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HIGH COURT OF CALCUTTA
Bachawat
LUXMI CHAND BAIJNATH - Appellant
Versus
KISHANLAL SOHONLAL - Respondent
Suit 217 Of 1954
Decided On : AUGUST 30, 1954
ARBITRATION - UNCERTAINTY IN ARBITRATION AGREEMENT - ELECTION - WHO HAS THE OPTION - CONSTRUCTION OF ARBITRATION CLAUSE - AWARD - VALIDITY.
Fact of the Case:
Petitioner and respondent entered into two separate contracts for the purchase of blankets. The contracts contained an arbitration clause providing for the resolution of disputes by the Arbitration Board of the Blanket and Shawl Traders' Association or by arbitrators appointed by the buyer and seller. The respondent appointed an arbitrator and gave notice to the petitioner, who failed to appoint an arbitrator or respond to the notice. The arbitrator proceeded ex parte and made an award against the petitioner.
Finding of the Court:
The court found that the petitioner had received the notice of arbitration and had the opportunity to file a statement and present its defense, but failed to do so. The court also found that the petitioner did not attend the arbitration hearing despite receiving reasonable notice. The court rejected the petitioner's objections to the award based on lack of opportunity to be heard and lack of reasonable notice.
Issues: 1. Whether the arbitration agreements were uncertain due to the alternative provision for arbitration by the Arbitration Board of the Blanket and Shawl Traders' Association or by arbitrators appointed by the parties. 2. Whether the uncertainty in the arbitration agreements could be cured by election. 3. Whether the respondent had the option to choose the arbitration tribunal.
Ratio Decidendi: The court held that the arbitration agreements were uncertain because they did not specify under what circumstances the reference was to be made to the Arbitration Board or to the arbitrators appointed by the parties. The court rejected the respondent's argument that the uncertainty could be cured by election, as there was nothing in the agreements to indicate who had the option to choose the arbitration tribunal. The court also held that the respondent did not have the option to appoint either the Arbitration Board or the arbitrators appointed by the parties, as the agreements did not authorize such unilateral action.
Final Decision: The court declared the arbitration award invalid and set it aside. Each party was directed to bear its own costs.
( 1 ) THIS is an application to declare that the arbitration agreement and the awards are void, illegal and inoperative and for setting aside the awards.
( 2 ) BY the two separate contracts dated 12/8/1953 the petitioner agreed to purchase blankets from the respondent. I have looked at the original contracts which are in Hindi and I accept the Official Translation to be correct. Each of the contracts contained the following arbitration clause:"if there arise any dispute or trouble regarding this contract, then the same shall be decided by the Arbitration Board of the Blanket and Shawl Traders' Association or by the arbitrators appointed by the buyer and by the seller one (by) each both of whom shall be senior traders, (and such decision) shall be accepted by both persons -- (buyer and seller), and the said decision shall be deemed as the final decision. "
( 3 ) PART of the goods were delivered. The respondent claims the balance of the price of goods sold and delivered. The petitioner counter-claims for damages for not delivering the balance goods.
( 4 ) THE respondent appointed Shri Ram Nath Bagaria as his arbitrator and by notice dated 16/2/1954 requested the petitioner to appoint his arbitrator. Thy notice was received by the petitioner on 17/2/1954. Fourteen clear days expired from the date of the service of the notice, but the petitioner did not appoint his arbitrator and did not send any reply. On 5/3/1954 the respondent appointed Ram Nath Bagaria as sole arbitrator and gave notice of the appointment to the petitioner. The petitioner did not send any protest nor any reply to this letter. By notice, dated 19/4/1954 the arbitrator enclosed the statement of the respondent and asked the petitioner to submit its statement within 7 days. This notice was received by petitioner on 20/4/1954. The petitioner did not file any statement and did not send any reply. By notice, dated 5/5/1954 to the petitioner the arbitrator appointed 10/5/1954, 3-30 P. M. for hearing. The notice was received by the petitioner on 10/5/1954. The petitioner did not appear at the hearing of the arbitration on 10/5/1954. On 19/5/1954 the arbitrator made, an ex parte award against the petitioner.
( 5 ) THE objections to the award are summarised in paras. 5 and 6 of the petition.
( 6 ) OBJECTIONS under para. 6: Grounds (c) and (f) of this paragraph have been abandoned by learned counsel for the petitioner. The petitioner charges that there was no opportunity or reasonable opportunity to file a statement or to put forward its defence or to place relevant facts, (b) that no notice or reasonable notice of the hearing on 10-5-1954 was. given and (c) that the arbitrator proceeded ex parte without sufficient cause.
( 7 ) THE following issues1 were raised:1. Did the petitioner receive the letter dated 19-4-1954 referred to in para. 6 of the affidavit-in-opposition?2. Did the arbitrator give no opportunity and/or reasonable opportunity to the petitioner to file any statement and/or put forward any defence before the arbitrators as alleged in para. 6 (a) of the petition?3. Did the arbitrator give no notice or reasonable notice of the hearing of the case before him on 10-5-1954 or on any other date or at all as alleged in para 6 (b) of the petition?
( 8 ) THESE issues were tried on oral evidence. Issue No. 1: clearly the issue must be answered in the affir mative. Issue No. 2: The petitioner received the notice dated 19-4-1954 and had full opportunity to file statement and to put forward its defence and to place relevant facts before the arbitrator and the issue is answered in the negative. Issue No. 3: the notice dated 5-5-1954 was served on the petitioner on 10-5-1954, The notice was issued in Calcutta and was served in Calcutta. The delay of 5 days in the Course of transmission of the notice is somewhat curious. The original cover has not been produced by the petitioner. The notice was received by Raghunath on 10-5-1954. The hearing of the arbitra
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