Indian Kanoon - Search engine for Indian Law

In the forward (Vaida) F.O.R., or Ex-godown contract forms supplied by the Association, the following arbitration clause shall be inserted and it shall read thus: ' Any dispute arising out of this contract shall be referred to arbitration through the Madras Yarn Merchants' Association according to the rules that are in force or hereafter come in force.

3. Rule 5 prescribes the first step for the invocation of arbitration and runs as follows:

Any party to a dispute shall apply in writing to the Secretary of the Association filling up the form prescribed by the Association. Such application shall be accompanied by a plaint and necessary papers, letters and documents relating to the dispute along with a fee of Rs. 25.

We hold that it is quite reasonable that the date of filing of the case in the Association shall be taken to determine the limitation.

5. The learned Judge took the view, however, that under Section 37(3) of the Arbitration Act, the criterion date for limitation was the date on which the first respondent was served with the notice through the Secretary. He held the claim to be time-barred and that there was an error of law on the face of the award which he accordingly set aside. As 1st April, 1945, was a Sunday there was a delay of one day according to the finding of the learned Judge, who for purposes of service applied Section 42 of the Arbitration Act, read with Section 27 of the General Clauses Act (X of 1897). It is not necessary to consider that portion of his judgment as I am of the opinion that assuming Section 37(3) applies to this case the arbitrators were correct in their finding of law that the invocation of the arbitration under Rule 5 of the arbitration bye-laws by the undisputed filing of a plaint on the 29th of March must be held to be the date on which the arbitration must be " deemed to have commenced " within the meaning of Section 37(3) and to constitute the criterion date of limitation.

7. "Arbitration agreement " is defined in Section 2(a) of the Act as a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not.

In Chaitram Ram Bilas v. Bridhichand Kesrichand (1915) I.L.R. 42 Cal. 1140 in which a dispute was referred to-arbitration to the Bengal Chamber of Commerce, it was held that its Association rules were imported into the contract and were binding on the parties. I have no doubt that the arbitration agreement contemplated by Section 373) of the Arbitration Act in the present case is the entire set of arbitration bye-laws in which the specific arbitration clause in Rule 4 is embodied and which all the members of the association have bound themselves to follow. These rules prescribed certain procedure for the invocation of arbitration, namely, an application to the Secretary of the Association notifying the Association as a whole of the invocation of arbitration accompanied by a plaint, and the arbitration must be deemed to have commenced under Section 37(3) on that date. Mr. Radhakrishniah has stressed service " on the other parties " under Section 37(3) as being imperative but the other parties to the arbitration agreement are all the members of the association and not merely the two disputants themselves.