Chandavarkar, J.:— Both the preliminary point and the point on the merits raised in this appeal turn upon the question whether the arbitrators have decided that the submission to them included the matter now in dispute between the parties. In other words, the question is — Have the arbitrators decided that they have jurisdiction to decide the matter as part of the terms of the reference to arbitration? Davar, J., has indeed held that they have decided nothing; but that is clearly wrong. The contention raised before the arbitrators by the respondent Ahmedbhoy Hahibbhoy's solicitor, Mr. Hormusjee, was that the respondent was entitled to claim damages from the Insurance Companies for the loss suffered by him owing to deterioration of the machinery consequent upon the neglect of the Companies to take proper care of it after they had taken possession of it, and that this claim was part of the submission. The Insurance Companies denied that the claim in question formed part of the reference. The meaning of the decision of the arbitrators upon that preliminary question is, to my mind, plain. They substantially be Id that, whatever conclusion they might ultimately arrive at after hearing evidence on the claim, they had jurisdiction to, take evidence and decide whether Ahmedbhoy was entitled to any, and if so what, damages for the specific loss alleged.
What the arbitrators have, then, finally decided is, that they have jurisdiction over the matter now in dispute that it is competent for them to enter into the merits of the dispute after taking evidence and to adjudicate upon it.
Davar J.'s order virtually compels the Insurance Companies to submit to the jurisdiction of the arbitrators, whereas those Companies complain that, having regard to the terms of the reference, no such jurisdiction exists. The order decides a question of their right. They say that they have a common law right to have the dispute decided in the ordinary way — in a Court of law. Davar, J., decides that they have not, but that the arbitrators have jurisdiction to decide it. The order is, therefore, a judgment within the meaning of clause 15 of the Letters Patent.
Passing to the merits, Davar, J., seems to me to have failed to perceive the real question at issue. He thought what he had to deal with was a case in which the complaint was merely that the arbitrators were committing an error of law by admitting irrelevant evidence. But in reality the admission of evidence by the arbitrators was complained of by the Insurance Companies not as an independent ground for grievance but as the result of an unwarranted jurisdiction assumed by the arbitrators. It was not the admission of inadmissible evidence that was the grievance: but the taking cognizance of a dispute not within the terms of the reference was complained of. The question, therefore, was — were the arbitrators exceeding or have they exceeded their jurisdiction? The answer to that depends upon a proper construction of the terms of the reference.
In construing the agreement to refer to arbitration we ought to bear in mind one cardinal principle — viz., that by a submission to arbitration a party deprives himself of the right accorded to him by common law to have the dispute to which the submission relates decided by a Court of Law.’ Therefore, it must clearly appear from the terms of the submission that with reference to any point arising the party has so deprived himself. Here the dispute referred related to damages or loss from fire, whereas the claim on which the arbitrators were asked to adjudicate and which they have held they have jurisdiction to decide, in addition to the loss or damage from fire, is the loss or damage consequent on the tortious conduct of the Insurance Companies after the fire had been extinguished. Mr. Inverarity has before us attempted to show that what his client wants to do before the arbitrators is to prove that this latter loss is in substance loss from fire. But that was not the case made before the arbitrators, and I do not think that the loss alleged can be included in loss from fire on any reasonable view of the case, because the deterioration of machinery from neglect on the part of the Insurance Companies to take care of it is not an inevitable or direct consequence of the mischief by fire. It is only where mischief arises from fire in fire insurance cases and from perils of the sea in maritime insurance, and the natural and almost inevitable consequence of that mischief is to create further mischievous results, that under-writers become responsible for the further mischief so incurred See Pollock B, in Montoya v. London Assurance Company.
The question, whether before the arbitrators or before Davar, J., was by no means one of discretion. It was in my opinion, one of excess of jurisdiction in the arbitrators.
Mr. Inverarity has raised the point that the petition before Davar, J., ought to have been dismissed because it was not signed by all the nineteen petitioners, that this appeal is by but one of the Insurance Companies, and that the other Companies are not parties to it. This ground would have required serious consideration if we had to revoke the submission to arbitration: but as the order we have decided to pass is at present no more than an intimation to the arbitrators of our opinion on the question of their jurisdiction, it is immaterial whether all or some of the Insurance Companies are formally parties to the proceedings in this Court. As to the other objection that, even so far as the petition is by one Company, it is signed by one of its officers without any authorisation as required by law, the defect is a mere irregularity which can be cured, if necessary, by the Company putting in a power of attorney showing the authority given to the signatory. And this irregularity does not affect the merits of the case.
The result is that the order of Davar, J., must be discharged with costs, in both his Court and this, on the respondent; and that the arbitrators should be informed that, in the opinion of this. Court, their jurisdiction extends only to the dispute relating to loss or damage from fire under the terms of the policy in each case, and not to the question of any loss or damage alleged to have arisen from the neglect of the Insurance Companies to take care of the machinery after the fire had been extinguished and the Companies had entered upon possession under clause XI of the Policy.
Batchelor, J.:— I concur: but as I am differing from my brother Davar I should like briefly to explain the reasons for my opinion.
The only question, it appears to me, is what have the arbitrators decided, if they have decided anything?
The learned Judge below was of opinion that they have decided nothing, and, therefore, he declined to interfere with their order. Now, their order is one of which it is not easy to be quite confident as to the meaning, but upon the best consideration that I can give to it; it seems to me to decide that the reference to the arbitration does include the question whether the plaintiff is entitled to damages on the ground that the Companies having gone into possession were guilty of negligence in not cleaning and not protecting the machinery. If that is the meaning of the order, then I think the appellants must succeed, for, as to the preliminary point that no appeal lies, that order on my interpretation is a judgment since it goes to jurisdiction by enlarging the scope of the arbitration submission and by depriving the appellants of their rights to have these matters decided by a suit: see Hadjee Ismail Radjee Hubbeeb v. Hadjee Mahomed Hadjee Joosub. And if the appeal is competent, then,
I think, it ought to be successful for the policy, the agreement to refer and the terms of the reference all satisfy me that no claims on account of negligence by the companies after they had, as alleged, gone into possession, were included in the submission. That I think was limited to the loss by fire (including of course the loss by water in extinguishing the fire) and it is plain that a claim on this footing must be limited somewhere and that it cannot conveniently embrace all possible damages, however remote, which could by ingenuity be traced up to some connection with the fire as the ultimate causa sine qua non.
Now here the plaintiff's case is that the Companies were in possession from October 1906 to August 1907 at least, and it seems to me impossible to hold the damages arising by reason of their negligence throughout this prolonged period are such damages as are properly claimable in pursuance of the contract of insurance, for whereas this contract refers only to loss by fire, those damages would arise from a totally different origin, an origin which, it seems to me, is wholly distinct and separable from the fire, namely a neglect by the Companies of some duty imposed on them after the loss by fire or water had become an accomplished fact.
As to the technical objections which have been urged by Mr. Inverarity I am of opinion that they are all of a merely formal nature; that there is no substance in them and that they ought no? to be allowed to stand between us and the decision of this appeal on its merits.
For these reasons, I concur with my learned colleague as we are assured that the arbitrators will gladly give effect to any expression of opinion from us.
The appellants must have their costs.
Order reversed.
B.N.L