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HIGH COURT OF CALCUTTA
CHAKRABARTI, LAHIRI
JUGGILAL KAMLAPAT - Appellant
Versus
GENERAL FIBRE DEALERS LTD. - Respondent
A. F. O. O. 147 Of 1953
Decided On : JULY 08, 1954
ARBITRATION - EX PARTE AWARD - NOTICE OF INTENTION TO PROCEED EX PARTE - NECESSITY - PREJUDICE - INTERPRETATION OF NOTICE.
Fact of the Case:
The respondents, General Fibre Dealers Limited, referred a dispute with the appellants, Juggilal Kamlapat, to arbitration in accordance with an arbitration clause contained in the contract. The arbitrators held a sitting on 15-4-1952, at which the respondents were not present. The arbitrators closed the proceedings and refused to give the respondents a further opportunity to present their case. The respondents applied to the High Court to set aside the award on the ground that the arbitrators had acted capriciously, arbitrarily, and without regard to the principles of justice, equity, and good conscience.
Finding of the Court:
The High Court set aside the award, holding that the arbitrators had not displayed the attitude of fairness expected of every person occupying a judicial or quasi-judicial position. The court found that the respondents had not been absent altogether, but their representative had only appeared a few minutes later than the appointed hour. The arbitrators had not yet made their award and in fact did not make it till the 17th April following. In the view of the learned Judge, denial of a further opportunity to present their case amounted to a denial of justice to the respondents and constituted legal misconduct.
Issues: 1. Whether the arbitrators were entitled to proceed ex parte in the absence of the respondents without giving them a proper notice of their intention to do so? 2. Whether the omission to give such notice caused prejudice to the respondents?
Ratio Decidendi: 1. The court held that the arbitrators were not entitled to proceed ex parte in the absence of the respondents without giving them a proper notice of their intention to do so. The court relied on the principles laid down in "Russell on Arbitration" and held that the procedural rule applicable to arbitration proceedings is more tolerant than the rule followed in Courts of law. However, the court held that there is a duty on the arbitrators to give notice of an intention to proceed ex parte, and that the failure to give such notice will result in the award being set aside, unless it is shown that the omission to give a notice has not caused any prejudice to the party against whom the ex parte order was made. 2. The court held that the omission to give a proper notice did cause prejudice to the respondents. The court found that the respondents had been, throughout the proceedings, most vigilant in attending to the case and that there was nothing to show that they would not have appeared before the arbitrators in any circumstances. The court also found that the respondents did appear on the date of hearing fixed, but were only late by a few minutes.
Final Decision: The appeal was dismissed, but there was no order for costs, either in the High Court or before the trial Judge.
( 1 ) I have not found it altogether easy to decide this appeal, but the weight of authority compels me to take the view which I am taking, I would add that having had an opportunity to consider the 'matter more fully since we reserved judgment the day before yesterday, I cannot say that, after all, good sense may not be on the side of that view.
( 2 ) THE appeal is against an order of S. R. Das Gupta, J. , dated 25-5-1953, by which the learned Judge set aside an award in favour of the appellants on the ground that the arbitrators had mis-conducted themselves in proceeding against the respondents ex parte and in refusing to give them a proper opportunity for presenting their case. Such being the scope of the appeal, the dispute which was referred to arbitration is not of much consequence, Nevertheless, the facts may be stated in outline.
( 3 ) IT appears that on 29-8-1951, the appellants Messrs. Juggilal Kamlapat, agreed to sell and the respondents, the General Fibre Dealers Limited, agreed to buy 1,50,000 bags of Com Sacks at the rate of Rs. 220/- per 100 bags. We are informed that 1,50,000 bags would make five hundred bales. Delivery of the goods was to be given within September, 1951, by placing the goods alongside the vessel which the respondent might name. On 18-9-1951, the respondents started giving shipping, instructions for placing ' the goods alongside S. S. Begum. The' appellants' case is that they were unable to place the goods alongside the vessel forthwith, inasmuch as the vessel was late in arriving at the Port and inasmuch as the lock-gate at the Kidder-pore Dock was completely closed for a considerable time for the purpose of repairs. However, on 29-9-1951, fifty bales were delivered. On the 1st of October, however, the respondents addressed a letter to the appellants in which they said that they had made a repurchase of 450 bales at the rate of Rs. 325/- per 100 bags and that they would send their difference bill in due course. One would think that the respondents were treating the contract as at an end, but it appears that when on 6-10-1951 the appellants placed a further instalment of 100 bales alongside the ship, the goods were accepted. Another 50 bales were delivered on the 8th of October following, and those goods also were' accepted by the respondents. Thereafter, on 13-10-1951, the respondents addressed another letter to the appellants in which they said that the appellants had been in default with respect to 300 bales and that they would send their difference bill in respect of that quantity of the goods in due course. Sometime thereafter, they appear to have sent a bill for Rs. 94,500/- which was apparently computed by taking Rs. 105/- as the rate of the difference. The appellants did not accept the bill and returned it to the respondents along with a letter in which they said that they were not liable to pay anything.
( 4 ) IN the last week of October, on some date which was not given to us, the respondents referred the dispute to the arbitration of the Bengal Chamber of Commerce in accordance with an arbitration clause contained in the contract. On 21-11-1951, the Registrar informed the parties that he had constituted a Court of Arbitration, That Court apparently was unable to enter upon the reference or to complete the work. within the time limited by law and, accordingly, on 24-3-1952, the Registrar informed the parties that he had constituted a second Court to adjudicate on the dispute. Thereafter, on the 3rd April, the Registrar issued a notice to the respondents, informing them that a sitting of the Court would be held on 9-4-1952, and requiring them to produce their evidence at the hearing: The letter or notice concluded by saying that it the respondents failed to appear at the time and the date mentioned, the Court would hear and take into consideration whatever evidence was adduced by the opposite party that is to say, the appellants. Then followed another letter fro
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