1982 (3) TMI 275 - HC - Indian Laws

Summary

Issues Involved:
1. Authority and jurisdiction of the Divisional Manager to represent the Orissa Forest Corporation.
2. Validity of the appointment of the arbitrator.
3. Adequacy of notice served to the respondent.
4. Allegations of bias against the arbitrator.
5. Compliance with the arbitration clause in the agreement.
6. Legal misconduct by the arbitrator.

Issue-wise Detailed Analysis:

1. Authority and Jurisdiction of the Divisional Manager:
The respondent contended that the Divisional Manager was not authorized to represent the Orissa Forest Corporation in legal matters, asserting that the appointment of the arbitrator was obtained through fraud. The court previously held that the Divisional Manager, being a signatory to the agreement, was a proper party. This issue was raised in the application under Order 9, Rule 13 of C.P.C., and it was determined that the Divisional Manager had sufficient authority to represent the corporation.

2. Validity of the Appointment of the Arbitrator:
The respondent argued that the arbitration clause specified that disputes should be resolved by the Chairman, Managing Director, or Chief Executive Marketing of the Corporation, and if they were unavailable or unwilling, the arbitration clause would be considered non-existent. The court found that the appointment of an outsider as arbitrator was not challenged initially and that allegations of bias against the Chairman were considered when the court appointed the arbitrator. The appointment was upheld as not being without jurisdiction, and the reference was deemed valid.

3. Adequacy of Notice Served to the Respondent:
The respondent claimed that proper notice was not given before the ex parte award was passed. The court examined the records and found that the arbitrator had sent notices on several dates, which were received by the Divisional Manager. The arbitrator's decision to proceed ex parte was based on the respondent's consistent non-appearance and lack of cooperation. The court held that the notices were sufficient and that there was no prejudice caused to the respondent.

4. Allegations of Bias Against the Arbitrator:
The respondent alleged that the arbitrator was biased as he was a retained lawyer for the appellant. The court reviewed the arbitrator's report and found that he had also acted as a lawyer for the respondent. No definite bias was established. The same points were raised in the Miscellaneous Appeal and the application under Order 9, Rule 13, C.P.C., both of which were dismissed. The court agreed with the findings that there was no bias.

5. Compliance with the Arbitration Clause in the Agreement:
The arbitration clause in the agreement stipulated that disputes should be resolved by specific officials of the Corporation. The court noted that the appointment of the arbitrator was not initially challenged, and the arbitration clause did not explicitly prohibit the appointment of an outsider if the named officials were unavailable or unwilling. The court held that the arbitration clause was still operative and that the appointment of the arbitrator was valid.

6. Legal Misconduct by the Arbitrator:
The respondent claimed that the arbitrator committed legal misconduct by not issuing proper notice before proceeding ex parte. The court found that the arbitrator had followed the rules of natural justice by giving reasonable notice and opportunities to the respondent, who failed to appear. The arbitrator's actions were deemed in compliance with legal standards, and there was no legal misconduct.

Conclusion:
The appeal was allowed, and the judgment of the learned Subordinate Judge regarding the absence of proper notice and jurisdiction about the reference was set aside. The award of the arbitrator was made a rule of the court. No costs were awarded.