1927 (4) TMI 2 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the award made by the Committee of the Calcutta Baled Jute Association.
2. Applicability of the Indian Arbitration Act to the award made by the Committee.
3. Interpretation of the arbitration clause in the contract between the parties.
4. The power of the Committee to act as arbitrators or an umpire under the Indian Arbitration Act.

Detailed Analysis:

1. Validity of the award made by the Committee of the Calcutta Baled Jute Association:
The dispute arose from a contract dated 6th November 1925, which included an arbitration clause (Clause No. 17) stipulating that disputes should be referred to arbitration. The arbitrators appointed by the parties failed to agree, leading to the appointment of an umpire who made an award on 25th June 1926. The appellants appealed this award to the Committee of the Calcutta Baled Jute Association, which made a subsequent award on 23rd September 1926. The respondents applied to the Court to have this award taken off the file, arguing that it did not conform to the Indian Arbitration Act.

2. Applicability of the Indian Arbitration Act to the award made by the Committee:
Mr. Justice Pearson held that the award made by the Committee did not conform to the scheme of the Indian Arbitration Act and could not be filed under the Act. He opined that Sections 10 to 15 of the Act only recognized awards made by "arbitrators or umpire" and did not contemplate an award by a tribunal superior to the umpire. The appellants contended that the arbitration clause allowed for the Committee to act as a fresh set of arbitrators, and thus, their award should be recognized and filed under the Act.

3. Interpretation of the arbitration clause in the contract between the parties:
The arbitration clause in the contract allowed for disputes to be referred to two arbitrators, and in case of disagreement, to an umpire. Additionally, it provided for an appeal to the Committee of the Calcutta Baled Jute Association. The appellants argued that the Committee should be seen as a fresh set of arbitrators agreed upon by the parties. The respondents countered that the Indian Arbitration Act did not allow for such a series of awards and that the Committee's award could not be filed under the Act.

4. The power of the Committee to act as arbitrators or an umpire under the Indian Arbitration Act:
The Court examined precedents from similar cases, including Sassoon & Co. v. Ram Dutt and Surajmull Askaran v. Chandmull Mulchand, where contracts included arbitration clauses with provisions for appeals to committees. The Court also looked at English cases like In re Keighley Maxstead & Co. and Durant & Co., where similar arbitration schemes were upheld. The Court concluded that there was nothing in the Indian Arbitration Act preventing parties from agreeing to a submission that included a further submission to arbitration by a committee. The Committee's award could be considered as the final award contemplated by the parties and could be filed in Court.

Conclusion:
The Court held that the judgment and order of Mr. Justice Pearson should be set aside, and the appeal allowed with costs. The Committee of the Calcutta Baled Jute Association was deemed to have acted as a fresh set of arbitrators, and their award was valid and could be filed under the Indian Arbitration Act. The Court emphasized that the substance of the matter should be looked at, and the Committee's award was the final award agreed upon by the parties in certain eventualities.