P L D 1969 Supreme Court 524 (PLP)

On the 29th of December 1956, the appellant entered into a contract with the respondent for the purchase of 1000 bale of jute N. C. cuttings, the delivery of which was to be taken between January and February 1957. The appellant failed to take delivery and the respondent, therefore, in accordance with the arbitration clause in the contract of purchase, filed a claim with the Dacca. Narayanganj Chamber of Commerce (hereinafter called the Chamber) for Rs. 32,000 against the appellant representing the short‑fall between the contractual price and the market price. In accordance with the Rules of the Chamber, the Registrar of the Tribunal of Arbitration issued notice on the appellant on the 3rd of April 1957, directing him to deposit Rs. 450 as costs of the proceedings and to file his statement of the case. The Registrar thereafter, on the 21st May 1957, in accordance with the Rules of the Chamber appointed arbitrators to deal with the claim of the respondent. The arbitrators gave an award on the 19th August 1957, in which the claim of the respondent was accepted to the extent of Rs. 30,

000. The award was filed in Court by the Registrar of the Tribunal for making it the rule of the Court. The appellant resisted this on the ground, inter alia that the award was a nullity since it had been made beyond four months of the date on which the arbitrators had entered upon the reference that is to say the day on which the notice was issued to the appellant by the Registrar. In the alternative it was urged that if the notice issued by the arbitrators was not to be treated as entering upon the reference by the arbitrators the proceedings resulting in the award were vitiated because no notice was issued by the arbitrators to the appellant. The trial Court passed a decree in terms of the award. An appeal was preferred against the decree by the appellant and the respondent preferred a cross‑objection as no costs had been awarded by the trial Court. The High Court dismissed the appeal and accepted the cross‑objection. Leave to appeal was granted to consider the questions raised in the Courts below as there was no decision of this Court on these important questions of law. The Arbitration clause in the Contract says "the sale is made in accordance with the terms and conditions laid down in the Pakistan Jute Association, Export Contract No. 3 (Dacca Bales) except for clause I of that Contract which is to be substituted by clause I as above". The relevant clause in the aforesaid Contract reads as follows:‑ "All matters, questions, disputes, differences and/or claims arising out of and/or concerning and/or connected with and/or in consequence of or relating to this contract whether or not the obligations of either or both 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 Dacca Narayanganj 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." Under rule V of the Rules of the Tribunal of the Chamber, the Registrar of the Tribunal is required, on receipt of an application for arbitration, to constitute a Board for the adjudication of the difference, disagreement or dispute forming the subject‑matter of the reference. Under rule IV, the Registrar has to take such steps as may be necessary to assist the arbitrators. It is on the authority of these powers that the Registrar wrote to the appellant to file his statement and to deposit Rs. 450 as costs of the proceedings. Mr. Asrarul Hossain has contended that as the reference to arbitration was to a corporate body, namely, the Chamber and the Registrar issued a notice calling upon the appellant to file his statement on behalf of that corporate body, the step taken by him amounts to "entering on the reference" within the meaning of clause (3) of the First Schedule to the Arbitration Act. Clause (3) of the first Schedule to the Arbitration Act provides that the arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the Arbitration Agreement or within such extended time as the Court may allow. The question that falls for determination, therefore, is when did the arbitrators in the present case enter upon the reference. It is true that the arbitrators named in the Contract were the Chamber. It has already been noticed that the Registrar is to take such steps as may be necessary to assist the arbitrators. The notice that was issued to the appellant calling upon him to submit his statement was an act in this regard and therefore cannot be termed as an act of the arbitrators. The arbitrators were appointed on the 21st May 1957 and by no stretch of imagination can it be said that the arbitrators had entered upon the reference before their appointment. The notice that was issued on the 3rd of April 1957, was a ministerial act performed by the Registrar of the Tribunal and we are unable to accept the argument of Mr. Asrarul Hossain that since he was an officer of the Chamber and the reference was to that Chamber, his action must be deemed to be an action of the arbitrators. The learned counsel for the appellant bas alternatively argued that if the notice issued by the Registrar is held to be not a notice by the arbitrators then the award must be deemed to have been made without any notice to the appellant. Rule XVI of the Rules of the Tribunal of Arbitration of the Chamber reads as follows:‑ "The dispute will be decided by the Board on the Written Statement of the parties and oral evidence will not be taken nor will the parties be entitled to appear, nor any formal hearing be held provided that the Board shall have power to take such evidence as, in its absolute discretion, it thinks proper and for such purpose the Board have, if it thinks fit, appoint a time and place for hearing such evidence. At such hearing none of the parties to the reference or their representatives shall be entitled to examine or cross- examine any witness or the other party or his representatives but the Board only shall have power to examine the witnesses, the parties or their representatives." The Board means the Arbitrator or Arbitrators. The learned counsel has not challenged the validity of this Rule. The point raised by him, therefore, is completely answered by the provisions of this Rule. The appellant in response to the letter of the Registrar dated the 3rd April 1957 filed his statement on the 27th April 1957 and took no steps to file any rejoinder to the statement of the respondent when called upon to do so by the Registrar by his letter dated the 13th May 1957. He can therefore make no grievance about the failure of the Arbitrators to serve any notice on him. These are the only points raised in this appeal and as we have found that they are without substance the appeal is dismissed with costs. K. B. A. Appeal dismissed.