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Nusserwanjee Pestonj... v. Meer Mynoodeen Khan ...
Judgment Summary — John Patteson, J. (Regulation VII of 1827)
Factual and Procedural Background
This matter came before their Lordships under Regulation VII of 1827 (India). The central dispute was whether a deed of submission to arbitration and the resulting award conformed to the requirements of that Regulation so as to give the award the force of a decree of the Zillah Court.
The principal procedural posture is that their Lordships were asked to advise Her Majesty on objections to recognition/enforcement of the arbitration award under the Regulation. The opinion references an original decree of the Sudder Court (which had directed that the award be taken off the file of the Zillah Court) and a subsequent decree of the Sudder Court (which their Lordships set aside). Their Lordships ultimately advised restoring the original Sudder Court decree and allowed costs subsequent to the first decree, including the costs before their Lordships.
The technical objections identified in the record were: (1) the deed of submission omitted any specification of the time within which the award was to be made; (2) the deed of submission omitted sufficient statement of the nature and extent of the matters referred to arbitration (although the original deed was said to have petitions attached); and (3) there were further objections as to whether the award was final.
Legal Issues Presented
- Whether the submission and the award fall within the terms of Regulation VII of 1827 so that the award has the force of a decree of the Zillah Court.
- Whether omission of a specified time within the deed of submission (for making the award) prevents the award from being enforceable as a decree under the Regulation.
- Whether omission in the deed of submission of the nature and extent of the matters referred to arbitration defeats the award's force as a decree under the Regulation.
- Whether the parties' consent (either to omit the time or otherwise) can supply or cure a statutory condition required to create the jurisdiction conferred by the Regulation.
- Whether other objections (for example, regarding finality of the award) are ripe for decision by their Lordships on the record before them.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Ansell v. Evans (7 Term, 1) | Principle that parties cannot, by consent, confer upon a court a jurisdiction which statute or regulation alone vests; a parol submission not within the Statute could not be validated by consent. | The court relied on this authority to support the view that the consent of parties cannot supply or waive statutory requisites for jurisdiction under Regulation VII of 1827; therefore, the omission of statutory particulars (such as time) cannot be cured merely by the parties' agreement. |
Court's Reasoning and Analysis
The Court began from the overarching principle that when jurisdiction is conferred by statute or a regulation upon specified terms, those specified terms must be complied with in order to create the jurisdiction. If the statutorily prescribed conditions are not met, the jurisdiction does not arise.
The Court examined Regulation VII of 1827, concentrating on section 1 (and particularly clause 3 of section 1), which prescribes that a deed of reference shall show: the names of arbitrators; the nature and extent of matters referred; the date of reference; the time within which the award is to be given; the signatures of the parties and two witnesses; and the parties' consent to abide by the award, among other particulars. The Regulation also provides a form but expressly states that the deed need not follow that form; nonetheless the deed must "contain the matters, and be framed according to the rule specified."
The Court rejected the contention that the requirement to indicate the time for the award is merely directory (i.e., not mandatory). The reasoning was that the time requirement is listed among several particulars that the Legislature expressly required to be contained in the deed; to treat the time as merely directory would be to render the rest of the mandatory specification nugatory and to allow parties to disregard statutory requirements that were plausibly intended to prevent delay (for example, the old practice of procrastinating through Punchayet procedures).
The Court also rejected a narrower reading that the time requirement existed only to serve section 7 (which provides for staying a suit pending arbitration while the time for award has not expired). The court found that such a construction was artificially narrow and inconsistent with the evident purpose of the Regulation to guard against undue delay in arbitration procedures.
The Court considered (and accepted) the principle from Ansell v. Evans: consent of the parties cannot supply jurisdictional requirements prescribed by statute or regulation. Consequently, the parties' alleged consent to omit the time or their mutual waiver could not grant the Zillah Court jurisdiction to treat the award as a decree under the Regulation.
On the second objection (nature and extent of the matters referred), the Court observed that the Regulation requires sufficient specification so the reference is intelligible and future courts can determine what was decided by the arbitrator. However, their Lordships found the facts unclear on whether petitions referred to in the deed were actually attached or filed with the Zillah Court; because the record did not permit a satisfactory finding, they declined to decide that point definitively, stating that the first ground (omission of time) was dispositive.
The Court expressly declined to deal with other objections about whether the award was final, noting doubts whether such issues ought to have been raised and disposed of first in the Zillah Court; since there was one fatal objection, it was unnecessary to consider the others.
Holding and Implications
Holding: Their Lordships concluded that the deed of reference failed to comply with the mandatory requirements of Regulation VII of 1827 (specifically by omitting the time within which the award was to be made and, on that ground alone, failing to bring the award within the Regulation). Accordingly, their advice to Her Majesty was to restore the original decree of the Sudder Court (which had directed that the award be taken off the file of the Zillah Court) and to set aside the second decree of the Sudder Court.
Implications: The direct consequence is that the arbitration award at issue does not have the force of a decree of the Zillah Court under Regulation VII of 1827 because the statutory requisites were not complied with. Their Lordships ordered that costs subsequent to the first Sudder Court decree, including costs before their Lordships, be allowed to the appellants.
The opinion does not purport to establish a broader new rule beyond applying the settled principle that jurisdictional conditions prescribed by statute or regulation are mandatory and not subject to cure by consent; the decision's effect is specific to the facts and compliance (or lack thereof) with Regulation VII of 1827 in this record.
JUDGMENT
John Patteson, J.
1. This case comes before their Lordships under a Regulation in India, No. VII. of 1827, and the question is, whether or not the submission and the award are within the terms of that Regulation. The objections that have been taken are of a technical nature. The first is, that no time is specified in the deed of submission (which it is said is required by that Regulation), within which the award should be made, and that the omission of the time prevents the award from being entitled to be enforced as a decree of the Zillah Court, according to the Regulation itself; and the second objection is, that there was an omission in the deed of submission as to the nature and extent of the subject-matters referred to arbitration, which, however, was not the case with the original deed, because the petitions on which the submission went, were stated to have been attached to the original deed, and those petitions forming part of the deed, though they were not filed in the Zillah Court with the deed itself and the award, so as to enable that Court to proceed as upon a decree of their Court. There were other objections as to whether the award was final or not.
2. Their Lordships have been very much struck with the first and second objections which were taken, as to whether or not the case really comes within the Regulation of 1827, and it is upon those objections that they propose to advise Her Majesty.
3. Now, Regulation VII. of 1827 recites, That it is advisable for the easy and amicable settlement of disputes of a civil nature, that the parties should have the means of adjusting them by arbitration, without being obliged to resort to a Court of Law, and that an award duly pronounced should have the force of a decree of the Court. It is very likely that this Regulation may have been enacted by the Legislature in India, with some reference to the Act of Parliament in this country, the 9th & 10th Will. III., cap. 15, by which submissions to arbitration were authorised to be made rules of Court, and enforced by process of contempt of Court, as if it were a proceeding actually in Court; it is very possible that that was so, but the difference between the law in England and the law in India, in that respect, is very marked, because, by the 9th & 10th Will. III., cap. 15, all that is enacted is, that if parties choose to submit their differences to arbitration, they may insert in the submission the agreement between them, that the submission may be made a rule of any of His Majesty's Courts of Record, upon an affidavit made by the witnesses to the submission, that there is such a clause; but there is no mention made in the Statute of Will. III. with respect to what the submission itself shall contain; it is left entirely to the parties themselves to put into the submission anything they think fit. Therefore, the cases which have been cited upon that subject, with respect to the enlargement of time by consent, although not in the very terms in the deed of submission, are really beside the question which their Lordships have now to consider. No question arose in those cases, as to whether or not the deed of submission could be made a rule of Court; the only questions were, whether the terms of the deed of submission, such as they were, had been complied with, so as to make the award a sufficient one, that the Court might either enforce it by attachment or order it to be set aside; the motion generally was to set it aside, but, as I have said before, all these cases have nothing to do with the present question.
4. The present question turns upon this principle, that wherever jurisdiction is given to a Court by an Act of Parliament, or by a Regulation in India (which has the same effect as an Act of Parliament), and such jurisdiction is only given upon certain specified terms contained in the Regulation itself, it is a universal principle that these terms must be complied with, in order to create and raise the jurisdiction, for if they be not complied with the jurisdiction does not arise.
5. Now, it is said here, that there is one condition in which this Regulation has not in terms been complied with. The Regulation, by sec. 1, cl. 1, enacts, that any such matter of dispute as is cognizable in a Civil Court, may, for the purposes specified in the Regulation, be referred, by mutual consent of the parties to one or more arbitrators, chosen in such a manner as may be agreed on by the parties, and then the Regulation specifies who shall be qualified to act as arbitrators. And cl. 1, sec. 3, states, that when the choice of the arbitrator or arbitrators shall have been made, the parties shall execute a deed of reference which may be upon unstamped paper, showing the names of the arbitrator or arbitrators; the nature and extent of the matters referred; the date of reference; the time within which the award is to be given; the signatures of the parties, and of two witnesses; and the consent of the parties to abide by the award, with any conditions that may be involved, such as whether the decision of a majority is to be conclusive, or whether an umpire is to be appointed, and so on. Then a form of a deed of reference is given; but it is expressly stated, that it is not requisite that the deed of reference should be framed according to that form, and it provides for the award being delivered within ten, or as many days as shall be specified, and that it contain the matters and be framed according to the rule specified in the preceding clause. Now, that provision is certainly not intended to put the thing altogether at large, and let the parties draw up their reference in any way they may think fit, without regard to the first part of the third section, because it expressly provides that it shall contain the matters, and be framed according to the rules specified in the first clause. It seems, therefore, that the Legislature of India, in passing this Regulation, attach importance to the matters, which they expressly enact shall be contained in the deed of reference.
6. Now, we are asked to consider, that, as far as regards the insertion of the time within which the award is to be made, it is directory only. Their Lordships are quite at a loss to see how they can possibly so construe that clause. It is included with a number of other things, and if we say the insertion of the time is directory only, there seems no reason why all the other things that are there specified should not also be considered to be directory, or why they might not be disregarded altogether by the parties if they thought fit to do so. Another argument that was used upon this third section was, that so far as regards that insertion of time, that was, in truth, only inserted with a view to the seventh section, in which it is enacted that if pending an arbitration a suit be instituted, that suit may be stayed upon proof that the suit and arbitration relate to the same matters, and that the time for making the award has not expired. Here it is said by anticipation that the Legislature put into the third section the requirement that the time should be specified with a view to the seventh section; that if any suit should be instituted in the meantime, that suit might be suspended until the reference should be terminated. This is really a very ingenious but at the same time a very far-fetched argument, and a construction which their Lordships cannot think the Legislature of India at all intended when they framed this Regulation. It is manifest they required by the third section that the time should be mentioned, and they required by the fourth clause of that section, that if the time be enlarged, it must be done in a particular manner, and with the same formalities as the deed itself, which was to be executed before two witnesses : and then they go on to make a provision which is very natural, namely, that if any suit is instituted pending an arbitration, that suit shall be suspended until the arbitration is determined. That it is consistent to state, therefore, that the third section has only reference to the seventh section, seems to their Lordships to be going much further than they can venture to do, particularly when it is considered that references had formerly been made in India under the name of 'Punchayets, which had been attended with a very great and unreasonable delay. It might probably have been the intention of the Legislature in framing this Regulation to prevent such delays from taking place, and that might have been a very good reason why this requirement should have been made, that the time should be specified in the deed of reference within which the award should be made. To regard it, therefore, merely as directory, or of little importance would seem to be letting in one of those very mischiefs which were expressly intended to be avoided by this Regulation. It is difficult, no doubt, for any Court to be quite sure that they know the reasons why an Act of Parliament is passed, or to account for the phraseology which is used in an Act of Parliament, or of a Regulation in India; but this reason for requiring the time to be specified and for making the Regulation in these terms, does seem to be natural and probable Not only so, but it seems to have been stated that was likely to have been the cause, because their Lordships perceive that in the first decree of the Sudder Court in India in giving their judgment, the Court say, The Advocate-General says, it was by mutual consent that the time within which the award was to be given was not defined, if so, it was by mutual consent, and not by any fraud or inadvertence, that the deed of reference to arbitration was so drawn as that the award on it should never rise above the level of the ancient sluggish punchayetnamah, to invigorate and reform which, specially in regard to expedition, this Regulation was enacted; so that the Court there treat it as a reason for this Regulation, that it was to avoid the delay. It then goes on:--And considering that one of the parties is not generally amenable to Regulations, this condition, that the award should not have the force of a decree, was a very judicious one on the part of his antagonists, for no sooner did the Bukshee, who now seeks to exercise the force of the Court against his alleged creditor, receive himself an order from that Court to refund, pending the present inquiry, the money that had been paid to him wrongfully through that Court, than he wrapped himself in his privileges, and demurred to its jurisdiction. As to the latter part, it is immaterial in this case whether it be right or wrong; but the reason which they gave, and which they suppose to have been the cause of this Regulation, seems to have been strong in the mind of the Court at that time; neither did that pass away, because their Lordships have observed that in a subsequent decree when they reverse their former decree, they still adhere to this view; they say:--In prescribing that a time must be fixed for pronouncing the award, it may be admitted that the law intended to provide against procrastination and the evils attending the old form of Punchayet. But the Court are struck with the force of the observation that in placing no restriction of that kind on the arbitration, the object of both parties was to facilitate, not procrastinate, their proceedings, which they severally intended should be final. The arbitrator, who is now sitting in Court, has satisfied it that the time was waived by consent of both parties. So that even in the last judgment when they reverse the former one, the Court still adhere to their view of the reason why the time was mentioned in the Regulation of 1827. Their Lordships cannot help thinking that probably was the true account of the matter, and that the time within which the award was to be made was considered by the Legislature of India to be essential, to be of great importance and to be necessary to be inserted in the deed of reference in order to give to the award the force of a decree of the Zillah Court. It is said that it may have been that the arbitrator in this case being a Judge of the Zillah Court, and also agent for the Government of Surat, his time was very much occupied with public duties, and it may have been inconvenient to him to limit the time for making his award, because his time being so much occupied with his public duties he would have very little time to afford to investigate the matters that were so submitted to him. That might have been a very good reason for giving a long time; but it was not any reason whatever for altogether omitting to mention the time in the deed of reference. Then it is said, it is done by consent. Now, what the Sudder Court in the first instance states, would seem very forcible if it was originally the case that all mention of the time was omitted in the deed of reference by consent, and intentionally by both parties. One cannot help seeing that it may very possibly have been that neither party was willing that it should come within this Regulation, and that the award should have the force of a decree of the Zillah Court. If, on the other hand, it were not so, if it were inadvertently omitted, then the proper course would have been, when it was found out, to have had a fresh submission, in which it could have been inserted, in order to make the matter clear; but they proceeded upon the case as if it had been done with consent of both parties.
7. That brings it to the question, whether the consent of the parties to waive one of the conditions which is required by the Legislature in this Regulation can give jurisdiction to the Zillah Court. Now, it is quite clear, upon all principles and authorities which have been determined in this country, that no such consent can give jurisdiction. That was decided in the case of Ansell v. Evans (7 Term, 1), regarding a parol submission not coming within the Statute, 9th & 10th Will. III., c. 15. The Court there said, the parties cannot by consent give us the power which the Statute must give. In the case of a submission, they required two witnesses to attest the fact and bring it before the Court, and, therefore, they said, we cannot assume a jurisdiction by mere consent of the parties. Neither can the Zillah Court assume a jurisdiction to make this award have the force of a decree of Court merely by consent of the parties.
9. If, indeed, we could have been satisfied that the time was merely directory, the case might have been very different. Their Lordships are all quite clearly of opinion that they must take it that the Legislature of India meant distinctly to prescribe that any deed of reference under which an award was to be made, to have the force of a decree of the Zillah Court should contain all those matters which are specified in the section of the Regulation to which I have already referred. And these matters being omitted, their Lordships have, therefore, come to the conclusion that, although the award may have been a very good one in itself, it cannot have the force which this Regulation would have given to it if it had contained all the requisites which the sections specify.
10. This being so, it is sufficient upon that ground to decide this case. The other point, with respect to the petitions not having been filed along with the deed of reference, seems to their Lordships to be hardly ripe for their decision if it were necessary to decide upon it at all, because the facts are not quite clear. It may be that the petitions were originally attached to the deed of reference as mentioned in the deed of reference, it may be that possibly they may have been filed in the Zillah Court along with the deed itself, and not considered to have been of sufficient importance to be sent here, or it may be that they have become detached in some way that has not been accounted for. Although the question may very fairly have arisen upon whom the onus lay of showing the fact one way or the other, yet the fact is not sufficiently clear upon the face of the proceedings to enable their Lordships to come to a satisfactory conclusion about it. All that their Lordships decide is, that they are quite satisfied that it is necessary under this Regulation that the nature and extent of the matter referred should be contained in the deed of reference, not meaning by that, that every single thing should be specified which the parties dispute, but generally so as to be intelligible and clear, so that it may appear when once filed, if any future suit should arise, what it was that had been determined by the arbitrator. Whether the reference to petitions of a certain date might be sufficient or not, or whether the petitions ought to have been annexed or not, it is not necessary for their Lordships to determine, as they are satisfied upon the first ground of objection, so as to render it unnecessary for their Lordships to express any positive opinion with respect to the second point.
11. All the other objections that have been taken as to the award not being final, their Lordships do not enter into; it may be doubtful how far a Court of Appeal could enter into that question at all, whether it ought not to have been originally raised in the Zillah Court, and disposed of there. Many difficulties of that kind may arise, but it is not necessary to say anything upon the subject; there being one fatal objection, that objection must prevail. The consequence will be that their Lordships will advise Her Majesty to restore the original decree of the Sudder Court, which, directed that the award should be taken off the file of the Zillah Court, and to set aside the second decree of the Sudder Court. Under the circumstances, their Lordships are of opinion that the costs subsequent to the first decree, including the costs here, ought to be allowed to the Appellants.
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