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TMI Blog1966 (2) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to the arbitrators, elected by the parties and their decision on the subject will be final . T. M. S. Muni filed an action under Section 20 of the Arbitration Act in the 10th Court of the Subordinate Judge, 24 Parganas, Alipore praying that the agreement be filed in court. The said action was registered as Title suit No. 40 of 1963 in the 10th Court of the Subordinate Judge, 24 Parganas, Alipore with T. M. S. Mani as the plaintiff in the suit and Messrs Teamco Private Ltd, as the defendant therein, The suit was contested by the defendant. Two principal points were urged on behalf of file defendant in the trial court. The first point was that the suit was not maintainable in law, as it was not open to the plaintiff to proceed under Section 20 of Chapter III of the Arbitration Act, the plaintiff having previously taken steps under Section 8 of Chap, it or the said Act. The second point argued was that the arbitration agreement in question was vague and uncertain and the same, therefore, could not be enforced in law. The learned subordinate Judge held against the defendant on both the points and decreed the suit in favour of the plaintiff. Hence this appeal has been filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntends that the provision in the arbitration clause of reference of such disputes to the arbitrators elected by the parties is equally vague and uncertain. Mr. Bhabra argues that on a construction of the said clause it is not possible to find out how such arbitrators are to be elected. Mr. Bhabra submits that the word 'elect' means according to Shorter Oxford English Dictionary To pick out, choose; to choose in preference to an alternative; to choose by vote for any office or position . Mr. Bhabra contends that the said clause is clearly vague as the same does not give any indication as to how the election or the choosing of such arbitrators is to be made by the parties. According to Mr. Bhabra on a reading of the said clause it cannot be inferred how the arbitrators are to be elected or chosen, whether they are to be chosen by common consent of both the parties or whether any party can choose its own arbitrators without the consent of the other party. Mr. Bhabra has argued that an arbitration agreement should be strictly construed and should be construed with regard to the language used and Mr. Bhabra submits that on such construction the court should hold that the arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elected to proceed under Chapter II of the Arbitration Act, has precluded himself from bringing the action under Section 20 which is in Chapter III of the said Act. In support of this contention Mr. Bhabra has referred to us Clause (1) of Section 20 of the Arbitration Act which reads as follows:-- Section 20(i). Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject-matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them instead of proceeding under Chapter II may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in Court. 11. Mr. Bhabra has also cited a decision Venkata Surya Rao v. Venkata Rao. Kumarayya, J. in delivering judgment in that case has held Thus, in order to attract the provisions of Section 20, three conditions are necessary: (i) that the arbitration agreement must have been entered into before the institution of any suit with respect to the subject matter of any agreement or any part of it; (ii) there must have arisen a difference to which the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not definitely convey any idea as to the number of arbitrators to be appointed and as to how they should be appointed and that those matters are left to be agreed upon between the parties at a future date. Mr. Mukherjee argues that such an arbitration clause is not, however, vague and uncertain because the parties by agreement can agree to the number of arbitrators to be appointed and to the manner of their appointment and in the event of the parties failing to agree, the arbitration will proceed in accordance with the provisions of the Arbitration Act. According to him Rule 1. of the First Schedule to the Arbitration Act which provides for reference to a sole arbitrator will then apply. In support of his contention Mr. Mukherjee has relied on a decision of the Division Bench of this Court . The arbitration clause in the said agreement which was the subject-matter of construction in that case was worded as follows: All disputes whatsoever arising in or out of or in connection with the said contract or arising in any way whatsoever in connection with any other contract for the supply of goods by the company to the buyers shall be referred to arbitration at Calcutta. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anguage used in the arbitration clause in question is, The matter should be referred to the arbitrators elected by the parties. It is to be noted that the arbitration clause in the agreement in question uses the expression arbitrators and the use of the expression arbitrators clearly expresses in my view an intention that the reference win not be to a single arbitrator and therefore expresses a different intention and rules out the applicability of Rule 1 of the First Schedule to the Arbitration Act which provides for reference to a sole arbitrator. In the case cited by Mr. Mukherjee I find that at p. 490 Chief Justice Chakraborty has observed as follows:- The Rule contemplates an agreement which is silent as to the number of arbitrators. If the agreement attempts to say that the appointment will be otherwise than by consent of all the parties it cannot possibly do so without making some reference to the number. It will have to say that the arbitrator or arbitrators will be appointed by one or some of the parties or by a third party and as soon as it does so, it will go outside the rule. If it speaks of the appointment of the arbitrator , there will be no scope for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which are not there in the said clause will have to be imported to give any such meaning. 19. In the case of Ganpatrai Gupta v. Moody Brothers Ltd. reported in (1950) 85 Cal LJ 136, S. B. Sinha, J. observes at p. 143 Arbitration agreements should be strictly construed. Clear language should be introduced into any contract which is to have the effect of ousting the jurisdiction of the Courts and compelling the parties to have recourse to arbitration for decision of disputes . It will be helpful in this connection to refer to the observations of Viscount Maugham in the case of G. Scammel and Nephew Ltd. v. H. C. and J. G. Ouston 1941 AC 251. His Lordship observed as follows In order to constitute a valid contract the parties must so express themselves that their meaning can be determined with a reasonable degree of certainty. It is plain that unless this can be done, it would be impossible to hold that the contracting parties had the same intention; In other words, the consensus ad idem would be a matter of mere conjecture. In the same case Lord Wright in his speech has observed that The object of the Court is to do justice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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