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1979 Supreme(Goa) 10

Goa High Court
TITO MENEZES, J. C.
Food Corporation of India - Appellant
Versus
M/s. Thakur Shipping Co. Ltd., Bombay - Respondents
First Civil Appeal No 90 of 1979
Decided On : 6 September 1979

Advocates Appeared:
P. K. Patkar, for Appellants; S. V. Joshi, for Respondents.

The interpretation of Section 34 of the Arbitration Act does not require the party to show willingness prior to the filing of the suit, and willingness at the commencement of the suit is sufficient to comply with the provisions.

Headnote:

Arbitration Act - Application for Reference to Arbitration - Interpretation of Section 34

Fact of the Case:

The appellants filed a suit against the respondents for recovery of a certain amount due to them under an agreement. The agreement contained a clause for arbitration. Before any step was taken in the suit, the respondents filed an application under Section 34 of the Arbitration Act, 1940, for the suit being referred for arbitration.

Finding of the Court:

The court found that the respondents were willing and ready to refer all disputes to arbitration at the time of the suit, and that the affidavit supporting the application was filed later due to oversight, which was condoned by the court.

Issues: The main issue was whether the respondents had complied with the provisions of Section 34 of the Arbitration Act, specifically regarding their willingness to refer the suit to arbitration.

Ratio Decidendi: The court interpreted the provisions of Section 34 and held that the existence of willingness prior to the filing of the suit need not be shown. Even if a party had initially expressed unwillingness but later proved willingness at the commencement of the suit and continued to be willing, the provisions of Section 34 must be deemed to have been complied with.

Final Decision: The court dismissed the appeal, upholding the impugned order and ruling in favor of the respondents, with costs.

JUDGEMENT :- The appellants filed a suit against the respondents for recovery of a certain amount due to them under an agreement. The agreement contained a clause for arbitration. Before any step was taken in the suit, the respondents filed an application under Section 34 of the Arbitration Act, 1940, hereinafter called "the Act", for the suit being referred for arbitration. The application was opposed to by the appellants on the ground that the respondents had not complied with the provisions of Section 34 inasmuch as they had not shown their willingness to refer the suit to arbitration. The objection was overruled by the order impugned in this appeal.

2. It is contended before me by Shri Patkar that when the application for reference to arbitration was made on 1-4-1977, the respondents did not satisfy the Court that they were, at the time when the proceedings were commenced, ready and willing to do all things necessary for the proper conduct of the arbitration. This argument is advanced on the ground that the affidavit supporting the application was filed on November 2, 1977, much after the application for reference to arbitration was made.

3. Shri Joshi on behalf of the respondents, contends that no step was taken in the suit after the filing of the application and that the mistake that occurred by oversight in not filing the affidavit along with the application pas condoned by the permission given by the Court to file the affidavit at a later date.

4. I agree with Shri Joshi. The affidavit is a piece of evidence which was necessary to enable the Court to give a finding on the fact as to whether the respondents were willing at the time at the suit, to refer the suit to arbitration. The permission for filing that piece of evidence was given by the Court obviously because no steps had been taken in the suit, between the Sling of application for reference to arbitration and the filing of the affidavit. Besides, the permission given by the Court to the respondents to file the affidavit was not challenged. The affidavit could therefore be duly relied upon by the trial Court, when deciding the question as to whether the respondents were willing to refer the matter to arbitration.

5. At paragraph 8 of the affidavit, the respondents have stated that they have always been ready and willing and continue to be ready and willing to refer all disputes to arbitration. This averment made by the respondents was accepted by the trial Court and I have no reason to differ from that Courts finding.

6. Shri Patkar contends that the respondents had to show not only willingness at the commencement of the suit, but also prior to the commencement of the suit. This interpretation of the provisions of Section 34 of the Act is totally unwarranted. The wording of the Section is clear and the existence of willingness prior to the filing of the suit need not be shown. In fact I would go as far as to say that even if the party had stated before the suit that it was unwilling to go to arbitration, but later on succeeds to prove that at the commencement of the suit the party was willing to refer the matter to arbitration and still remains so willing, thereafter, the provisions of Section 34 must be deemed to have been complied with.

7. Reliance was placed by Shri Patkar on the case of Food Corporation of India v. M/s. Thakur Shiping Co. AIR 1975 SC 469. The facts there were different. There the defendants had shown reluctance in referring the matter to arbitration prior to the filing of the suit. After the suit was filed an application was made for referring the matter for arbitration and the statement made by the defence then, was, that they are willing to refer the matter to arbitration. The willingness shown was expressed in the present tense. The defendants did not show that not only at the time of the application for reference to arbitration were they willing to make the reference, but that they were also willing to make the reference at the commencement of


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