LexRESERVE BANK OF INDIA versus S.S. INVESTMENTS AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
"' RESERVE BANK OF INDIA A v. S.S. INVESTMENTS AND ORS. AUGUST 14, 1992 [T.K. THOMMEN AND S.P. BHARUCHA, JJ.] B Arbitration Act, 1940: Sections 3, 8: Schedule I: Clause 4: Arbitra- + tion-Disagreement between arbitrators-Differing awards made by two ar- .,. bitrators-Umpire entering reference-Challenge to the validity of awards- Allegation of absence of joint deliberations and consultations between the c arbitrators before passing award-Held meeting of arbitrators before passing I award is not imperative-Parties to arbitration are not expected to know that! joint deliberations had taken place between arbitrators-On disagreement be- tween arbitrators Umpire was entitled to enter upon the reference. ~' D Umpire-Expiry of time to pass award-Written submission by par- ties-Categorical statement as to no objection for extension of time to pass award-Held there was waiver of objection to enter reference by the Umpire. : The appellant-Bank and the respondent-Company (Resp-1) entered into an agreement for sale of a property. Under the agreement the dis- E pules between the parties were to be settled by arbitration. A dispute arose between the parties and for its settlement the appellant-Bank appointed a former Judge (Resp-2) while the respondent-company appointed a mem- her of the Bar (Resp-3) as their arbitrators. Both the arbitrators entered· 111111'! upon the reference, appointed the Umpire (Resp-4), and beard the parties. Since there was disagreement between the two arbitrators both of them F passed their separate awards. In view of the differing awards made by ~ them the appellant-Bank requested the arbitrators to refer the matter to the Umpire. The respondent-Company objected to the Umpire entering: upon the reference on the ground that the awards were made without joint deliberations between the arbitrators, therefore the arbitration proceed- G ings were vitiated. In the proceedings before the Umpire counsel for both the parties made written submission stating that though the time to make the award. bas expired they have no objection for extension of time for the Umpire to' make the award. Subsequently, the respondent-Company challenged the H 871 872 SUPREME COURT REPOIHS (1992) 3 S.C.R. A validity of the arbitration pr~eedings before the Madras High Court which held that since there was no joint deliberation or consultation between the arbitrators before the passing of the awards, the awards passed by the arbitrators individually were invalid and the subsequent proceedings conducted by the Umpire were also not valid. Accordingly, the B High Court remitted the matte.r to arbitrators to pass awards afresh. In appeal to this Court, it was contended on behalf of the appellant- Bank that the awards individually made by the arbitrators and seilf·to the parties indicated that they could not agree and, therefore, the Umpire was entided to enter upon the reference. In the alternative, if the awards made · C by the arbitrators were not awards in law, the arbitrators had allowed their time to expire witi.out making an award, in which event also the Umpire was entitled to enter upon the reference under Clause 4 or the First Schedule to the Arbitration Act. Allowing the appeal and setting aside the judgment or the High D Court, this Court E F HELD:l. Parties to an arbitration cannot be expected to know that joint consultations or deliberations had taken place between the. ar- bitrators. 2. Regard must be had to the ordinary course of conduct of judicial and arbitration proceedings, especially considering the fact that one of the arbitrators was a former Judge and the other was a member of the Bar. · Discussions do ordinarily take place during the course of the arguments between counsel and the Judges or arbitrators. Questions are asked by the Judges or arbitrators which would indicate their minds to counsel and to each other. Discussions also, ordinarily, take place between the Judges or arbitrators inter se during the course of the hearings and immediately before or after the same. It is not, therefore, imperative that arbitratol'S should meet upon the conclusion of the hearings to discuss the matter and G agree to an award or agree to disagree in that behalf. ! 3, In the instant case it is not in dispute that both the arbitrators were present at all the meetings in the arbitration proceedings; That there had been divergent views· expressed even during
Excerpt shown. Read the full judgment & AI analysis in Lexace.