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1953 Supreme(Cal) 55

HIGH COURT OF CALCUTTA
S. R. Das Gupta
HUSEIN EBRAHIM - Appellant
Versus
KESARDEO KANORIA AND CO. - Respondent
Award 120  Of  1952
Decided On : MARCH 17, 1953

Advocates Appeared:
H.N.SANYAL, R.C.Deb

Arbitrators must not behave in a manner in which no reasonable person occupying such a position would behave. There must be some standards to which the arbitrators occupying such quasi-judicial positions should conform.

Headnote:

ARBITRATION - JURISDICTION - SECOND COURT CONSTITUTED WITH SAME ARBITRATORS - MISCONDUCT - ARBITRATORS OBTAINING INFORMATION FROM THIRD PARTY WITHOUT REFERENCE TO PARTIES - AWARD SET ASIDE.

Fact of the Case:

An application was filed to set aside an award of the Bengal Chamber of Commerce. The applicant raised three grounds: (1) the arbitrators had no jurisdiction to make the award, (2) the arbitrators were guilty of misconduct, and (3) the arbitrators received information from the Gunny Trades Association behind the back of the parties.

Finding of the Court:

The court found that the second Court constituted to make the award consisted of the same persons as the first Court, which had failed to make an award within the time limit. This was in violation of Rule 7 of the Rules of the Tribunal of Arbitration, Bengal Chamber of Commerce. The court also found that the arbitrators were guilty of misconduct in obtaining information from the Gunny Trades Association without reference to the parties and in not disclosing the letter in which they asked for such information.

Issues: 1. Whether the second Court had jurisdiction to make the award. 2. Whether the arbitrators were guilty of misconduct. 3. Whether the award should be set aside.

Ratio Decidendi: 1. The court held that the second Court did not have jurisdiction to make the award because it consisted of the same persons as the first Court, which had failed to make an award within the time limit. This was in violation of Rule 7 of the Rules of the Tribunal of Arbitration, Bengal Chamber of Commerce. 2. The court held that the arbitrators were guilty of misconduct in obtaining information from the Gunny Trades Association without reference to the parties and in not disclosing the letter in which they asked for such information. 3. The court held that the award should be set aside because the arbitrators had been guilty of misconduct.

Final Decision: The court set aside the award.

S. R. DAS GUPTA, J.

( 1 ) THIS is an application to set aside an award of the Bengal Chamber of Commerce. Mr. Deb appearing on behalf of the applicant raised three grounds in support of his contention that the award should be set aside. In the first place, he urged that the arbitrators had no jurisdiction to make the award. The reason for his saying this is that the first Court which was constituted on the 28th June 1951 consisted of two persons namely, Messrs. K. E. Tosh and w. B. Cochran. The said arbitrators or the Court did not make their award in time and the time to file their award having expired, on the 10th November 1951 the Registrar of the Bengal Chamber of Commerce wrote to the parties informing them that he had constituted another Court, and thereafter the second Court proceeded with the arbitration and made its award on the 23rd November 1951 which is now sought to be challenged before me.

( 2 ) MR. Deb contends before me that the second Court as notified on the 10th November 1951 consisted of the same persons, namely, Messrs. K. E. Tosh and W. B. Cochran. That being so, the second Court has no jurisdiction to make the award in view of the provisions of Rule 7 of the Rules of the Tribunal of Arbitration, Bengal Chamber of Commerce.

( 3 ) THE second ground urged by Mr. Deb is that the arbitrators have been guilty of misconduct, because, the arbitrators did not send to the petitioner the final statement in reply filed before the arbitrators by the respondents, and it was not until the petitioner had searched the records that they came to know that such a statement had been filed. This conduct on the part of the arbitrators, it is contended, amounts to misconduct. Lastly, Mr. Deb urged before me that the arbitrators received from the Gunny Trades Association certain informations behind the back of the parties. What happened was that on the 13th November 1951, the petitioner received a copy of a letter of the Gunny Trades Association addressed to the Registrar, Tribunal of Arbitration, Bengal Chamber of Commerce which reads as follows:"dear Sirs, case 105-G of 1951. Your letter No. 24085-C dated 5-11-51. On the 1st March 1951, the market for B twills was not free. The contracts were passed at the maximum plus 2 1/2 per cent to 5 per cent commission over the maximum, rate but the inter-bazar business was actually reported to have been done at 30 per cent higher on the February 1951 due date. Certain English Dailies also published these rates from time to time. "

( 4 ) THE said letter was in answer to the letter dated 5-11-51 written by the Registrar to the said Gunny Trades Association. Mr. Deb urged before me that this conduct on the part of the arbitrators, namely, asking for information from a third party without any reference to the parties amounts to misconduct, He also urged that in any event, the arbitrators should have placed before the parties the letter dated 5th November 1951 written by them to the Gunny Trades Association to which the letter dated 9th November, 1951 was the reply and therefore, the award should be set aside.

( 5 ) IT seems to me that the first and the third grounds raised by Mr. Deb should prevail. I am of the opinion that the constitution of the second Court was in violation of the provisions of Rule 7 of the Rules of the Tribunal of Arbitration, Bengali Chamber of Commerce. Rule 1 provides as follows :"after the Court have allowed the time or extended time to expire without making any award and without having signified to the Registrar that they cannot agree, the Registrar shall constitute in manner aforesaid another Court which shall proceed with the arbitration and shall be at liberty to act upon the record of the proceedings as then existing and on the evidence, if any, then taken in the arbitration or to commence the arbitration de novo. "

( 6 ) "court" has been defined in Rule 1 as meaning "the arbitrator or arbitrators appointed for determining a particular dispute or the umpir





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