Case Note & Summary
The dispute arose from a contract dated 1964 between the appellant, Union Textile Traders, and the respondent, Shri Bhawani Cotton Mills Ltd., for the sale of 200 bags of Cone yarn. The contract contained an arbitration clause stating that any dispute would be referred to the arbitration of the Indian Chamber of Commerce, Calcutta, whose decision would be binding on both parties. The appellant was not a member of the Chamber, while the respondent was. When a dispute arose and was referred to arbitration, the appellant requested the Registrar of the Tribunal of Arbitration of the Chamber to disclose the names of the arbitrators appointed, to enable the appellant to ascertain their independence and impartiality. The Registrar refused, citing Rule III(3) of the Chamber's Arbitration Rules, which empowered the Registrar not to disclose the names to a non-member. The appellant persisted, and upon continued refusal, filed an application under Section 33 of the Indian Arbitration Act, 1940 before the Calcutta High Court, seeking a declaration that the rule was void and in conflict with the Act. The High Court dismissed the application, leading to an appeal by special leave to the Supreme Court. The appellant contended that the non-disclosure violated the principles of natural justice and infringed Sections 5, 11, and 30 of the Arbitration Act. The Supreme Court dismissed the appeal, holding that Rule III(3) did not conflict with the provisions of the Arbitration Act. The Court reasoned that the appointment of arbitrators was not rendered incomplete by non-disclosure of names, and that such a rule was justified by commercial practice. The Court found no violation of natural justice, as the parties had voluntarily agreed to arbitration under the Chamber's rules, which formed part of the contract. The judgment affirmed that the rule was a valid internal procedure of the Chamber, and the appellant, having agreed to arbitrate under those rules, could not challenge the non-disclosure. The decision favored the respondent, upholding the High Court's dismissal of the application.
Headnote
A) Arbitration - Appointment of Arbitrators - Non-disclosure of names by Chamber - Indian Arbitration Act, 1940 ss.5,11,30 - The appellant challenged Rule III(3) of the Rules of Arbitration of the Indian Chamber of Commerce, Calcutta, which allowed the Registrar not to disclose the names of arbitrators to a non-member. The Court held that the rule is not in conflict with the provisions of the Arbitration Act and is justified by commercial practice; the power given to the Registrar does not infringe the rules of natural justice or the Act. Held that the rule is valid and the appeal is dismissed. (Not mentioned)
Issue of Consideration
Whether Rule III(3) of the Rules of Arbitration of the Indian Chamber of Commerce, Calcutta, which empowers the Registrar not to disclose the names of arbitrators to a party who is not a member of the Chamber, violates Sections 5, 11, or 30 of the Indian Arbitration Act, 1940, and the principles of natural justice.
Final Decision
The appeal was dismissed. The Supreme Court held that Rule III(3) empowering the Registrar not to disclose the names of arbitrators to a non-member is not in conflict with the provisions of the Arbitration Act and is justified by commercial practice. The appointment of arbitrators is not rendered incomplete by the non-disclosure.
Law Points
- Non-disclosure of arbitrators' names to non-members upheld
- Arbitration Act 1940 ss.5
- 11
- 30 not violated
- Commercial practice justifies non-disclosure
- Rule III(3) of Chamber's Arbitration Rules valid.
