1982 Supreme(Cal) 249
High Court Of Calcutta
RAMENDRA MOHAN DATTA, C. K. BANERJEE
ATIN BOSE - Appellant
Versus
HEAVY ENGINEERING CORPORATION LTD - Respondent
A. F. O. O. 544 Of 1977
Decided On : 07/14/1982
P.K.MALICK, PRADIP DUTTA, RAJAT GHOSH
An arbitration clause must be clear and certain in order to be enforceable. It must specify the disputes that are subject to arbitration and the procedure for resolving those disputes.
Headnote:
ARBITRATION - ARBITRATION CLAUSE - INTERPRETATION - VAGUENESS AND UNCERTAINTY - DISPUTES COVERED - READINESS AND WILLINGNESS TO ARBITRATE.
Fact of the Case:
A dispute arose between the appellant, a contractor, and the respondent-Corporation, over the payment of money for work done under a contract. The appellant filed a suit against the Corporation claiming the money due and alleging that certain deductions from the bills were unjustified. The Corporation applied for a stay of the suit under Section 34 of the Arbitration Act, 1940, relying on an arbitration clause in the contract.
Finding of the Court:
The court held that the arbitration clause was vague and uncertain and could not be enforced. It found that the expression "any dispute or difference" in the clause was limited to disputes relating to the interpretation of the contract and did not cover the factual disputes raised in the plaint. The court also found that the Corporation was ready and willing to go to arbitration at the relevant point of time.
Issues: 1. Whether the arbitration clause in the contract was vague and uncertain. 2. Whether the disputes raised in the plaint were covered by the arbitration clause. 3. Whether the Corporation was ready and willing to go to arbitration.
Ratio Decidendi: 1. The court held that the arbitration clause was vague and uncertain because it did not clearly specify the disputes that were subject to arbitration. The expression "any dispute or difference" was too broad and could be interpreted to cover any dispute between the parties, including factual disputes. The court also found that the expression "and many articles of condition thereto" was superfluous and meaningless. 2. The court held that the disputes raised in the plaint were not covered by the arbitration clause. The clause was limited to disputes relating to the interpretation of the contract and did not cover factual disputes such as the amount of money due to the appellant or the validity of the deductions made by the Corporation. 3. The court held that the Corporation was ready and willing to go to arbitration at the relevant point of time. The Corporation had taken steps to apply for a stay of the suit as soon as it was informed of the commencement of the legal proceedings.
Final Decision: The court allowed the appeal, set aside the order of the court below, and directed that the suit should proceed.
( 1 ) THIS appeal arises from the judgment and order of Sabyasachi Mukharji, J. , dated 29th September, 1977 ; (AIR 1976 NOC 200) in an application under Section 34, Arbitration Act, 1940. The learned Judge by his order has stayed the suit of the plaintiff Atin Bose, the appellant herein, filed by Mm on or about the 20th June 1977.
( 2 ) THE claim arose out of a contract dated 25th September, 1974 between Heavy Engineering Corporation Ltd, and Messrs. K. Lall and Co. a proprietary concern of the plaintiff Atin Bose. The contractor Atin Bose was to be paid by the respondent Corporation for providing escorts at the rate shown in the schedule of rates of the work as per terms and conditions of the contract. The said schedule including the notes thereof was to form an integral part of the said contract. Both the parties agreed that the terms and conditions as provided in the special conditions of contract and in general conditions of contract, would be applicable and would be binding on them, Of the special conditions which were provided therein, a condition read as follows:--"where the special conditions differ from the general conditions, those special conditions shall override the latter. All materials shall be considered in the possession, care and custody of the contractor and at the risk and responsibility of the contractor from the moment these have been delivered to and accepted in writing by the escorts until such time materials have been carried to and received in the conditions as delivered to the escort by an authorised officer of the Corporation at the destination. "it would appear that the question of deduction by the Corporation would come in under such special conditions.
( 3 ) THE said contract provided a clause under the general conditions of contract and the same read as follows:--"in the event of any dispute or difference between the parties in respect of rights and obligations of the parties as to the true intent and meanings of these presents and many articles of condition thereto, such dispute and differences of opinion shall be referred to the sole arbitrator nominated by the Managing Direct or of Heavy Engineering Corporation Limited, and his decision shall be final, conclusive and binding on the parties. "it is the above clause on the basis whereof the petitioner for stay, the respondent-Corporation herein, contends that the suit was rightly stayed inasmuch as the disputes, which are the subject-matters of this suit, are covered by the above arbitration clause.
( 4 ) ON behalf of the plaintiff appellant, however, it is contended that the said clause is vague, uncertain, indefinite, ambiguous and does not in law or in fact amount to a valid arbitration agreement or clause and the parties are not bound by such clause. On behalf of the appellant it is contended that the claim of the appellant in any event, as stated in the said suit, is not covered by the -said clause and the disputes mentioned in the said suit could not be referred to arbitration by the said clause which is being relied on as the arbitration clause by and on behalf of the respondent Corporation.
( 5 ) THERE is another point which has also been agitated both before the court below and before us and that is that the respondent-Corporation was not ready and willing to go to arbitration or to do all things necessary for the proper conduct of the arbitration. That contention was made on the basis of various letters which remained unreplied by the Corporation with the result that the plaintiff had to file the suit after the plaintiffs money claim was not paid by and on behalf of the respondent-Corporation.
( 6 ) REGARDING the above arbitration clause on the basis whereof the learned Judge of the court below has stayed the suit if would appear that the learned Judge was of the view that the expression "many" must be a typographical mistake and the correct word should have been "any" and the learned Judge has read the