The consent of the umpire is not required for his appointment, and a clause in an arbitration agreement that provides for reference to the umpire only in case of disagreement between the arbitrators does not exclude the operation of Paragraph 4 of Schedule 1 of the Arbitration Act, which allows the umpire to enter the reference if the arbitrators fail to make the award within the time fixed.

Headnote:
ARBITRATION - APPOINTMENT OF UMPIRE - CONSENT OF UMPIRE NOT REQUIRED - CLAUSE EXCLUDING OPERATION OF PARA 4 OF SCHEDULE 1 OF ARBITRATION ACT - INTERPRETATION - UMPIRE'S JURISDICTION TO ENTER UPON REFERENCE - EXTENSION OF TIME FOR AWARD.
Fact of the Case:

Petitioner and respondents entered into an arbitration agreement dated 26th April 1967, which provided for arbitration of disputes by two arbitrators and an umpire. The arbitrators failed to make the award within the time fixed. The umpire, Mr. Mehta, was appointed without his consent. The petitioner filed a petition under Section 33 of the Arbitration Act, 1940, challenging the validity of the arbitration agreement, the appointment of the umpire, and his jurisdiction to proceed with the reference.
Finding of the Court:

1. The court held that the consent of the umpire was not required for his appointment, as the word "appoint" in the Arbitration Act does not imply acceptance of the appointment. 2. The court interpreted Clause 6 of the arbitration agreement, which provided for reference to the umpire only in case of disagreement between the arbitrators, as not excluding the operation of Paragraph 4 of Schedule 1 of the Arbitration Act, which allows the umpire to enter the reference if the arbitrators fail to make the award within the time fixed. 3. The court held that the umpire had jurisdiction to enter upon the reference, as the arbitrators had allowed the time fixed to expire without making the award. 4. The court extended the time for the umpire to make his award to 31st December 1968, with the consent of the parties.
Issues: 1. Whether the consent of the umpire was required for his appointment. 2. Whether Clause 6 of the arbitration agreement excluded the operation of Paragraph 4 of Schedule 1 of the Arbitration Act. 3. Whether the umpire had jurisdiction to enter upon the reference.
Ratio Decidendi: 1. The court relied on the plain meaning of the word "appoint" and the decision of the Privy Council in Mirza Sadik Hussain v. Musammat Kaniz Zohra Begum to hold that the consent of the umpire was not required for his appointment. 2. The court held that Clause 6 of the arbitration agreement did not exclude the operation of Paragraph 4 of Schedule 1 of the Arbitration Act, as the mere mention of one contingency (disagreement between arbitrators) in Clause 6 did not evince a clear intention to exclude the other contingency (failure to make the award within the time fixed) provided for in Paragraph 4. 3. The court held that the umpire had jurisdiction to enter upon the reference, as the arbitrators had allowed the time fixed to expire without making the award, and this amounted to "neglect" within the meaning of Section 8(1)(b) of the Arbitration Act.
Final Decision: The court determined that the arbitration agreement was valid, the appointment of the umpire was proper, and the umpire had jurisdiction to proceed with the reference. The court extended the time for the umpire to make his award to 31st December 1968.

ORDER

1. This is a petition under Section 33 of the Indian Arbitration Act, 1940, for the determination of the existence and/or validity of the Arbitration Agreement and/or the effect of the purported Reference to Arbitration between the parties, and for a declaration that there is no valid or proper agreement to refer and the decision of the purported appointment of the Umpires is inoperative, ineffective and void and the Umpire has no right to decide or proceed to decide the disputes between the parties arose out of certain selling agency agreements in respect of aluminum and copper wires manufactured by the petitioner. Disputes arose between the parties and claims for damages were made which disputes and claims were, under an Arbitration Agreement dated 26th April 1967 (a copy of which is annexed to the petition and marked A), referred to the Arbitration of two learned Counsel of this Court, Mr. H. G. Advani and Mr. J. M. Gandhi, with summary powers. Clause 2 of that Arbitration Agreement provided that the Arbitration proceedings were to be governed by the provisions of the Arbitration Act 1940, and clause 5 laid down that the Arbitrators had to make and publish their Award within four months from the date of their entering upon the reference. Clause 6 which is very material for the purpose of the present petition must be quoted. It is in the following terms:-

"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."

The Arbitrators held their first meeting on the 12th September 1967 at which they made the appointment of an Umpire in the following terms:-

"Mr. Porus Mehta failing him Mr. Murzban Mistry appointed Umpire." Some meetings were thereafter held and the pleadings completed in the proceedings before the Arbitrators. It is common ground that on the 11th of January, 1968 the time laid down by Clause 5 of the Arbitration Agreement between the parties expired. On the 14th February 1968, the respondents wrote a letter to the petitioner to the effect that the necessary extension of time should be obtained, but there was no reply by the petitioner to that letter. On 27th May 1968 the Umpire Mr. Mehta held a meeting before him which, however, was adjourned to the 17th Junde 1968 on which date he gave certain directions in regard to the proceedings before him. Preliminary objections to his right to decide or proceed to decide the said matter having been raised before him were rejected by him at the meeting held on the 12th and 13th of July 1968. The meeting fixed for the 20th of July 1968 was, however, adjourned as the Umpire was informed that the petitioner, proposed to file the present petition, which he did on the 29th July 1968 for the reliefs already set out by me above. The Petitioner claimed those reliefs on the grounds set out in paragraph 7 of the petition, but it may be stated that grounds (b) and (c) therein were not argued before me at all and must be treated as given up. The argument before me was based upon on the grounds mentioned as (a) and (d) in the said paragraph 7 of the petition, and they are as follows:-

(i) That the consent of the Umpire not having been obtained to his appointment as such before proceeding with the Arbitration, there was in effect no appointment of the Umpire at all (ground (a) of para 7);

(ii) that Clause 6 of the Arbitration Agreement excludes the operation of Paragraph 4 of Schedule 1 of the Arbitration Act by reason of the provisions of Section 3 of that Act, and the Umpire could, therefore, enter upon the reference only in the event of a difference arising between the arbitrators viz. on their disagreement. It is contended that no difference having arisen between the arbitrators in the present case when the time for making the Award expired, the Umpire had no right, to enter upon the Reference (ground (d) of Paragraph 7 of the pet

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