Law: Arbitration Act, 1940

Section: 4,4,5,33,28

(a) Arbitration Act (X of 1940), Ss. 4, 5 & 33-Arbitrators initially vested with jurisdiction to proceed with case-Mere pendency of another proceeding in civil Court or mere contingency of future happening does not render award null and void. Where the arbitrators are -admittedly vested with initial jurisdiction to decide the matters in terms of contract entered into between the parties, the mere fact that there was some proceeding in the civil Court at the instance of one of the parties would not ipso facto take away the jurisdiction of the arbitrators to proceed with the case. Of course, when there is a dispute about the very existence of a contract, the arbitrators become functus officio and as such any award made by them would be a nullity. But when the dispute is under the contract, the m ere fact that the opposite-party filed several suits under section 33 of the Arbitration Act, 1940 would not take away jurisdiction already vested 'in the arbitrators so as to make their award a nullity. Hanutmull Boid v. Fatehchand Muralidhar A I R 1954 Cal. l; Heyman and another v. Darwins, Limited A I R 1942 A C 356 and 1 All. 337 ref. (b) Arbitration Act (X of 1940), First Sch, cl. 3 Phrase "entering on the reference"-Meaning. Clause 3 of the First Schedule to the Arbitration Act, 1940 mentions three cases giving the starting point of limitation. First is four months from entering on the reference, second four months after having been called upon to act by notice in writing from any party to the arbitration agreement and third, four months within such extended time as the Court may allow. Although there are conflicting decisions but the words "entering on the reference" do not mean when the arbitrators have the parties before them and begin to hear the parties. They mean that when a reference has been made and the arbitrators accept the reference. The following are the reasons for adopting the above view. The Arbitration Act is for speedy disposal of the dispute between the parties. Any other view will frustrate that purpose of the Act and put the parties waiting for the result for an unknown time, e.g., after reference the arbitrators may not take up the matter…

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