P. N. MOOKERJEE, J.

( 1 ) IN this appeal, which arises out of an application under Section 34 of the Indian Arbitration Act and in which the plaintiff-appellant Serajuddin and Co. seeks reversal of an order of stay of its suit under the said section, pending a certain arbitration proceeding, two questions arise for consideration. The first is whether the said section has any application to the instant case and the second relates to the exercise of discretion under that section. Before the learned trial Judge (Ray, J.), another point was also urged, namely, whether the arbitration clause in question suffers from any material vagueness which would render it inoperative or ineffective in law. But that point was not pressed before us by the learned Counsel who appeared in support of the appeal.

( 2 ) THE learned trial Judge held, inter alia, that Section 34 of the Indian Arbitration Act applied to the present case and that it was a fit case for the exercise of his Discretion under that section in favour of the defendants applicants Michael Golodetz and others and, accordingly, he stayed the plaintiff's suit under that section. The aggrieved plaintiff has now appealed before us.

( 3 ) THE relevant facts are not much in dispute, except on some details, to which reference will be made in due course. To appreciate the controversy between the parties, we shall state at once the events which led to the present dispute and litigation and to the present proceeding. Those events stand as follows :

( 4 ) ON July 5, 1955, the parties to the present proceedings namely, the defendants petitioners Michael Golodetz and others, carrying on business in New York under the name and style of Michael Golodetz and Co. , (a firm registered in New York under the appropriate law) and the plaintiff opposite party Serajuddin and Co. , fa firm registered under the Indian Partnership Act), which was the respondent to the Section 34 application in the court below, entered into an agreement (Contract No. 585) in writing for the purchase and sale of 25,000 tons of manganese ore of certain specifications at a price, mentioned in the said agreement. Under the terms of the above contract, delivery was to be made according to the following schedule, namely, (a) 8, 500 tons between April and June, 1950, (b) 8,000 tons between July and September, 1956, and (c) 8,500 tons between October and December, 1956.

( 5 ) IN its concluding part, the above agreement contained an arbitration clause which ran as follows : "any dispute arising out of the contract is to be settled by arbitration in New York according to the rules of the American Arbitration Association. "

( 6 ) FOR reasons, which it is not necessary to state or determine for our immediate purpose, dell-very was not or could not be made according to the above schedule and, as a matter of fact, only 2019 tons 16 Cwt. were delivered or shipped by the seller Serajuddin and Co. in September, 1956, and a further quantity of 3348 tons approximately was shipped between January and August, 1957. No more was supplied under the above contract and, about the middle of January, 1958, the buyers Michael Golodetz and Co. referred the disputes and differences (which appear to have meanwhile arisen between the parties in view of the above) to the arbitration of the American Arbitration Association.

( 7 ) THE buyers alleged default on the part of the seller in the matter of delivery or supply of the ores in question which the seller denied and set up, in its turn, a plea of full satisfaction and also of discharge or frustration of the contract due to intervening events. The buyers did not agree and, in consequence, arose disputes and differences between the parties which, the buyers, as stated above, referred to the arbitration of the American Arbitration Association, purporting to do so under the arbitration clause, quoted hereinbefore.

( 8 ) INTIMATION of the above reference was given to the seller towards the end of January,

Click Here to Read the rest of this document