Back
High Court Of Calcutta
Dipak Kumar Sen
FEDERAL REPUBLIC OF GERMANY - Appellant
Versus
S.DEY AND ASSOCIATES - Respondent
Awardmatter 351 Of 1972
Decided On : 05/22/1975
ARBITRATION - Setting aside of award - Maintainability of application before filing of award - Arbitration Act, 1940, Ss. 14, 30, 31, 33.
Fact of the Case:
The petitioner, a foreign entity, entered into a contract with the respondent for the execution of certain works. The contract contained an arbitration clause providing for the appointment of an architect or consulting engineer as the sole arbitrator in case of disputes. Disputes arose between the parties, and the respondent appointed a barrister as the sole arbitrator, bypassing the named arbitrator in the agreement. The said arbitrator proceeded with the reference and made an award in favor of the respondent. The petitioner filed an application under Sections 30 and 33 of the Arbitration Act, 1940, seeking to set aside the award on various grounds, including the lack of jurisdiction of the appointed arbitrator.
Finding of the Court:
The court held that the arbitrator had sufficiently complied with Section 14 of the Arbitration Act, 1940 by forwarding the award to the court, and that further ministerial action necessary to have the award filed in court could be done on behalf of the arbitrator by the petitioner with the leave of court. The court also held that the purported award was invalid as the respondent was not entitled to assume that the original arbitrator had ceased to have jurisdiction or to appoint a sole arbitrator, and that the appointed arbitrator was incompetent to enter into the reference as he lacked the requisite technical knowledge.
Issues: 1. Whether an application to set aside an arbitration award can be made before the award is filed in court? 2. Whether the appointment of a sole arbitrator by one party without the consent of the other party is valid? 3. Whether an arbitrator who lacks the requisite technical knowledge can enter into a reference?
Ratio Decidendi: 1. The court held that the filing of an award in court is not a condition precedent for making an application to set aside the award. The court reasoned that the Arbitration Act, 1940 contemplates arbitrations without the intervention of the court, and that the court retains jurisdiction over such arbitrations at all stages if the subject-matter thereof is within its jurisdiction. The court further held that an award can be set aside without considering or construing the exact language of the award on grounds which may be established without any reference to the award at all. 2. The court held that the appointment of a sole arbitrator by one party without the consent of the other party is invalid. The court reasoned that the arbitration agreement in this case provided for the appointment of an architect or consulting engineer as the sole arbitrator, and that the respondent was not entitled to unilaterally appoint a barrister as the sole arbitrator. 3. The court held that an arbitrator who lacks the requisite technical knowledge cannot enter into a reference. The court reasoned that the arbitration agreement in this case contemplated that only an engineer or an architect or a person having technical knowledge of the subject-matter could be appointed as an arbitrator.
Final Decision: The court set aside the purported award and directed the petitioner to take necessary steps to have the award filed as of record.
( 1 ) THE Federal Republic of Germany and/or the Consulate General of the Federal Republic of Germany has made this application under Sections 30 and 33 of the Arbitration Act, 1940 praying, inter alia, for orders that (a) A purported award made by one R. P. Banerjee on the 28th August, 1972 should be set aside; (b) The respondent S. Dey and Associates or its servants, agents or officers be restrained permanently from taking any proceedings or further proceeding either by way of procuring judgment or otherwise on the said purported award.
( 2 ) THE events which have led up to these proceedings may be briefly stated as follows:
( 3 ) PURSUANT to an invitation issued on behalf of the petitioner, a written tender submitted by S. Dey and Associates, the respondent No. 1, on the 26th February, 1971, followed by two letters on behalf of the petitioner respectively dated the 16th March, 1971 and the 21st April, 1971 a contract was entered into by and between the petitioner and the respondent No. 1. The said contract was incorporated in a formal document in writing dated the 10th June, 1971. Under the said contract the respondent No. 1 was engaged to execute the works of specified additions, alterations and interior decoration of premises No. 1, Hastings Park Road, Alipore, Calcutta, at agreed rates and specifications under the supervision of M. M. Bilaney and Co. , the Architects and Consulting Engineer (hereinafter referred to as the said Architects ).
( 4 ) SUBLETTING or assigning the contract without the written consent of the petitioner was prohibited and it was stipulated that in case of such subletting or assigning, the said Architects would be entitled to determine the contract by a notice of seven days.
( 5 ) THE said contract also contained an arbitration clause as follows-:"all disputes and differences of any kind whatever arising out of or in connection with the contract or the interpretation of the contract, or the carrying out of the works (whether during the progress of the works or after their completion abandonment, frustration or breach of the contract) would be referred to the arbitration of and be settled by the said Architects who shall state his decision in writing. The decision of the said Architects with respect to any of the excepted matters would be final and without appeal. "but if either the petitioner or the respondent No. 1 be dissatisfied with the decision of the said Architects on any matter, question or dispute of any kind (except any of the excepted matters) or as to the withholding by the said Architects of any certificate to which the respondent No. 1 might claim to be entitled, then and in any such case either party might within twentyone days after receiving notice of such decision give a written notice to the other party requiring that such matters in dispute to be arbitrated upon. Such written notice shall specify the matters which are in dispute and such disputes or difference of which such written notice has been given and no other shall be referred to the arbitration and final decision of a single arbitrator being an Architect and Consulting Engineers to be agreed upon and appointed by both the parties or in case of disagreement as to the appointment of a single arbitrator, to the arbitration of two arbitrators being both Consulting Engineers, one to be appointed by each party. The arbitrators shall before taking upon themselves the burden of reference, appoint an umpire. "the arbitrator, the arbitrators or the umpire would have power to open up, review and revise any certificate, opinion, decision, requisition or notice save in regard to the excepted matters referred to in Clause 32 and to determine all matters in dispute which might be submitted to him or them and of which notice would have been given as aforesaid. The submission would be deemed to be a submission to arbitration within the meaning of the Arbitration Act, 1940, or any statutory modification thereof. T
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
