HIGH COURT OF CALCUTTA
U.C. LAW, J.
Prabartak Commercial Corporation - Appellant
Versus
Ramsahaimull More Ltd. - Respondent
Suit 59,60 Of 1958
Decided on : Apr 17, 1962
ARBITRATION - JURISDICTION - SEPARATE CONTRACTS - SINGLE REFERENCE - AWARD - VALIDITY - RULES OF BENGAL CHAMBER OF COMMERCE AND INDUSTRY - RULE 1(5) - INTERPRETATION - LEGALITY OF AWARD MADE IN BREACH OF AGREED PROCEDURE.
Fact of the Case:
The petitioner and respondent entered into two separate contracts for the sale and purchase of jute. Disputes arose under both contracts, and the respondent submitted two difference bills to the petitioner for payment. The petitioner failed to pay, and the respondent made a single application to the Bengal Chamber of Commerce and Industry for arbitration of both disputes. The Tribunal of Arbitration constituted a single court to adjudicate upon both disputes and made two separate awards, one in respect of each contract. The petitioner challenged the validity of the awards, contending that separate references should have been made for each contract and that the making of two awards in one reference was not permissible.
Finding of the Court:
The court held that the Tribunal of Arbitration had no jurisdiction to adjudicate upon both disputes in one reference. It held that Rule 1(5) of the Rules of the Bengal Chamber of Commerce and Industry, which provides that "any agreement to refer more than one difference or dispute between the parties which arises under separate contract shall be treated as a separate reference in respect of each contract," is mandatory. The court further held that the making of two awards in one reference was not permissible unless otherwise agreed between the parties, and that there was no such agreement in this case.
Issues: 1. Whether it is permissible to constitute one Court for the adjudication of two separate disputes arising under two different contracts under the Rules of the Bengal Chamber of Commerce and Industry? 2. Whether there can be more than one award in one reference?
Ratio Decidendi: 1. Rule 1(5) of the Rules of the Bengal Chamber of Commerce and Industry, which provides that "any agreement to refer more than one difference or dispute between the parties which arises under separate contract shall be treated as a separate reference in respect of each contract," is mandatory. Therefore, the Tribunal of Arbitration had no jurisdiction to adjudicate upon both disputes in one reference. 2. Unless otherwise agreed between the parties, there can be only one award in one reference. In this case, there was no agreement between the parties that the Arbitrators could make two awards in one reference. Therefore, the making of two awards in one reference was not permissible.
Final Decision: The court allowed the application and set aside the awards. The respondent was ordered to pay the costs of the application.
U.C. Law, J.
1. THIS is an application that the Award dated 13 March 1957 made in Award Case No. 92-G of 1952 filed in the said Award Case be declared null and void and/or be set aside.
2. BY exchange of Sold Note and corresponding Bought Note both bearing No. 1185 and dated 10 September 1951, the petitioner sold and the respondent bought 6,00,000 bales of Heavy Cees at Rs. 205/- per hundred bags, delivery during months of October, November and December 1951 at 2 lakhs bags per month. The petitioner failed to deliver whereupon on 12 November 1951 by a Settlement Bought Note No. 1332 the petitioner bought back from the respondent 2 lakhs of Heavy Cees in settlement of October delivery at Rs. 238/- per hundred bags and on 28 November 1951 it bought back from the respondent under another Settlement Bought Note No. 1382 further 2 lakhs bags in settlement of the November delivery at Rs. 247/- per hundred bags. Under all the aforesaid contracts each month's delivery was to be treated as distinct and separate contract and each of the contracts contained an arbitration clause in the standard form prescribed by the Indian Jute Mills Association.
Pursuant to the above two settlement contracts the respondents submitted to the petitioner two Difference Bills being No. G/D 3971A dated 13th November 1951 for Rs. 73,298-8-9 pies in respect of Contract No. 1332 and No. G/D 3994 dated 30 November 1951 for Rs. 93,289-2-9 pies in respect of Contract No. 1382 for payment, but the petitioner failed and neglected to do so in spite of demand. Disputes having thus arisen between the parties the respondent on 25 February 1952 made one application for arbitration to the Bengal Chamber of Commerce but in their statement included two distinct and separate claims against the petitioner which arose out of two different contracts being Contract No. 1332 and No. 1382 hereinbefore mentioned. The claim in Contract No. 1332 was Rs. 73,298-8-9 with interest at 9 per cent per annum from 10 January 1952 and the claim under Contract No. 1382 was Rs. 93,289-2-9 with interest 9 per cent per annum from 10 January 1952 for which two separate difference bills had been duly submitted but not paid. The respondent had also enclosed one cheque for Rs. 800/- on account of the fees of the arbitration proceedings with their application dated 25 February 1952. Thus it appears that two distinct claims were made by the respondent in one application to the Bengal Chamber of Commerce and Industry which the Tribunal of Arbitration treated as one reference and marked as Case No. 92-G of 1952.
3. ON 8 March 1952 the Registrar of the Tribunal of Arbitration, in Case No. 92 G of 1952 wrote to the petitioner that the respondent had applied for arbitration in a dispute regarding their claim for payment of difference in price of 2 lakhs bags of Heavy Cees October 1951 portion and 2 lakhs bags of Heavy Cees November 1951 portion under contract No. 1185 of 10 September 1951 and also forwarded the respondent's letter dated 25 February 1951 with the accompanying papers containing their claims and contention. By the said letter the Registrar also asked for the petitioner's statement of case in duplicate at an early date together with a deposit of Rs. 450/- on account of fees and the original Sold Note. By a notice dated 8 April 1952 the Registrar informed the petitioner that he had "duly constituted a Court to adjudicate upon the disputes in this case". Thereafter the petitioner filed its statement of case before the Arbitrators stating that they were doing so without prejudice to their rights and contentions and particularly that the purported Arbitrators and the Court constituted in the said reference had no jurisdiction to adjudicate upon the dispute between the parties. The petitioner's contention before the Arbitrators amongst others, was that each month's delivery was to be treated as a distinct and separate contract and accordingly two separate applications should have been made b
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