# JUGGILAL KAMLAPAT v. GENERAL FIBRE DEALERS LTD

- **Citation:** [1962] Supp. 2 S.C.R. 101
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** K. N. Wanchoo, J.C. Shah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/juggilal-kamlapat-v-general-fibre-dealers-ltd-2582
- **Pages:** 18

## Headnote

Arbitralion-.!bnard set aside-Reference to a.rbitration not
l1_uperseded-Second reference to arbitration, if permissibleArbitration Act. 1940 (10 of 1940), s. 19.
Disputes which arose between the parties with respect
ta carrying out a contract were referred to the arbitration of
the Bengal Chamber of Commerce in accordance with an
agreement to refer disputes as and when -::hey arose to the
arbitration of the Chamber. The award of the Tribunal of
Arbitration was set aside by the High Court. On an application for referring the matter for arbitration de novo another
tribunal was constituted which made a fresh award. The
questions which arose for decision were whether after the first
award was set aside the reference to arbitration was exhaus·
ted and the arbitrator had become functus officio and whether
without a fresh arbitration agreement it was not possible to
have the same dispute decided again _by the arbitrator.
Held, that the arbitrator became functus officio after he
gave the av.:ard but that did not mean that in no circumstances could there be further arbitration proceedings where an
award was set aside or that the sam~ arbitrator could never
have anything to do with the award with respect to the same
dispute.
Section 19 of the Arbitration Act empowered the Court
not to supersede the reference and to leave the arbitration
agreen1ent effective even when it set aside the award and there ..
upon it would depend upon the terms of the arbitration agreement whether the arbitration proceedings could go on with
respect to the same dispute or with respect to some other
dispute arising under the arbitration agreement.
Barangore Jute Ftu0tory v. H1das Chand Rupchand. (1958)
62 C.W.N. 734, Rallis India Ltd. v. B. V. Manickam Gheuy,
A.I.R. 1956 Mad. 369, and Firm Gulab Rai Girdhari Lal v.
Firm Bansi Lal Hansraj, A.LR. 1959 Punj. 102, approved.
Mordu v. Palmer, ( 1870) 6 Ch. App. 22 and Sutherland
and Go.
v.
Hannevig Bros.
Ltd. [1921] I K. B. 336,
referred to.
In the present case the first award was set aside but as
the reference had not been superseded and the arbitration
1961
December 12.
1961
J.,,UolK.,,.._,
••
G-ol Filn1
n,,,,u,, LU.
,,..,.;,
102 SUPREME OOURT REPORTS fl962] SUPP.
agreement subsisted it w:u open to the Chamber to appoint
another tribunal under r. X of the Chamber Rules.
CIVIL APPKLLA.TB JURISDICTION: Civil Appeal
No. 309 and 526 of 59.
Appeals by special leave from the judgment
a.nd orders aad decree dated Augiut 27, 1958,
November 24, 1958, and March 10, 1958, of the Calcutta High Court, in Award Caae No. 103of1955
a.nd Appeal from Original Order No. 26 of 1956 respectively.
N. O. Ohatterje.e and B. P. Malieshwa~, for the
appellant (in C. A. No. 309 of 59).
H,N. Sanyal, Additional Solicitor-General of India,
S. K. Gupta and D. N. Mukherjee, for respondent (in
C. A. No. '309 of 59).
N. G. Ohatterje.e, !rf. G. Poddar and S. N. Jlukerji,
for the appellant (in C. A. N'0. 52.5 of 59).
H. N. Sanyal, Additional Solicitor-General of India,
A. N. Sinliu and P.K. -,O,fukherje.e, for the ri>spondent
(in C. A. No. 525 of 59).
1961. December l:l. The Judgment of the
Court was deliverc,d by
WANCHOO, J. -These two appeals by special
leave from the judgments of the C'llcutta High
Court raise a common question of law and will be
dealt with together. It will be convenient to set
out the facts of a peal 309 and deal with them in
connection with the point raised on behalf of the
appellant. These facts are that a contract was en·
tered into betwoen tne parties for supply of cornsacks on August 29, 1951. The contract contained au
arbitration clause in the following terms .
•·All matters, questions, dieputes, difl'-
reuce and/or claim• arising out or and/or oonuerning and/or in connect.ion with and/or in
oonsequence of or relating to thls oontraot
whaLher or not the obligation of either or both
2 S.C.R.
SUPREME COURT REPORTS
103
parties under this contract be subsisting at the
time of such dispute and whether or not this
contract has

## Text

2 S.C.R.
SUPREME COURT REPORTS
101
JUGGILAL KAMLAPAT
v.
GENERAL FIBRE DEALERS LTD.
(AND CONNECTED APPEAL)
(K. N. WANCHOO and J.C. SHAH. JJ.)
Arbitralion-.!bnard set aside-Reference to a.rbitration not
l1_uperseded-Second reference to arbitration, if permissibleArbitration Act. 1940 (10 of 1940), s. 19.
Disputes which arose between the parties with respect
ta carrying out a contract were referred to the arbitration of
the Bengal Chamber of Commerce in accordance with an
agreement to refer disputes as and when -::hey arose to the
arbitration of the Chamber. The award of the Tribunal of
Arbitration was set aside by the High Court. On an application for referring the matter for arbitration de novo another
tribunal was constituted which made a fresh award. The
questions which arose for decision were whether after the first
award was set aside the reference to arbitration was exhaus·
ted and the arbitrator had become functus officio and whether
without a fresh arbitration agreement it was not possible to
have the same dispute decided again _by the arbitrator.
Held, that the arbitrator became functus officio after he
gave the av.:ard but that did not mean that in no circumstances could there be further arbitration proceedings where an
award was set aside or that the sam~ arbitrator could never
have anything to do with the award with respect to the same
dispute.
Section 19 of the Arbitration Act empowered the Court
not to supersede the reference and to leave the arbitration
agreen1ent effective even when it set aside the award and there ..
upon it would depend upon the terms of the arbitration agreement whether the arbitration proceedings could go on with
respect to the same dispute or with respect to some other
dispute arising under the arbitration agreement.
Barangore Jute Ftu0tory v. H1das Chand Rupchand. (1958)
62 C.W.N. 734, Rallis India Ltd. v. B. V. Manickam Gheuy,
A.I.R. 1956 Mad. 369, and Firm Gulab Rai Girdhari Lal v.
Firm Bansi Lal Hansraj, A.LR. 1959 Punj. 102, approved.
Mordu v. Palmer, ( 1870) 6 Ch. App. 22 and Sutherland
and Go.
v.
Hannevig Bros.
Ltd. [1921] I K. B. 336,
referred to.
In the present case the first award was set aside but as
the reference had not been superseded and the arbitration
1961
December 12.
1961
J.,,UolK.,,.._,
••
G-ol Filn1
n,,,,u,, LU.
,,..,.;,
102 SUPREME OOURT REPORTS fl962] SUPP.
agreement subsisted it w:u open to the Chamber to appoint
another tribunal under r. X of the Chamber Rules.
CIVIL APPKLLA.TB JURISDICTION: Civil Appeal
No. 309 and 526 of 59.
Appeals by special leave from the judgment
a.nd orders aad decree dated Augiut 27, 1958,
November 24, 1958, and March 10, 1958, of the Calcutta High Court, in Award Caae No. 103of1955
a.nd Appeal from Original Order No. 26 of 1956 respectively.
N. O. Ohatterje.e and B. P. Malieshwa~, for the
appellant (in C. A. No. 309 of 59).
H,N. Sanyal, Additional Solicitor-General of India,
S. K. Gupta and D. N. Mukherjee, for respondent (in
C. A. No. '309 of 59).
N. G. Ohatterje.e, !rf. G. Poddar and S. N. Jlukerji,
for the appellant (in C. A. N'0. 52.5 of 59).
H. N. Sanyal, Additional Solicitor-General of India,
A. N. Sinliu and P.K. -,O,fukherje.e, for the ri>spondent
(in C. A. No. 525 of 59).
1961. December l:l. The Judgment of the
Court was deliverc,d by
WANCHOO, J. -These two appeals by special
leave from the judgments of the C'llcutta High
Court raise a common question of law and will be
dealt with together. It will be convenient to set
out the facts of a peal 309 and deal with them in
connection with the point raised on behalf of the
appellant. These facts are that a contract was en·
tered into betwoen tne parties for supply of cornsacks on August 29, 1951. The contract contained au
arbitration clause in the following terms .
•·All matters, questions, dieputes, difl'-
reuce and/or claim• arising out or and/or oonuerning and/or in connect.ion with and/or in
oonsequence of or relating to thls oontraot
whaLher or not the obligation of either or both
2 S.C.R.
SUPREME COURT REPORTS
103
parties under this contract be subsisting at the
time of such dispute and whether or not this
contract has been terminated or purported to
be terminated or completed shall be referred
to the arbitration of the. Bengal Chamber of
Commerce under the rules of its Tribunal
of Arbitration for the time being in force and
according to such rules the arbitration shall be
conducted."
Disputes arose with respect to carrying out of the
contract and on October 25, 1951, the respondent
referred these disputes to the arbitration of the
Bengal Chamber of Commerce (hereinafter referred
to as the Chamber). That case was numbered 217-©
of 1951 in the Chamber's records. On April 17,
1952, the Tribunal of Arbitration made an award
disallowing the claim of the respondent. This
award was filed in the High Court. On May 25,
1953, the award was set aside on the ground of
misconduct on the part of the arbitrators by a
learned Single Judge. That order was taken in
a.peal and on.July 8, 1954, the appeal wa8 dismissed.
Later, leave to appeal to this Court was refused and
thus the order of the learned Single Judge setting
a.side the award finally stood.
Soon after the award had been set aside by
the learned Single Judge, the respondent addressed
a letter to the Chamber on September 7, 1953. It
was said in this letter ·that as the award in case
No. 217-G of 1951 had been set aside by the High
Caurt, the respondent begged to refer the matter
for arbitration de novo and enclosed its statement
of the case.
Thereupon another tribunal was constituted under the rules of the Chamber to decide
the disput afresh. The appellant appeared before
the tribunal and contended that it had no jurisdiction to make an award on a second reference in the
same dispute. The tribunal, however, proceeded
to decide the reference and made the award on
1961
Juggil:il Kamlopa•
v.
General Fibre
Dealers Ltd,
Wanthto J,
llldl
'11uilol Kan&la;at
v,
c,....iFiM1
DHJ.rs Ltd.
w.-...J,
104 SUPREME COURT REPORTS (1962) SUPP.
March I ;i, 1955. This timl' the award wu in·
favour of the respondent. Thereupon on August
4, 1955, the appellant made an applioation to the
High Court praying that the award be set aside.
In the alternative, ~he appellant prayed that the
award be declared null and void and the arbitration
agreement between the parties be superseded on
the ground that the second reference was incompetent.
The application was opposed by the respondent and its oontention was that this was not a
second reference, and what the respondent wanted
was that the Chamber should in the event that had
happened take up the dispute again and make a
proper award. Reliance in support of th·· plea
that such a course was permissible was plaoed on
behalf of the respondent on the decision of the
Calcutta High Court in The Baral'l{Jol'e Jute Factory
Cu. Lt,d. v . . lle,.ssrs. Hui.as Chand Rupcharu1{1).
The loamed Si1111le Judge relied on the decision in The Ram1!.gore Jute Factory ('J and held that
from what the respondent said to the Chamber i,ts
letter of September 7, 1953, it was reasonably clear
that all that. it wanted was that the Chamber should
in the event that had happened take up the dispute
again and make a proper award. It could not therefore be held because of some langqage used in the
letter that the respondent was making a fresh reference. Consequently, it was held that the Chamber
had jur isdictiun to dooide the dispute after the earlier
aw~d had been'~t aside and what the respondent
had aaked for wa.8 for the continuance of the original
reference, which h&d not been supel'l!eded. The
learned Sirtgle Judge then went into the question
whether there wa.11 souh misconduot aa would justify
setting aside the award and held that there were no
grounds made out which would juetUy the 11etting
aside of the aw-atjl. Consequently, the application
for setting aside the award was dismiaaed. Thereafter the llppellant ea.me to th;~ Ccinrt for special
,.) (19SR)6'C W ~ 73i
2 s.c.R.
SUPREME COURT REPORl't-i
10.J
leave, &hich was granted; and that is how the
matte.r has come up befort: us.
The main question that has been argued
before us is tliat the first award was set aside on May
25, 1953, the reference was exhausted and the arbitrator had become funct·us officio and it was therefore
not possible without a fresh arbitration agreement
to have the same dispute decided agian by the
arbitrator, irrespective of whether the letter of
September 7, J 953, amounted to a second reference
or was a mere request for continuation of the
proceedings in the original reference, which had
proved abortive as the award originally made had
been set aside.
Reliance i'l this connection is
placed on what are called certain fnndainental
principles governing all arbitrations. It is urged
that once an award is wholly set aside, the arbitrator is Junci·us ojf ico and thereafter he cannot function
again to decide the same dispute. This is said to be a
fundamental principle of all arbitrations, and reliance is placed on a passage in "Russel on Arbitration"
(15th Edu., p. 298), where the effect of setting aside
an award is stated thus-"If an award is wholly set
aside, the arbitrator is functus officio." Reliance
is also placed on Mordue v. Palmer ('), where it was
held-
"An arbitrator having signed his award is
functus officio and cannot alter the slightest
error in it, even thoug such error has arisen
from the mistake of the clerk in copying the
draft. The proper course in such a case is to
obtain an order to refer the award back to
the arbitrator."
Reliance is also placed on S1~therl&nd and Company
v. Hannevig Brothen Limited(').
That was a case
under the English Arbitration Act of 1889 which
provided that an arbitrator could correct in a.n
a.ward any clerica.l mistake or error from any
(!) ( 1870) 6 Ch. App. 22.
(2) [1921] I. K.B. 336,
1901
Juggil .I Kamlapa
v.
Genera! Fibre
DtalerB Ltd.
Wan.choo J.
1981
•.,,u.i Kamiopat
v.
a-al Fib•1
/)fa/,,, Ud.
W ...... J.
106 SUPREME OOURT REPORTS [1962] SUPP.
accidental slip or omiBBion and had thus varied
the rule laid down in Mordue's case('). It was
however held in that rase that the correction made
by thtl arbitrator was not justified under the Arbitration Act.
These cases in our opinion have not
much bearing on tho question l1efore us. It is true
that generally speaking, an arbitrator is functus
officio after he has made the award; but this only
means that no power is left in the arbitrator to make
any change of substance in the award that he had
made (except in certain circumstances which have
been provided in tho law). What we have to see
however are the scheme and the provisions of the
Arbitration Act, No. X of 1940 (hereinafter called
the Act), which govern the proceedings in arbitration
in this case.
These provisions are to be found in
Chap. II of the Act which deal with "arbitration
without intervention of Court."
Sections 3 to 7 deal with various aspects of
arbitration agreements with which we a.re
not
concerned in the present case. Sections, 8, 11 and 12
deal with the power of a court to appoint or remove
arbitrators or umpire. Section1 9 and IO deal·with
the right of a party to appoint a new arbitrator or
sole arbitrator and a.IEO with the appointment
of an umpire. Section 13 deals with the power of
the arbitrator and s.14 provides for the signing
oi the a.ward and giving notice in writing to the
parties of the making and signing of the award and
filing the same in court. Section 15 gives power
to the court to modify the a.ward in the .iircumstanoes mentioned therein. Section 16 gives power to
the court to remit the a.ward for reconsideration
under certain circumstances. Section 17 provides
for delivery of ju~mont in terms o~ the award
where the court sees no ca.use to .-emit tho award or
to set it asitle. Section 18 provides for making int.erim
orders. Section 30 which is in Cha.p.V sets out the
grounds on which an a.ward may be set aside.
(I) (1870) 6 Ch. App. 22.
2S.C.R.
SUPREME COURT REPORTS
Finally, we come to s.19, which is the section on
the interpretation of which the decision of this case
depends.
Section 19 reads as follws :-
"Where an award has become void under
suh-section(3) of section lG or has been set
aside, the court may by order supersede the
reference and shall thereupon order that the
arbitration agreement shall cease to have effect
with respect to the difference referred."
Before we consider what. s.19; provides we might
advert to two. matters. In the first palce, it is not
disputed before us that the English Arbitration Act
does not contain a provision similar to s.19; the
consequence of this is that the decisions of English
Courts may not be of much assistance on this particular aspect of the matter before us.
Secondly,
there was a parallel provision in para. 15(2) of 8ch.
II of the Code of Civil Procedure before 1940 as to
the order to be passed by the court when setting
aside an award, which was in these terms :-
" (2) Where an award becomes void or
is set aside under cl use ( l), the court shall
make an order superseding the arbitration
and in such case shall proceed with the suit."
It will be seen from this provision that when
a court set aside an award under Sch.
II the reference had to be superseded also, and the court was
enjoined to proceed with tht' suit, the provision being
contained in that part of Sch. II which dealt with
arbitration in suits: But the provjsion also applied
to cases covered by para. 1 i read with para. 19 and
also by impli8ation to arbitrations outside court
un<ler para 21.
Bnt s. Hl of the Act has dearly
made a departure from
the
parallel provision
contained in Sch. II, para. 15 ( 2) and we have
therefore to see what is the extent of the dep1irture
made by it.
It is clear frvm s. la that there are three matters
which hav<' to be bome in mind in arbitration
1961
Juggilal Kamlapal
v.
General Fibre
Dealers Ltd,
lVanchoo J.
IHI
Ju11ilo/ Kuoio/al
••
0.rtn•l Fibr1
Dt•l•rs Lui.
.......__
W-.laaJ.
108 l'UPRJ:ME C-OURT REPORTS [1962J BUPP.
proceedings.
There is first the arbitration lljp'ee·
ment. Next comes the refrrence to arbitration
and lastly the sward. Section 19 provides iflkr
alia that where an award has been Ht aside, the
court may by order supersede the reference and
shall thereupon order that the arbitration agreement
shall cease to have effect w i 1 h respect to the difference referred. The sectior. therefore leaves it to
the discretion of the court \\hen it decides to set
a.side an a.ward, whether to supersede the reference
or not. It may not supersede the reference at all in
which case though the a.ward may be set aside the
reference wlll
continue. But if it
supenedee
the reference
it has
also~ inconsequence
to
order that
the
arbitration
agreement
on
the oasis of which the
reference wu made
would cease to have effect with respect to tihe
diff Prence referred. It i1 only tJierefore when tihe
court orders supereellllion of the refereuoe that tile
consequence follows that the arbitration agreement
ceases to ha.Te effect with r68Jlect to the aubjeot
matter of the reference
The intention of the
legislature in making this change in the coneequ~
enoes to follow the 1etting aside of an a.ward is
clear in as much as the provision recognises that
there may be different kinds of arbitration agreements, some uf which might be exhausted by thr
reference already made and the a.ward following
thereon v.hich has been set aside while others may
be of a more comprehensive nature and may
contemplate continuation of the reference relating
to the ea.me dispute or 11ucooBSive referenoee relating to different disputes covered by the arbitration
:i.greement. The legislature has th.irefore giTen
discretion to tho court under s.19 to decide when
it sets aside an award what the conaequenoe1 of
its order setting a.side the award 1':111 be. If the
· court finds that the arbitration agreement ia of the
kind which exhaust. itself after the firai reference is mae• M if it finda on aooount of the reuona
2 S.C.R.
SUPREME COURT REPORTS
109
which have impelled it to Ret aside the award that
there should be no further reference of tbe dispute
to arbitration, the court has the power to supersede
the reference and thereupon order that the arbitration agreement shall cease to have effect with
respect to the diff0rence referred. On the othere
hand if the court, finds that the arbitration agreement is of a general nature and contemplates continuation of the reference with respect to the same dis•
pute or successive references with respect to dift'ernt
disputes arising under th.e terms of the arbitration
agreement it may not supersed" the reference with
the result that the reference as well as the arbitra'
tion agreement on which it is based survives. In
such a case there can in our opinion be no doubt,
that where the reference and the 'wbitration agreement survive the same dispute may go before the
arbitrators again provided there is machinery provided in the arbitration agreement which makes this
possible. It will thus be seen that the discretion
vested in the court under s. l 9 depends upon the
nat11re of the arbitratic~1 agreement in particular
cases and it is on a consid{·ration of those terms that
the court may decide in one case to supersede the
reference and order the arbitration agreement to cease
to have effect after taking into account the reasons
which have impelled it to set aside the award and
another not to set aside the reference with the
resul• that the reference and the arbitration agreement subsist; and if the arbitration agreement
provides for machinery to have further arbitration
on the same dispute or other dispute' arising under
the arbitration agreement it is permiss'ble to have
further arbitration on the same dispute or other
disputes.
The same discretion is given to the court
with respect to arbitration under Chap. III of the
Act dealing with "arbitration with intervention of
a court where there is no suit ptinding," as s.20(5)
provides that after the arbitration agreement has
been ordered to be filed, the arbitration shall proceed
1961
Jugt!,ilal Karnf,ip.
v.
Gen ·1al Fibre
Dealers ltd.
Wa11c'100 J.
11/dl
l•c;1a1 K...Jop•I
••
011M1al Fibrt
DtaUrj U,.
110 SUPREME OOURT REPORTS [1962) SUPP.
in aocordaoce with, and shall be governed by, the
other provisions of the Act so far as they can be
made applicable. Further we find that the same discretion has been given to the court in the matter of
arbitration in suits provided under Chap. IV, was
s. 25 provides that "the provisions of the others
Chapters shall, so far as they can be ma.de applicable, apply to arbitration under this Chapter."
The proviso to s. 2fi gives discretion to the court
in any of the circumsta.nCJ3s mentioned in ss. 8,
IO, 11 and 12, instead of filling up the vacancies or
making the appointments, to make an order super·
sedinl.(
the
arbitration and proceed
with the
suit, and when' the court su~rsedes the arbitration under A. HJ it i;hall proceed
with the suit.
The sc·beme of the Act therefore is whether the
a.rbit1 ation is unc.ier Chap. JI, Chap. HI or Chap.
IV, to give discretion to the court to decide whether to · supersede the r!'fcrence or not. Where
it de~ides to supersede the refer!'nce it hll.l' to order
that the arbitration agreement shall cease to h'lve
effect with respect to the difference rt•fcrr!'d ; but
where it decides not to supersede the reference and
the reference and the arbitration agreement subsist
and if there is machinery provided in the arbitration
agreement for making a further reference or for continuing the same reference, further arbitration oa.n
take place.
The contention therefore urged on
behalf of the appellant that once the l\ward is ee\
aside the arbitrator becomes functu.~ officio and
consequently there can be no further reference
with respeot to ihe
dispute
decide'1 by the
nward which is set asirle, must fail in view of
the specific provisions of e. 19 of the Act.
'Ve have already said that generally ol'eaking, the arbitrator becomes f1111ctus <iffir·io after he
ha.s given the award; hut t.hat riot's not in our
opinion mean that irr no cir<'umstanccs can thl're
ho further arbitmtion prn•·eedings "herP an award
2
S.C.R. SUPREME COURT REPORTS
111
is set aside or t!iat the same arbitrator can never
have anything to do with tb.e award wit!i respect
to the same dispute.
Section 13 ( d), for exa-uple,
gives power to the arbitrator to. correct in an
award any cleriral mistake ot error arising from
any accidental slip or omission. Further s.16 gives
power to the court to remit the award to the arbitrator for reconsideration. Therefore, when it is
said that the arbitrator is generally fanctus· officio
after he has made the award, it only means that
he cannot change that award in any matter of
substance himself.
But that does not take away
the court's power to remit the award
for reconsideration under s. 16 or to refuse to supersede
the reference even though the award is set aside
leaving it to the parties to take such
further
action under
the
arbitration
agreement for
further arbitration
if it
is
possible so to
do under the terms of a particular arbitration
agreement.
We are therefore of opinion that
whatever may be the position in the absence of a
provision similar to s. 19 of the Act there can
be no doub~ thats. 19 gives power to the court
not t.o supersede the reference and so leave
the
arbitration agreement effective ev!Jn when it sets
aside award and thereupon it will depend upon the
terms of the arbitration agreement whether arbitration proceedings can go on with respect to the
same dispute or with respect to some other disputes
arising under the
arbitration agreement. This
was the view taken in the Barangore Jute Factory
case{'). Similar view has been taken in Rallis India
Lt,d. v. B.V. Manickam Ghetti & Go.(') and in Firm
Guktb Rai Girdhari Lal v. Firm Ban.si Lal Hansrajl').
We think that this view is correct.
It is not in dispute that the reference was
110t superseded in this case when the award was set
aside in May 1953. It will therefore depend upon
(1) [1958] 62 C.W.N. 734.
(2) A.].R. 1956, Mad. 369.
(3J A.l.R. 1959, Punj. l 02.
1961
Juggilal Kamlc.pat
v.
Ge--n~l Fibre
Dealers Ltd
WanchQo J,
1P61
Jflflilal K.?,,,Japat
••
GtMfal Fi.brt
n"''''' Lli.
w .... .1.. J.
ll2 SUPREME COURT REPORTS [1962] SUPP.
the terms of th!\ arbitration agr<'ement in this
case whether it was possible to have
further
arbitration with respect to the same dispute .
We have already Ret out the term in the contract
relatin~ to arbitrat.ion and it is clear that that
term iH very wide in its qm plitude and contemplates reference of disputes as and when they arise
betwe<"n the partir,s to the Cham her. Further as
the Chamber is constituted the arbitrator in this
term of the contract. and as the Chamber consists
of a large number of members and
has its own
ru Jes for constituting arhitral tribunals. It is in
our apinion quito possible on the tl'fms of such
!ln arhitration agr<'emont to constitute another
tribunal to decide th~ same dispute where the
reference remains pending and
has
not been
set aside under s. 19, provided there is machinery
fur appointing rlifferent pMsons as arbitrators under
tho rnl<'s of the ChambN. It is however urg(•d that
this is '.l. spcoml reforcnce of the same dispute and
this at qny rate is not contemp!11terl by the term
relating to arbitr1ttion in the eontract. We aro not
1mpres3ed by this argument. Stress in this connection has been laid on the letter of Sepfomber 7,
195:1, in
which
the
respondent. said
that it
begged to refer the matter for arbitration de novo.
Those words do not in our opin;.on Rhow that a
si>cond reference was being made of the dispute.
The letter begins by "aying that the Chamber was
aware that tbe previous award had been set aside.
It waa in thoae circumstanres that the respondent
told the Chamber that it begged to refer the matter
for arltitration de ·wn·n.
In the context this can
only mean that th(' respondent was asking the
Chatnbl'r
to
take up
the
refprence
again
a.s
th1·
reference
had not brt>n
superseded
and
arranire
to
continue the
arbitration
proceedings further.
The only qui·stion therefore
2 S.C.R.
SUPREME COURT REPORTS
113
that will arise is whether under the rules of the
Chamber it was poRsible to constitute another
tribun<Ll to consider this dispute again. If that is
possible, we fail to see why the r.rbitration proceedings should not go on further as the reference was
not superseded in this case, and the arbitration
agreement subsisted.
This brings us to the rules of the Chamber
relating to the appointment of arbitral tribunals.
It is urged on behalf of the appellant that there is
no provision in these rules for appointment of an
arbitral tribunal where an award made by an earlier
tribunal is set aside say, for misconduct. If this
contention is a justified it will certainly not be
possible to appoint :mother arbitral tribunal to
decide the reference after the award made on it by
the earlier tribunal is set aside.
Reliance however
is placed on behalf of the respondent on rr. V, VII
and X made by the Chamber for the appointment of
arbitral tribunals. It appears that no reliance was
placed on r. V in the High Court;
reliance however was placed on rr. VII awl X in the High Court.
The High Court held that r. VII justified the
appointment of the tribunal in the present case,
though it was of the view that r. X would not
justify it. The appellant on
the other hand
contends tha.t none of the three rules ftuthorises
the appointment of a fresh tribunal after an award
is set aside and therefore there is no machinerv
un'.!er the term' of the arbitratio11 ~greement by
which the a_rbitration can be farther carried on, it
being not drnputed that the earlier tribunal whose
award had been set aside on account of misconduct· could not bn again appointed.
Rul" V(l) provides for an application for arbitration. Rule V(2) lays down that "on receipt of
such application the Registrar shall constitute a court
fot the adj11dication of the dispute."' It is urged on
1961
Juggital Kamlapat
v.
Gv,, uif Fibre
f)erl/rrs _f,td.
Wan(,hao J.
19111
J"Uilal Kamlop•t
v.
Gential Fih1e
Dialers Utl
Wanchoo J,
114 SUPREME OOURT REPORTS [1962) SUPP.
behalf of the respondents tha.t a fresh tribunal could
be constituted under r. V (2) a.fter the a.ward of the
earlier tribunal bad been set a.side, a.s the Registrar is authorised to constitute a court on receipt
of an application bv the Chamber under r. V (I).
We a.re of opinion that this contention is not well
founded.
Ruic V(2) applies to the first appointment after the receipt of the a.pplicat ion a.nd that
appointment was ma.de in this case and the award
of the tribunal appointed under r. V (2) was set
a.side. Rule V (2) rloes not in our opinion contemplate a second appointment after the a.ward of the
court appointed under it on receipt of the application ha11 been set a.side.
The re~pondent cannot
sustain the appointment of a fresh tribunal under
r. V (2).
Rule VII has been pressed into service by the
High Court in this connection and it ha.s been held
on 1 he basis of the Barangare Jute Factory's case (1)
th;;t r. VII justified the appointment of a fresh tribunal in a ca.sJ where an a.ward made by the earlier
tribunal is set a.sirie.
In that case the High Court
was conscious that it was stretching the rule in
applying it to the situation where an award is
set asirle.
Rule VII says that "if the Court have
allowed the time or extended time tu expire without making any award, and without ha Ying signifit,d to the Registrar thoit they cannot agree, the
Registrar eha.11 constitute in manner aforesaid another Court which shall proceed with the arbitration
and shall be at liberty to a.ct upon tlw record or the
pro<"eedings as then existing and on the <Widence,
if any, then taken in the arbitration or to t·>m·
mence t,he
arbitration
de ·ii.om."'
ltule XXV
make:;
prov1s10n
that th" award · shall
be
macle
within
four
months
or within
such
extendod
time as ru:iy be a.greed to between tlie ·
partiPs to the reforence.
Huie VII obviously rofers
to " case where tho time or the extended time
(I I
i,1•158) Ci:l c_ w N. 734.
"
2S.C.R.
SUPREME COURT REPORTS
115
iJ.llowed to the tribunal has been allowed to expire;
ib 0annot refer to a 1laS<' where the tribunal has
made the award within the time fixed but later that
award is set asidP by court. It would in our opinion
be stretching the language of r. VII too far to make
it applicable to a case like the present. We cannot
therefore agree with the High Court that r. VII
justified the appointment of a fresh tribunal in tile
present case.
This brings us to r. X. The High Court
thought that this rule could not apply. Rule Xis
in these terms :-
"If any appointed arbitrator or umpire
neglects or r9fuses to act or dies or become
incapable of acting
the
Regietrar shall
substitute and appoint a new arbitrator or
umpire as the case may be in manner aforesaid and the Court so reconstituted shall
proceed with the arbitration with liberty to
act on the record of the proceedings as then
existing and on the evidence, if any then
taken in the arbitration, or to commence the
proceedings de novo."
We are of opinion that it was open to the Registrar
under this rule · to a.ppoint a. fresh tribunal because
the earlier tribunal had become incapable of acting
in view of the fact that its award had been set aside
on the ground of misconduct. lt has been urged on
behalf of the appellant that the words "becomes
in0apable of acting" qpply only to physical inability
to act and in particular stress is laid on the collocation of words where these words follow the word
"dies". We are however of opinion that these words
c:mnot take their colour from the word "dies" and
are a separate category by themselves and must be
interpreted on their own.
Now thAre is no doubt
that generally speaking an arbitrator may become
inaCpa.ble of acting bPcause of some physical cause,
for example, he may fell ill or may go mad and so
19~1
Juzgila/ Ka•nlaf'tt
V.
General Fibre
Dealers Ltd.
Wa111ho I.
11141
J"UUai Kamlapat
v.
G11Ural Fibrt
Dtaln-s Ltd.
w .. , ... J,
116 SUPREME COURT REPORTS (1962) SUPP.
on. But we do not think that these words only
refer to physics.I incapacity; in our opinion, they
refer to a.ny kind of incapacity, which may supervene after the appointment of the arbitrators, even
to an incapacity from before but which was not
known to the parties, or in this case to the Chamber
before they are appointed. We may in
this
connection refer to the opinion of Huesel ("Russel
on Arbitration", 15th Edn., p. lll7),-where dealing
with similar words in s. IO(b) of the Enizlish
Arbitration
Act of 1950,
it has been said a.a
followa :-
"It would appear that the word 'incapable'
in section I O(b) must refer to some incapacity
a.rising after the date of tho appointment, or
not known to the parties at that date."
Clear)~ therefore, the words "becomes incapable of
acting ' do not merely refer to physical incapacity
but to any kind of incapacity which arises after the
appointment or which Wiil! there before the appointment but was not known to the parties or to the
Chamber in this case. Take, for example, the case
of persons appointed by the Chamber to decide a.
dispute; after tho appointment,
one arbitratior
acquires an interest in the subject-matter of thP, dispute. Obvidualy such a person must be held to have
become incapable of acting tven though there is no
queation of any physical incapacity on his pa.rt. We
are therefore of opinion that the words "becomes
incapable of acting" in r. X are of wide amplitude
and do not refer tb cases only of physical incap11city
but to any kind of incapacity a.rising a.ftn the
appointment or even before the appointmer t
11
provided it WM not known to the parties, or to the
Ch'UI!ber in the present case. We cannot therefore
agree with the High Court that r. X will not
apply to the present case.
What has happened in this case ie that the
previous tribUnal made an award. That award hae
28.C.R.
SUPREME COURT REPORTS
117
been set aside on account of misconduct. In the
circumstances we are of opinion that the previous
tribunal has become incapable of acting as arbitrator to decide this dispute because of its misconduct,
Further as the reference has not been superseded
and the arbitr3tion agreement, subsists, it was in
our opinion open to the Chamber, on the request
of the respondent, to appoint another arbitral
tribunal under r. X. Therefore, as there is a
machinery by which fresh arbitrators can be
appointed according to the terms of the arbitration
agreement read with the rules of the Chamber and
as the reference has not been superseded, the
appointment of a fresh tribunal and the carrying on
of the arbitration further were within the terms of
the arbitration agreement.
No other point has been urge'd on behalf of
the appellant in this appeal
to challenge the
correctness of the decision of the High Court.
Therefore, appeal No. 309 must fail.
Turning now to appeal No. 525, it is enough
to say that it is similar to appeal No. 309 in all
respects except one. The difference is that in this
case the appellant objected to the appointment of a
fresh tribunal and an application was made under
s .. 33. of the Act paying for the relief that no
arbitration agreement existed
after the earlier
award had been set aside and therefore there could
be no further arbitration. For reasons which we
have already given this contention must fail, for it
is not in dispute that this appeal also when the
earlier award 'v.as set aside there was no supersession of the reference and the arbitration agreement is in the same terms as in the other appeal.
What happened in this case was that t.he learned
t;ingle Judge allowed the application and revoked
the authority of the Chamber to arbitrate. There
was then an appeal by the present respondent
1961
Jug:ilal Kam/apat
Y.
GeTUr"l Fibre
Dealers Ltd,
Wanchoo J.
IHI
J"lliW Iram/apld
v,
Gt111ral Filu1
DlllUrs Ltd.
118 SUPREME OOUR'l' REPOR.1.'S [1962) stJP:t>.
which was 11-llowed on the basill of the Barongor~ Jvie
Factory case('). Thereupon the present appeal ha.a
been brought to this Court by 1pecial leave. It has
been contended on behalf of the appellant that the
order under s. 33 was not appealable in view of the
provisions of s. :l9 of the Act and therefore the
High Court ha.cl no jurisdiction in appeal to set
aside the order of the learned Single Judge. This
point a.s t.o jurisdiction was not taken before the
appeal court nor has it been takl'n in the special
leave petition to this Court or in the statement of
case. It seems that the appeal was entertained in
the High Court on the view that an a.pp<>al lay
under the Letters Patent from an order of a 8ingle
Judge. Eveo if we were t(> entertain this ~rgument
the respo00.n* 1'ill a.. M&iltl io milk epeci&l
leave to appeal against the iird41rofthe SiQgle Judge
and we will ~ justified having rt·garcl to the course
of events and the view expressed in the companion
appeal in granting leave after condoning thP delay
and in passing the same order which has bern passed
by the High Court in appeal. Technical requirements of procedure may of course ho fulfilled by
following the course suggested but no Wlt'lful purpee1
Will be served thereby. For re&aons whieb We
have already giv.en the order of the appeal court ill
right. There is no re&eon to .interfere with it ..W
this appeal Will also have to be dismieled.
We therefore dismiss the appealti with con.-
one set of hearing cost.a.
Appsal d'-'-d.
(I) (1958) 62 C.W.N. 73i.