The agreement between the parties specifying the substantive and procedural law governing the contract and arbitration proceedings prevails, and the appellant's right to invoke Section 34 of the Indian Arbitration Act is subject to exhausting the appeal remedy provided under the agreement.

Pius C. Kuriakose, J.

The appellant company, an exporter of cashew, is aggrieved by the order of the District Court, Kollam dismissing an original petition filed by them under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Indian Arbitration Act) for setting aside the award passed by the Arbitral Tribunal and also for a declaration that the award is unenforceable as the same is made in violation of the principles of public policy of India and for incidental reliefs. The appellant entered into an agreement with the first respondent, a British Company for export of cashew through the second respondent company, Indian counter part of the first respondent company. Since dispute arose between the parties over violation of the agreement, the parties referred to matter to arbitration. As per the agreement entered into between them and in pursuance to the reference the arbitrators passed an award. The original petition under Section 34 of the Arbitration and Conciliation Act was filed as O.P. No. 152 of 2009 by the appellant before the District Court alleging that the award is against the public policy of India, is illegal, is against evidence on record, that the arbitrators are biased and that the award has been passed violating the procedure established by law. Along with the O.P. the appellant filed I.A. No. 458 of 2009 seeking stay of further proceedings in pursuance to the award and I.A. No. 459 of 2009 seeking to call for the records from the arbitrators. The first respondent company filed counter affidavit to I.A. No. 458 of 2009 disputing many of the allegations made in the application and contending that the O.P. is not maintainable as the appellant company cannot approach the court without exhausting the remedy of appeal provided in the agreement between the parties. According to the first respondent, the appellant company's act amounted to frog-leap. Once the company had agreed to a procedure, the company cannot be allowed to deviate from that procedure. On the basis of the contentions raised, the learned District Judge heard the parties regarding the maintainability of the original petition. The learned District Judge referred to clause (10) of the agreement and found that the above clause provides for an appeal to the Executive Committee of CENTA against the arbitration award. The learned District Judge would then refer to Section 34 of the Indian Arbitration Act and would opine that there is nothing in Section 34 which prohibits an appeal by agreement. According to the learned District Judge the parties did agree to confer upon the Executive Committee of CENTA the power to decide the appeal. The District Judge noticed that the right of appeal should be exercised only after complying with certain conditions.

2. According to the District Judge though the conditions were onerous as the conditions were engrafted by the parties with open eyes and realising the difficulties, they are not entitled to urge that because of the conditions are onerous, the right of appeal is not a meaningful right. To take such a view the learned District Judge relied on the judgment of the Madras High Court in M.A. Sons v. M. O. & S. Exchange (MR 1965 Mad 392). The learned District Judge would hold on the authority of the judgment of the Supreme Court in Datar Switchgears Ltd. v. Tata Finance Ltd. and Another (2000(8) SCC 151) that the parties are free to choose the procedure and would hold that having chosen the procedure it is not open to the parties to blame the procedures so chosen. The appellant relied on the judgment in Montrose Canned Food Ltd. v. Eric Wells (Merchants) Ltd. (1965 Vol.1 Page 597), a decision wherein it was held that whether or not a party should exhaust the remedy of appeal provided to him under the agreement before challenging the award of the Arbitral Tribunal in the court, was a matter of discretion. According to the learned District Judge the above decision is not an aut