PRIVY COUNCIL

                   L. Oppenheim and Company

                   Vs.

                   Hajee Mahomed Haneef Saheb

                             Privy Council Appeal No. 31 of 1920
(Viscount Cave, CJ, Lords Shaw J. Phillimore, Sir John Edge and Mr. Ameer Ali. JJ)

                   7.3.1922

                   JUDGMENT

Viscount Cave CJ.

1. This is an appeal from a decree of the High Court of Judicature at Madras in the
exercise of its appellate jurisdiction, allowing an appeal from a decree made by Mr.
Justice Coutts Trotter in the exercise of the ordinary original civil jurisdiction of the
same Court.

2. The appellants are merchants carrying on business in London, and the original
respondent (who has died during the pendency of this appeal and is represented by the
present respondents, was a merchant carrying on business in Madras.

3. By a contract in writing made in London and dated the 23rd October, 1913, the
appellants brought from the respondent 20,000 tanned Madras Sheepskins of a
specified quality to be shipped to the appellants in London. The contract contained the
following clause:-

       "Any differences arising out of this contract, failing amicable adjustment to be
       submitted to arbitration in London in the usual manner, and the award of such
       arbitration to be final and binding on both buyer and seller."
4. Certain skins were shipped to London, and the appellants paid to the respondent £
1495-15sh-4d in respect of those skins. When the skins arrived in London, the
appellants alleged that they were of inferior quality and refused to accept delivery.
They were ultimately sold, with the consent of the respondent, at the price of £ 1242-
10 shod thus leaving deficiency of £ 253-5 sh-4d which the appellants demanded from
the respondent and which the respondent refused to pay. Thereupon the appellants, in
pursuance of the arbitration clause contained in the contract and of the English
Arbitration Act, appointed Mr. E. H. Pringle as arbitrator on their behalf in the
difference which had arisen, and caused the respondent to be served at Madras with a
notice, dated the 3rd February, 1916, whereby they informed him of the appointment
of Mr. Pringle and required him, within seven days from the service of the notice, to
name to the appellants or their agents in Madras an arbitrator to act on their behalf in
London in the matter of the difference which had arisen, the notice stating that
otherwise the difference would stand referred to Mr. Pringle alone as sole arbitrator.
The respondent refused to appoint an arbitrator to act on his behalf or to take part in
the arbitration: and, thereupon Mr. Pringle, at the request of the appellants, proceeded
with the arbitration. He gave no opportunity to either party to appear and give
evidence before him, but, having read the contract and correspondence and inspected
the skins, he made his award in writing dated the 11th July, 1916, and thereby
awarded that the respondent should pay to the appellants the sum of £ 258-5sh-9d with
interest and costs.

5. On the 15th July, 1916, the appellants brought an action in the King's Bench
Division of the High Court of Justice in England for the amount payable under the
award, and, the writ of Summons having been served upon the respondent at Madras
and no appearance having been entered, the appellants, on the 28th November, 1916,
recovered judgment against the respondent for the sum of £ 286 - 2sh-9d being the
amount of the award with some interest and costs.

6. The appellants then brought the suit out of which this appeal arises against the
respondent in the High Court of Judicature at Madras, claiming the sum of £ 286 -
2sh-9d due under the Judgment of the King's Bench Division, or in the alternative £
263-10sh-9d - being the amount of the award and costs, with interest, or as a further
alternative £ 253-5sh 4d - being the loss of the contract. The respondent pleaded
(among other pleas which are not now material) that the judgment of the High Court of
Justice in London was not binding upon him, as it was not given on the merits that the
claim under the contract was barred by limitation, and as to the award, that it was not
binding upon him as no notice was given to him by the arbitrator that he was
proceeding to arbitrate.

7. The suit was heard by Mr. Justice Coutts Trotter, who held that, having regard to
the decision of the Board in Keymer v. Visvanatham Reddy, 1 the action upon the
Judgment could not be maintained, as the Judgment had been entered in default of
appearance and the action had not been tried upon its merits, and that the claim under
the contract was statute-barred. This part of the Judgment has not been challenged and
need not be further referred to. With regard to the award, the learned Judge in a lucid
judgment held that the plea of want of notice could not be raised by defense in the
suit. After observing that the grievance of the respondent was more imaginary than
real, the award having been made by a commercial man who took the Commercial
documents with which he was familiar and saw the goods and gave his opinion on the
spot, he added that if the objection could have been raised in the proceedings he would
have felt constrained to give effect to it. But he referred to Thorburn v. Barnes, 2 as a
complete authority for the proposition that according to the English Law any objection
relating to an irregularity in bringing an award into existence must be taken by motion
under the Arbitration Act, 1889, to set aside or remit the award, and if not so taken
could not be raised by way of defense to an action on the award. He therefore held that
the defense that the award was tainted with irregularity by the fact that the respondent
had not had an opportunity of being present at the arbitration was not open to him in
the suit. An application having been made by Counsel for the respondent to treat the
written statement as an application to the Court at Madras to set aside the award, the
learned Judge held that he had no jurisdiction to entertain such an application, adding
:-

       "How a Judge in Madras is supposed to have jurisdiction to upset an award
       made by an arbitrator, in London passes my comprehension and it is perfectly
       clear that the Court which is given jurisdiction by the English Act is the English
       Court."
8. He added that even if he had had jurisdiction he would have declined to exercise it.

9. Against this judgment an appeal was brought and was allowed by the Appellate
Division, the learned Judges of that Division holding that the rule in Thorburn v.
Barnes 3 did not apply in India. Thereupon the present appeal was brought.

10. In their Lordships' opinion Mr. Justice Coutts Trotter came to the right decision
and this appeal should succeed. The contract of the 23rd October, 1913, was made and
was to be performed in England; and this arbitration clause provided for an arbitration
which was to take place in London and in accordance with English law and procedure.
Under that law, by which both parties agreed to be bound, any objection to an award
on the ground of mis-conduct or irregularity on the part of the arbitrator must be taken
by motion to set aside or remit the award, and, if not so taken cannot be pleaded in
answer to an action on the award. In the present case no such motion was made within
the time limited by Order 64, Rule 14 of the Rules of the Supreme Court, England or
at all, and accordingly the award became as fully binding on both parties as if it had
been incorporated in the contract. No doubt any defense going to the root of the award
- for instance, that the arbitrator had no jurisdiction or that the matter was tainted with
fraud - could have been pleaded in the suit; but a defense on the ground of irregularity
not appearing on the face of the award was excluded by the law by which both parties
had agreed to be bound.

11. On this view of the case the Indian law as to arbitration is irrelevant, and their
Lordships accordingly express no opinion on the question whether if the arbitration
had taken place in India the defense on the ground of irregularity could not have been
pleaded. It is plain that the Indian Court could not set aside an English award on that
ground.

12. In order to prevent misconception, it appears desirable to add that it was not
pleaded or contended at any stage of the proceedings that the award had merged in the
English judgment, and accordingly their Lordships do not deal with that point.

13. For the above reasons their Lordships will humbly advise His Majesty that this
appeal should be allowed and that the order of Mr. Justice Courts Trotter should be
restored, the respondents to pay the costs in both courts in India and the costs of this
appeal.

Appeal allowed.

Cases Referred.

1. AIR 1916 PC 121: 40 Mad 112 : 44 IA 6

2. (1867) 2 CP 384 : 16 LT 10 : 36 LJCP 184 : 15 WR 623