1980 PLP 890 (CLC)

"Miscellaneous Application No. of 19 . In the matter of the Arbitration Act, 194.0, and an arbitration between A. B. of and C. D. of (2) In an arbitration under Chapter III or IV) Suit No. of 19- A. B.

Plaintiff versus C. D.

Defendant In the matter of arbitration between the following special case is, pursuant to the provisions of section 13 (b) of the Arbitration Act, 1940, stated for the opinion of the Chief Court of Sind :- (Here state the facts considerly in numbered paragraphs). The questions of law for the opinion of the said Court are :- First whether

Secondly, whether

Dated the 19 (Sd.) ARBITRATOR. If this was the only objection I would have entertained this reference and answered the questions raised therein but there are certain other objections which 1 would presently discuss. It is well settled that under section 13 (b) of the Act only questions of law involved in the dispute before the Arbitrator can be referred to the Court for opinion. The question of law must be imminent in the dispute in the sense that its decision will help the arbitrator, in making a true and just award and not transcendent. The question involved should be such that the arbitrator finds it difficult to decide it for himself and the decision when given in the opinion of the Court will help and assist him in making the award and not such that it would defeat his jurisdic tion to make the award. Therefore, the question whether the arbitrator has jurisdiction or not cannot be the one which could be said to be involved in dispute between the parties and which can be referred to the Court by the arbitrator for its opinion under section 13 (b) of the Act, for section 14 (3) of the Act requires that the Court's opinion shall be added to and from part of the award and if the opinion of the Court :. that there is no arbitration agreement at all or that the arbitrator has no jurisdiction to decide the dispute then thereafter no award can be made by the arbitrator and the arbitrator cannot function. I may here refer to a decision by P. B. Mukharji, J. in Clive Mills Ltd. v. Swalal Jain (A I R 1957 Cal. 694) wherein the learned Judge in paragraph 10 of the judgment made the following observations "Therefore questions of law which go to the very root of the jurisdiction of the arbitrators themselves to sit as Arbitrators, to conduct the arbitration proceedings, and to make the award as Arbit rators cannot, in my opinion, be asked by the Arbitrators by the procedure of a statement of case under S. 13 (b) read with S. 14(3) of the Arbitration Act, 1940. The true interpretation, then, of the word `involved' in S. 13 (b) of the Arbitration Act is that the questions of law must be imminent in the dispute in the sense that their decision will help the Arbitrators in making a true and just award and not transcendent. Transcendental questions of law which transcend and override the jurisdiction of the Arbit rators to make the award do not in my opinion, come within the true interpretation, of the word involved' in S. 13 (b) read with S. 14 (3) of the Arbitration Act." I am aware that contrary view has been taken by a Division Bench of Hyderabad High Court in BRldey Jagidishwarayya and others v. Kotagiri Tejalingam and others (A 1 R 1950 Hyd. 3). I may here reproduce the relevant observations :- "Really para. 11 of Sch. 2, Indian Civil P. C. or S. 550, Hyderabad Civil P. C. applies only when the jurisdiction of the arbitrator is not in dispute or doubt; when it is in doubt or dispute the arbitrator is fully competent and indeed it is his duty to refer the matter to the Court. Ratna Mudaliar v. V Manga Mudaliar A I R 1926 Mad. 762 - 95 L C 581, Champ sey Bhara & Co. v. .livral Balloo Spinning & Weaving Co. Ltd. A I R 1923 P C 66 : 47 Born. 578 and Kankia Lal v. Narain Singh 31 1 C 700 A I R 1915 Lah. 253 will show that when there is a dispute between the parties to arbitration regarding the jurisdiction of the arbitrator, the ultimate authority to decide the question in the Court and there is nothing wrong in the Court coming to the help of the arbitrator with its advice and directions when he comes to the Court in a difficulty." But, firstly, this decision takes into consideration the provisions of paragraph 11 of the Second Schedule of the Code of Civil Procedure, 1908 which have been repealed by the Arbitration Act, 1940 and which provide that "upon any reference by an order of the Court, the arbitrator or umpire may, with the leave of the Court state the award as to the whole or any part thereof in the form of a special case for the opinion of the Court, and the Court shall deliver its opinion thereon, and shall order, such opinion to be added to and to form part of the award". It is obvious that these provisions are not in pari meteria with the provisions of section 13 (b) of the Act, particularly, they do not contain the provisions for referring a question of law involved in the case for the opinion of the Court. Secondly, it appears to be based on general consideration of the provisions of the Civil Procedure Code relating to arbitration before their repeal as reflected by observations of the learned Judge that when there is a dispute between parties to arbitration regard ing the jurisdiction of the arbitrator the ultimate authority to decide the question is the Court. Lastly the cases relied upon by the learned Judge have no bearing or direct bearing on the question under consideration. In Ratna Mudaliar and another v. C. Viriaranga Mudaliar, the question under consideration was the status of four brothers and their interest in certain property and further question was the maintainability of the suit brought by two brothers against the remaining one after the death of one of them. No provisions of the Arbitration Act, 1940 much less the provisions of section 13 (b) of the Act or even the provisions of paragraph I I of the second Schedule to the Code of Civil Procedure came under consideration in this judgment. Obviously, reference to this case in the judgment is erroneous. In Champsey Bhara & Co. v. Jivrai Balloo Spinning & Weaving Co Ltd. it was observed :- "The question of whether an arbitrator acts within his jurisdiction is of course, for the Court to decide but whether the arbitrator acts within his jurisdiction or not depends solely upon the Clause of reference." No opinion of the Court was sought in the above-mentioned case by the arbitrator on the question whether he had jurisdiction or not to decide the dispute. A Court has jurisdiction to decide such a question not under S. 13 (b) of the Act but under other provisions of the Act. In Kanhia Lal v. Narain Singh the Lahore High Court simply said that "Ground No. 6 (c) would he technically good ground for revision, if it really disclosed an irregularity, for it is concerned with the action of the Lower Court, but we can see nothing objectionable in the Court's helping the arbitrators with advice and orders when they came to it in a difficulty." From the judgment it is not clear as to what was the ground in respect of which the above-quoted observation was made. But it is clear that these observations were not made on the relevant provisions of section 13 (b) of the Act. Under section 13 (b) of the Act, the arbitrator has power to state special case for opinion of the Court on any question of law involved in the proceedings before him but in submitting a question of law under clause (b) of section 13 of the Act, the arbitrator must find affirmatively all facts on which the question of law depends. (See North and South Western Junction Railway Company v. Assessment Committee of the Brend ford Union ((1888) 13 A C 592), Larrinaga v. Societe Franco-American ((1928) 92 L J K B 45) and Ferguson v. Norman ((1837) 4 Bing, (N C) 52). In the first mentioned case Lord Halsbury observed :- "He must find what in his judgment the value is. All he can remit to any Court to assist him is a question of law, and he must in that case affirmatively find the facts upon which the question of law depends. I am, therefore, of opinion, my Lords, that your Lordships should avoid establishing a precedent which has never, I believe, hitherto been adopted, namely, of giving directions to the arbitrator how he should arrive at the fact." Examined in the light of the above discussion so far as the first question is concerned it cannot be answered for it is not a question involved in the dispute before the arbitrator because an opinion expressed thereon cannot form, part of the award. So far as questions Nos. 2, 3 and 4 are concerned the facts on which these questions are based have not been found and stated by the learned arbitrator to enable the Court to decide the question of law arising out of those findings of facts. These questions, therefore, cannot be answered. For all these reasons I hold that this reference is not maintainable. Accordingly it is rejected. M. Y. M. Reference rejected.