M.J. Xavier vs N. Chidambaram and Another

N.S. Ramaswami, J.—This Civil miscellaneous appeal is agent the dismissal of a petition to set aside an award u/s 30 of the Arbitration Act.

The appellant before us had entered into a contract with the President of India for collecting, conveying and delivering parcels etc., from or to

madras Central Railway station goods shed and other places. Clause 22 of the contract provided that all matters in dispute between the parties

shall be referred to arbitration as mentioned therein. The contract was terminated by the Union of India at a particular stage. The dispute between

the parties related to amounts due to the appellant before us in respect of works already done and the claim of damages that he made on the

ground that his contract has been wrongfully terminated by the Union of India. Admittedly, these matters were referred to arbitration, and the

Arbitrator gave his award dated 14-8-1961.

In that award, the Arbitrator said that the appellant is entitled to moneys at a particular rate regarding certain bundles that he handled and at a

different rate in respect of certain other articles that he handled and further held that the appellant was not entitled to any damages on the ground of

termination of the contract. He also found that the security deposit made by the appellant with the Union of India shall be refunded to him.

However, he did not allow any interest for the amounts awarded to the appellant in respect of works which he had already done. The Arbitrator

filed the awarded in Court (City Civil Court, Madras) and his petition came to be registered as a suit. On notice being given to the respective

parties of the filing of the award in Court, the appellant filed O.P. No. 2 of 1962 on the file of that Court u/s 30 of the Arbitration Act praying for

the setting aside of the Award on several grounds. The Second Assistant Judge, City Civil Court, Madras, dismissed the petition holding that there

were no grounds to set aside the award and granted a decree in favour of the appellant in terms of the award. Not satisfied with that, the appellant

has filed the present civil miscellaneous appeal.

The learned counsel for the appellant contends that the Arbitrator has misconstrued the terms of the contract in fixing the rate in respect of the

packages handled by the appellant and that amounted to legal misconduct as contemplated u/s 30(a) of the Arbitration Act. The second argument

of the learned counsel is that the Arbitrator had failed to decide certain questions that had been referred to him and that, therefore, the award is

invalid and liable to be set aside. After hearing the learned counsel, we are satisfied that neither of the grounds urged by the learned counsel is

available to him. The Arbitrator has not given any reasons in his award in coming to the conclusion regarding the rate at which the appellant is

entitled to claim in respect of packages handled by him. Therefore, there is absolutely no force in the contention that the finding of the Arbitrator

regarding the rate is an error of law on the face of the record.

We do not see force in the contention of the learned counsel that the Arbitrator has really made out a new contract for the parties and that the

finding of the Arbitrator regarding the rate cannot be supported on the terms of the contract. Though it appears that the appellant has urged before

the lower Court that the Arbitrator has misconducted himself, such an argument is not put forward before us. The only contention as far as this

point is concerned is that there is legal misconduct, in that the Arbitrator misconducted the proceedings. Unless the appellant is in a position to

show that there is any error of law on the face of the record resulting in legal misconduct. Therefore, on the first point raised the appellant should

fail.

The second point is also without any merits. As we said, the matter referred to the Arbitrator for his decision were as to what amount the

appellant is entitled in respect of work already done by him and what if any, were the damages payable to the appellant in respect of termination of

the contract. The Arbitrator has given specific findings with regard to these matters. As already noted, the Arbitrator has found that in respect of

certain packages the appellant should be paid at a particular rate and in respect of certain other packages he shall be paid at a different rate. That

answers the first matter in dispute, namely, what amount was due to the appellant in respect of the work already done by him.

Regarding the only other matter in dispute, namely, whether the appellant is entitled to damages for termination of the contract the Arbitrator has

given a specific finding that the appellant is not entitled to any such damages. However, the learned counsel contends that in the statement filed

before the Arbitrator a specific question as to whether the termination of the contract was wrongful or not had been raised and this question has

not been specifically answered by the Arbitrator. It is contended that the failure of the Arbitrator to answer such a question makes the award

invalid. We are unable to agree. The learned counsel referred to a passage in Halsbury''s Laws of England, 3rd Edn. Vol. 2 at page 57, wherein it

is stated that if the arbitrator fails to decide all matters referred to him, it would amount to ''misconduct''. But this does not help the learned counsel

in this case, for, as we said earlier, the Arbitrator has not failed to decide any of the matters referred to him.

In deciding the dispute as to whether the appellant was entitled to damages for termination of the contract, the question whether the termination

was wrongful or not might be relevant. But the mere fact that the Arbitrator has not said anything specifically as to whether the termination was

wrongful or not, does not mean that the Arbitrator has failed to determine the matter in dispute. It is needless to stress that the matter in dispute

was not whether the termination was wrongful or not though it may be a relevant issue, but whether the appellant was entitled to damages for the

alleged wrongful termination. This matter has been specifically decided by the Arbitrators and this covers the issue of termination being wrongful or

otherwise. In Santasila Devi v. Dhirendranath, AIR 1963 SC 1977 one of the disputes between the parties was whether one of the parties was

entitled to an account from the other party. That dispute had not been specifically decided by the Arbitrator. But the award was a compendious

one deciding as to how much a particular party is entitled. The Supreme Court observed at page 1680, column 2 paragraph 10:--

Before dealing with this point it is necessary to emphasise certain basic positions. The first of them is that a Court should approach an award with

a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal........................ Besides it is obvious that unless the

reference to arbitration specifically so requires the arbitrator is not bound to deal with each claim or matter separately, but can deliver a

consolidated award. The legal position is clear that unless so specifically required an award need not formally express the decision of the arbitrator

on each matter of difference.

Therefore, it is clear from that even regarding the matters in dispute there need not be separate findings unless the matter is specifically referred

to in the arbitration reference. In the present case, of course, the dispute as to whether the appellant is entitled to damages for the alleged wrongful

termination of contract has been specifically referred to. But the fact remains, the Arbitrator has given a finding regarding this dispute, though he has

not supported his finding with reasons. It is not necessary for an Arbitrator to give reasons in support of his finding. Under these circumstances, the

contention of the learned counsel that the arbitration award suffers from the defect of failure to decide a matter that had been referred to arbitration

fails. We see no merit in the civil miscellaneous appeal, and the same is dismissed. But, in the circumstances, there will be no order as to costs.

Appeal dismissed.