An application under S. 20 of the Arbitration Act, 1940, for an order to file the agreements and make an order of reference to the arbitrator is maintainable even after the award has been set aside, provided that the arbitration agreements are still subsisting and there is no misconduct on the part of the arbitrator.

RAJAMANNAR, C.J. :- The parties to this appeal entered into three contracts in respect of purchase and sale of groundnut expeller oil cake each of which contract contained a clause that in the event of any dispute arising out of the said contracts including the construction or fulfilment of the same, such disputes shall be settled by arbitration by and under the rules of the Madras Chamber of Commerce.

Disputes did arise between the parties and the arbitration clause was invoked. The Madras Chamber of Commerce thereupon entered on their duties as arbitrators. The arbitration was entrusted to one of their members. The hearing appears to have been posted to 9-3-1953, when the respondents counsel was absent and a request was made for adjournment on that ground. The arbitrator finding that the time for submission of the award was fast approaching wanted to know from the parties whether they would agree for an extension of time.

Eventually the appellant before us agreed to such extension, but not the respondents. Thereupon, the arbitrator went on with the proceeding without the respondents and passed an award. This award was set aside on an application made by the respondents by Chandra Reddy, J. on 3-12-1953. The two grounds on which he set aside the award were (1) that the arbitrator had made the award without passing any order on the respondents application for adjournment and without intimating to them that he proposed to proceed with the reference, and (2) that the respondents were not furnished with a copy of the rejoinder, which had been filed by the appellant.

Though the learned Judge set aside the award, he did not proceed to make any consequential order superseding the reference, which he could have done under S. 19, Arbitration Act. The appellant then filed an application to this Court under S. 20, Arbitration Act praying that this Court might be pleased to order that the agreements be filed and make an order of reference to the arbitrator or arbitrators to be appointed by the Madras Chamber of Commerce in accordance with the Arbitration rules of the Madras Chamber of Commerce.

This application was opposed by the respondents on two grounds; (1) that the result of the prior proceedings, which culminated in the setting aside of the award by Chandra Reddi, J. put an end as it were to the arbitration reference, and (2) that the arbitration agreements were not binding on the respondent firm because the agreements had not been signed by both the partners of the firm. At the end of the counter-affidavit filed by the respondents it was stated that in any view of the matter, S. 20 of the Act could not be applied to the circumstances of the case.

It was not specified, however, what those circumstances were which prevented the application of S. 20. The application came on for disposal before Ramaswami J., who dismissed it. He did not agree with the contention of the respondents, that the application was not maintainable because of the prior proceedings and because the award had been set aside by this Court before. The learned Judge held that the arbitration agreements must be deemed to be subsisting and that, therefore, the application itself was maintainable unless the opposite party showed sufficient cause why the agreement should not be filed and an order of reference made to the arbitrator.

The learned Judge was of the opinion that there were three circumstances in the case, which constituted sufficient cause, namely, (1) that the arbitrator had misconducted the proceedings and this agency had lost the confidence of one of the parties and it would therefore be inequitable to compel that party to submit to arbitration by the Madras Chamber of Commerce; (2) that a suit had actually been riled and no application under S. 34, Arbitration Act had been made for stay of the suit, and (3) that further arbitration proceedings would only mean further loss of time and dissatisfaction and further proceedings to get that award set aside.