went away and did not return. His departure and his absence appeared to have escaped the notice of counsel. The appeal was fully heard by the remaining eight members, who, by a majority, decided that the sum awarded to the respondents should be reduced to Rs. 12,508-6-5. That decision was published on June 21, 1941. It was signed by the chairman and secretary, who had been authorized to sign it on the Boards behalf. On July 11, 1941, the award of March 19, 1941, and the decision on appeal were filed in the office of the Prothonotary of the High Court, who gave notice of such filing to the appellants on July 18, 1941.

The appellants thereupon petitioned the High Court of Bombay, praying " that the alleged awards dated " March 19, 1941, and June 21, 1941, be declared to be invalid " and set aside and taken off the file of the records of this " honourable court." The petition was heard by Chagla J., who was of opinion that when once the Board had been constituted for the purpose of hearing the appeal, the nine members who had been convened were to be regarded as joint arbitrators. Taking that view, he held that the appellants were entitled to an adjudication by all nine arbitrators acting together, and that the decision of June 21, 1941, which purported to be the decision of the Board, was invalid. The learned judge expressed the opinion that all the members of the Board who adjudicated should have signed the award, but if it had been necessary to decide the point he would have considered that that was an irregularity which could be cured, and would have remitted the award to them for their signatures. The conclusion at which the judge arrived was that " the award must be set aside.” As he had made no finding adverse to the validity of the award of the arbitrators, dated March 19, 1941, that mode of expression might have left it uncertain whether he intended to do more than set aside the decision on appeal, but the formal order of the court put the matter beyond doubt, stating as it did in terms that both the decision of the Board and the award of the arbitrators were to be set aside and taken off the file of the court.

The respondents then in their turn appealed to the High Court in its appellate jurisdiction, contending that the decision of the Board was valid and regular, and that the order of Chagla J. was wrong. The appeal was heard by Beaumont C.J. and Somjee J., who affirmed the decision of C