Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Arbitration Act 1940 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Arbitration —Revocation—Power of Court—Periodic fluctuation of price, if an emergency--Arbitration Act, 1940 (10 of 1940) ss. 5,34— Working Manual of the East India Jute and Hessian exchange, Ch. IX. paras. 7(c), 11.The appellants as sellers of raw jute entered into forward contracts with the respondent jute mills to sell such jute to them. The contracts. being transferable specific delivery contracts, were entered into in the standard printed forms of the East India Jute & Hessian Exchange Ltd., which was an association recognised under the Forward Contracts (Regulation) Act, 1912, and thus were subject to the rules and bye-laws made by the Exchange which provided for arbitration of disputes by the tribunal of Arbitration of the Bengal Chamber of Commerce and Industry or the Indian Chamber of Commerce in Calcutta. The appellants failed to supply the stipulated jute within the time mentioned in the guarantee clauses. The respondents exercised their option under the rules aforesaid, cancelled the contracts and charged the appellants for the difference in price between the contract rate and the market rate prevailing on the dates of cancellation and on the appellants denying their liability applied for arbitration. The appellants thereupon applied to the High Court under s. 5 of the Arbitration Act, 1940, for revoking the authority of the arbitrator. There case in contemplated in Para 11, in Ch. IX of the Working Manual of the Exchange substance was that there was an emergency as due to scarcity of raw jute and speculation at the relevant time and the price. of raw jute shot up abnormally, this placed the buyers and sellers of raw jute in two conflicting camp, and the majority of the arbitrators in the panel of arbitration of the Bengal Chamber of Commerce and Industry being connected with the buyers of raw jute, the jute mills, were disqualified from acting as impartial arbitrators. The High Court held that no such emergent condition had been proved as would justify revocation of the authority of an appointed arbitrator. Held, that the normal periodical fluctuation in the price of raw jute could not constitute an emergency within the meaning of para. 11 in Ch. EX of the Manual since such fluctuations have been taken into consideration by those who entered into forward contracts. Such an emergency must be one which is abnormal and which none could foresee. It could not, therefore, be said that in the present case there was such a conflict of interest between sellers and buyers as would render the panel of arbitrators having a practical experience of the normal fluctuations of the market disqualified to act as impartial arbitrators. The object of ss. 5 and 34 of the Arbitration Act was the same, namely, to prevent arbitration, with this difference that an application under s.5 would lie if proceedings had not yet been commenced in Court whereas under s. 34 an application lay when they had commenced. But a Court would not lightly exercise its discretion to nt leave to revoke an arbitrator’s authority. Before it would do so it must be satisfied that'a substantial miscarriage of justice would otherwise take place. Parties would not be relieved froma tribunal of their own choice simply be- cause they feared that its decision might go against them, and the court had to base its decision on one or other of five grounds, namely, excess or refusal of jurisdiction by arbitrator, misconduct of arbitrator, disqualification of arbitrator, charges of fraud and lastly the existence of exceptional circumstances, In the instant cases there were no exceptional circumstances to justify the conclusion that the arbitrator was disqualified by bias due to conflicting class interest. The extension of time given to the buyers by the contracts beyond a month specified by para. 7(c) in Ch. IX of the Working Manual for delivering letter of authority did not bring the contracts materially into conflict with that provision nor could the absence of the expression "without any difference on both sides”, which occurred in the sold notes, from the bought notes make any difference to the rights of the parties. |
Judge | Hon'ble Mr. Justice S.K Das |
Neutral Citation | 1962 INSC 198 |
Petitioner | M/s. Amarchand Lalitkumar |
Respondent | Shree Ambica Jute Mills Ltd. |
SCR | [1963] 2 S.C.R. 953 |
Judgement Date | 1962-05-03 |
Case Number | 640 |
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