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TMI Blog2018 (4) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 30.03.1982 in terms whereof the appellant Company appointed the respondent Company as its agent in accordance with the Handbook of Import Export Procedure, 1981-82 in order to advice, assist and guide the appellant Company to import materials under the REP licences for a CIF value of Rs. 1,85,95,100/- only with remuneration at the rate of 5% (per cent) of the CIF value of the goods imported along with all costs/expenditure incurred. (c) Out of the total value of the materials to be imported under the licences, the materials to the value of Rs. 1,16,00,800/- only could be imported and the material CIF value of Rs. 69,94,300/- could not be imported by the respondent-Company in the absence of the REP licences of the said value which resulted in breach of contract. (d) Both the parties took legal recourse and the High Court, on an application under Section 20 of the Arbitration and Conciliation Act, 1940 (in short 'the Act') referred the dispute to Arbitration of two Arbitrators. After completion of the arbitration proceedings before the Arbitrators, the arbitrators, could not reach to a consensus on the Award in terms of the Minutes of the Meeting held on 19.02.1999 and the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inted to decide the dispute. He further contended that when Umpire enters into Reference "in lieu of Arbitrators" he steps in the shoes of the Arbitrators and has the same duties as that of Arbitrators. Accordingly, the Umpire cannot depart from the requirement that an arbitrator should personally record the evidence on which he is to rely for the purpose of giving his decision. The Umpire cannot refuse to hear the witness again; and if on request of a party for the same, fails to do so, the Award would be bad for misconduct. 7) Learned senior counsel further contended that the Division Bench has simply affirmed the findings of learned single Judge on the question of waiver, damages ought to be awarded, without appreciating the contentions advanced especially when it was established from the documents on record that the appellant-Company had never waived its right of de novo hearing but had been insisted throughout before the Umpire to start proceedings de novo. For the purpose, the appellant-Company placed reliance on communication dated 24.05.1999 and 12.01.2000 addressed to the Umpire and the application dated 29.01.2000 filed for de novo hearing of the matter. 8) Arguing next ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration is whether in a case where the matter has been referred to the Umpire owing to disagreement between the Arbitrators, the Umpire has to confine himself only to hear the issues on which the arbitrators disagreed or he has to hear the matter afresh. Further, what does the word de novo hearing means? By virtue of Section 3 of the Act, unless otherwise agreed, the provisions of the First Schedule are deemed to be incorporated in the arbitration agreement. In this view of the matter, it is necessary to scrutinize Article 4 of the First Schedule of the Act as the same relates to the matter in controversy which reads as under:- "4. If the arbitrators have allowed their time to expire without making an award or have delivered to any party to the arbitration agreement or to the umpire a notice in writing stating that they cannot agree, the, umpire shall forthwith enter on the reference in lieu of the arbitrators." 12) From a bare perusal of the above, it is clear that an Umpire enters on a Reference "in lieu of the Arbitrators" and the Act does not contemplate any distinction with regard to the conduct of proceedings by the Arbitrators or the Umpire. It is an undeniable fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach an Award has made no application to the Umpire for rehearing of the evidence, the same would generally operate as a waiver by conduct. 14) Having said that the Umpire is bound to hear the matter de novo on an application filed by the parties, subject to the satisfaction of other necessary conditions in accordance with the law of arbitration and before examining whether the conduct of the appellant-Company amounts to waiver or not, it is necessary to examine the meaning of the word de novo hearing before the Umpire to whom the matter is referred in case of disagreement between the Arbitrators. Learned senior counsel for the appellant-Company contends that hearing a matter de novo means the matter is to be started afresh i.e., from the very point from where the arbitrators had started. In other words, it would mean that the matter brought on record: pleadings, evidence; before the arbitrators at the first instance would become nullity i.e., the proceedings including statements of claim, reply to claims and counter claims, statements and cross-examinations of witnesses before the Arbitrators have no significance. The ascertained point in dispute and the well known position of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter but the same seems to be an additional armory that the appellant is putting behind its back as it hasn't demanded de novo trial of the said matter neither in the communication nor thereafter in the proceedings. The appellant-Company next referred to communication dated 12.01.2000 but the same is also with regard to the pending proceedings before the High Court. It is only on 29.01.2000 that the appellant-Company has filed an application for de novo hearing of the case i.e., at a stage where the final arguments on the side of the respondent-Company have been finished and the date was fixed for final argument from the side of appellant-Company. If the appellant-Company was serious in its endeavor that it should get an opportunity to get the evidence recorded afresh, an application could easily have been filed before starting the proceedings before the Umpire. It is only from oblique references that the appellant-Company seeks to derive such intent. This aspect is clearly an afterthought which arose during the culmination of the proceedings before the Umpire. Further, even the sum and substance of the highly belated application dated 29.01.2000 for commencement of proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot take upon itself the burden of saying that this was contrary to the contract and as such beyond jurisdiction. If on a view taken of a contract, the decision of the arbitrator on certain amounts awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the court. Where the reasons have been given by the arbitrator in making the award the court cannot examine the reasonableness of the reasons. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of evidence. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself the task of being a Judge on the evidence before the arbitrator." 19) In Municipal Corporation of Delhi vs. Jagan Nath Ashok Kumar and Another (1987) 4 SCC 497, it was held by this Court that appraisement of evidence by the arbitrator is ordinarily never a matter which the court questions and considers. It may be possible that on the same evidence, the court may arrive at a different conclusion than the one arrived at by the arbitrator but that by itself is no ground for setting aside the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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