The non-payment of price of goods is not a dispute under or arising out of a contract.

( 1 ) THIS is an application for stay under S. 34 of the Arbitration Act moved in respect of a suit filed by the plaintiff for the recovery of some amount (over Rs. 1-1/2 lacs) said to be due as a result of a contract for the supply of 4,000 jerseys. The plaint states that the goods were supplied and were passed by the Inspector and then payments were not made. The plaintiff also claims some interest under S. 61 of the Sale of Goods Act. The suit is, therefore, a suit for the recovery of price of goods supplied. The application under S. 34 is to the effect that there is an arbitration clause and the matter has to go to the arbitrator.

( 2 ) THE subject-matter of this application, namely, that there is an arbitration clause and the matter should be referred to arbitration is the subject-matter of many reported cases. In spite of those cases which have fully clarified the whole legal position, there seems to be some misapprehension or misconception regarding the scope of S. 34 of the Arbitration Act which results in applications of the present type being moved on the assumption that because there is an arbitration clause hence all claims have necessarily to be referred to an arbitrator and a suit based on such a claim should be stayed. I must say that the argument that such a matter should be referred to arbitration has points in its favour and also points against it. As far as the points in favour of the matter being referred to arbitration are concerned it is useful to say that if a simple claim for price could be referred directly to an arbitrator it might avoid considerable expense to the parties. However, if the dispute is such that it cannot properly be referred to arbitration then there is no choice for the parties but to institute a civil suit in spite of the additional expenses involved.

( 3 ) COMING to the legal question and the nature of the misconception which seems to lead to the filing of such application for stay, I think, it is useful to mention that an arbitration clause, even though it may be worded in the widest possible language, only allows differences and disputes relating to or arising out of or in connection with a contract to be referred to an arbitrator. It may well be said the non-payment of the price of goods supplied is also a dispute or difference which should lead the matter to be referred to arbitration. However, the word difference or word dispute is not to be understood in this way when applying the law of arbitration. A dispute means that one party has a claim and the other party says for some specific reasons that this is not a correct claim. This is a dispute. A dispute of this type requires that there should be a statement or proposition made by one side and there should be denial or refutation of that proposition by the other side. Then only can there be a dispute. Under a contract for the supply of goods, the payment of price and, the delivery of goods are concurrent conditions, s This is the definition of a sale under the Sale of Goods Act. If goods have been delivered and price not paid, this is not a dispute within the meaning I have just ascribed to the word dispute . A mere failure to pay the price is not a dispute. It is a mere non-performance of a specific term or condition of a contract. A dispute regarding the price could arise if, e. g. , the purchaser says that goods are not of the proper quality and he refuses to pay the price, or he might say that goods have been delivered late, so, he would pay less price or he would hold up part of the price, or he might say you have delivered the goods late, I have suffered loss, I would reduce the price by the amount of loss" If the purchaser makes any of these claims or similar claims then there is a dispute. If no such position is taken, then there is no dispute.

( 4 ) NOW turning to the word difference this also has a similar meaning to the word dispute . A difference may be, for instance, regarding the meaning o