STATE TIMBER CORPORATION v. MOIZ GOH (PVT) LTD

031-SLLR-SLLR-2000-V-2-STATE-TIMBER-CORPORATION-v.-MOIZ-GOH-PVT-LTD.pdf


STATE TIMBER CORPORATIONMOIZ GOH (PVT) LTD.,
COURT OF APPEAL.JAYASINGHE, J.JAYAW1CKREMA, J.
CA. No. 361/98.
D. C. COLOMBO No. 35477/MS.19™ NOVEMBER 1999.
Civil Procedure Code, S.693, 694. 695. 696. 698 – Arbitration Act. No. 11of 1995 – S2(2) – Award made on reference independently withoutintervention of Court – Jurisdiction of the District Court to entertainapplication – Arbitration proceedings and enforcement of an Award ■Interpretation Ordinance S.6(3)(c).
The Petitioner-Respondent made an application to the District Courtin terms of S.696 Civil Procedure Code to file the award in Court. Thisaward was made on a reference independently without the interventionof Court. The Respondent-Petitioner contended that the District Courthas no jurisdiction in view of the provisions of the Arbitration Act, whichgives jurisdiction to the High Court to enforce the Arbitral award. TheDistrict Court allowed the award to be filed of record.
Held :
S.47(2) Arbitration Act repeals S.693 – 698 Civil Procedure Code butthe repeal is subject to S.2(2) which states that where arbitrationproceedings were commenced prior to the appointed date the law in forceprior to the appointed date shall unless the parties otherwise agree, applyto such arbitration proceedings. In this case the arbitration proceedingscommenced prior to the appointed date i. e. 30.6.1995. as the arbitrationproceedings commenced on 30.3.94.
Prior to the Arbitration Act the Civil Procedure Code governed bothvoluntary and compulsory arbitration. Arbitration Ordinance 15 of 1866dealt only with compulsory Arbitration. All these proceedings under theabove statutes took place before the District Court, the original Court ofcivil jurisdiction.
When one examines S.2(2) of the Arbitration Act with S.6 3(c) ofthe Interpretation Ordinance, it is clear that in view of the savings
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clause and S.6 3(c) that the District Court has jurisdiction to decidethe application.
It is also clear that arbitral proceedings means and include theenforcement of the arbitral award. The provisions for enforcement is partand parcel of an arbitration proceeding.
According to S.698, Civil Procedure Code, a Court can order theaward to be filed of Court –
“if on the hearing of such application no ground mentioned or referredto in S.690 or S.691 be shown." The Court however has not given aproper hearing to the parties and violated the principles of natural
justice.
APPLICATION for Revision of the order of the District Court of Colombo.Cases referred to :
Dartford Brewery Co., vs. Moseley – 1906 1 KB 462
R. vs. Bloomsbury County Court – 24 QBD 309Uditha Egalahewa S. C.for Petitioner.
Gamini Marapana P. C. with G. Perusinghe for Respondent.
Cur. adu. unit.
January 17, 2000.
JAYAWICKRAMA, J.This is an application to revise the order of the learnedDistrict Judge. Colombo dated 30,h of April. 1998 wherein hehas ordered an award made by an arbitrator to be filed ofrecord under Section 698 of the Civil Procedure Code.
The petitioner-respondent made an application to theDistrict Court in terms of Section 696 of the Civil ProcedureCode to file the award in Court. The respondent-petitionerraised a preliminary objection to that application statingthat the District Court has no jurisdiction to entertain
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that application in view of the provisions of the ArbitrationAct No. 11 of 1995. The learned District Judge fixed an inquiryto decide the question of jurisdiction and the parties tenderedwritten submissions. The learned District Judge made orderholding that the District Court has jurisdiction and alsoallowed the award to be filed of record without giving a properhearing as regards the question of allowing the award to befiled of record.
It is admitted that the award was made on a referenceindependently without the intervention of Court. It is furtheradmitted that the parties are bound by the terms and conditionsof contract No. 5/89 dated 14.12.1989 and that Clause 15 ofthe said contract made express provision for the settlement ofdisputes that may arise between the parties by reference toarbitration. It is also admitted that the arbitrator made hisaward on 5.5.1997 and held that the respondent-petitioner isliable in a sum of Singapore Dollars 747.612.00 as damagespayable to the petitioner-respondent and that the respondent-petitioner has by his letter dated 3.7.1997 refused to honourthe claim of the petitioner-respondent. Thereafter, thepetitioner-respondent sought enforcement of the said awardthrough the District Court of Colombo by way of summaryprocedure on 31.10.1997.
The respondent-petitioner took up a preliminary objectionthat according to the provisions of Arbitration Act, No. 11 of1995, the enforcement of the arbitral award should have beenmade to the High Court and not to the District Court. Thelearned Counsel for the respondent-petitioner contended thatthe term “arbitration proceedings” referred to in Section 2(2) ofthe Arbitration Act do not include the enforcement of anarbitral award. The learned Counsel attempted to distinguishbetween arbitration proceedings and enforcement of an arbitralaward.
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According to Black’s Law Dictionary “proceeding” means;“In a general sense, the form and manner of conductingjuridicalbusiness before a Court or judicial officer; regular and orderlyprogress inform of law; including all possible steps in an actionfrom its commencement to the execution of judgment". – “An actwhich is done by the authority on the direction of the Court,express or implied; an act necessary to be done in order toobtain a given end; a prescribed mode of action for carryinginto effect a legal right. All the steps or measures adopted in theprosecution or defence of an action. The word may be usedsynonymously with “action” or “suit” to describe the entirecause of an action at law or suit in equity from the issuance ofthe writ or filing of the bill until the entry of a final judgment,or may be used to describe any act done by authority of a courtof law and every step required to be taken in any cause byeither party. The proceedings of a suit embrace all matters thatoccur in its progress judicially”.
In Dartford Brewery Co. v. Moseley"1 it was held that“All proceedings in the Supreme Court (Judicature Act 1890(c, 44), s 5) included a writ of possession to enforce ajudgmentin ejectment. ”
In R. v. Bloomsbury County CourtI21 it was held thatproceedings (County Court Act 1888 (c) 43), s 84), applied toall proceedings that might be brought in a County Court,including administrative proceedings.
It must be noted that termination of proceedings in anaction occur with the satisfaction of a decree voluntarily or byway of a writ obtained by a Court of law. To that extent,proceedings include the satisfaction of a decree obtainedaccording to law. In this instance, learned Counsel for therespondent-petitioner argued that the arbitration proceedingsterminated with the making of the award by the arbitratorand the enforcement of that award is a new cause of actionwhich arose after the Arbitration Act No. 11 of 1995 becamelaw and therefore the District Court has no jurisdiction.
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When one carefully examines the provisions of theArbitration Act it is clear that provisions have been madeby way of a saving clause as regards pending arbitrationproceedings. By Section 47 (2) of the Arbitration Act, Sections693 to 698 of the Civil Procedure Code have been repealed, butthis repeal is subject to the provisions of Section 2 (2) whichstates that “where arbitration proceedings were commencedprior to the appointed date, the law in force prior to theappointed date, shall, unless the parties otherwise agree,apply to such arbitration proceedings." It is very clear accordingto the above provisions that the arbitration proceedingsrelevant to the award commenced prior to the appointed date,
e. 30th of June 1995, as the arbitration proceedingscommenced on 30.3.1994.
Although the learned Counsel for the respondent-petitioner argued that arbitration proceedings do not includeenforcement of an award, on a reading of the above provisions,it is veiy clear that arbitration proceedings ends with thesatisfaction of the award. The preamble to the ArbitrationAct states that the purpose of the Act is to provide for theconduct of arbitration proceedings and for matters connectedthere with or independent thereto among other things. It isspecifically stated that the purpose for the enactment of thisAct is to make comprehensive legal provision for the conductof arbitration proceedings and the enforcement of the awardsmade thereunder.
Prior to the Arbitration Act No. 11 of 1995 the CivilProcedure Code governed both voluntary and compulsoryarbitration. The Arbitration Ordinance No. 15 of 1866 dealtonly with compulsory arbitration. All these proceedings underthe above sta tutes and few other statutes took place before theDistrict Court, the original Court of civil jurisdiction, withrights of appeal from the District Court to the Court of Appealand then to the Supreme Court.
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Stale Timber Corporation v. Moiz Coh (Pvt) Ltd..
(Jayawickrema, J.)
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The mechanism for a speedier and a well integratedprocedure for the disposal of commercial arbitration wasnecessary if commercial arbitration was to be attractive as analternate source of dispute resolution. For that purpose, thenew Arbitration Act was enacted.
When one examines the provisions of Section 2 (2) ofthe Arbitration Act together with Section 6 (3) (c) of theInterpretation Ordinance, it is very clear that in view of thesaving clause and the above provisions of the InterpretationOrdinance that the District Court has jurisdiction to decidethe application of the petitioner-respondent. In the instantcase, the arbitration proceedings commenced on 30.3.1994prior to coming into force of the Arbitration Act No. 11 of 1995and continued until 1997 when the award was delivered.According to Section 6 (3) (c) of the Interpretation Ordinance;“Whenever any written law repeals either in whole or part aformer written law, such repeal shall not, in the absence of anyexpress provision to that effect, affect or be deemed to haveeffected any action, proceeding or thing pending or incompletedwhen the repealing written law comes into operation, butevery such action, proceeding or thing may be carried on andcompleted as if there has been no such repeal’’.
When one takes into consideration the above provisionsit is abundantly clear that “arbitral proceedings” means andinclude the enforcement of the arbitral awards". The provisionsfor enforcement of the award is part and parcel of an arbitrationproceeding. In any case, the argument submitted by the learnedCounsel for the petitioner-respondent is highly technical. Ifone is to accept that argument it will cause more confusion anddelay even after obtaining a valid award. In any event, thesatisfaction of am award is the final step with regard toarbitration proceedings. If one is to accept the contention ofthe learned Counsel for the petitioner-respondent, once a validaward has been made the petitioner has to file a new action on
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the basis of a new cause of action to obtain the benefits of theaward. Therefore, we hold that the submissions made by thelearned Counsel for the petitioner-respondent is untenable.When a matter is referred to an arbitration, the proceedingends with the satisfaction of the award. In view of the abovereasons, we hold that the learned District Judge has come toa correct and proper conclusion as regards the preliminaiyobjection raised by the repondent-petitioner. We hold thatthe learned District Judge has jurisdiction to hearthis application.
The learned District Judge in deciding the preliminaiyobjection, has also decided on the main application without aproper hearing.
According to the provisions of Section 698 of the CivilProcedure Code, a Court can order the award to be filed ofCourt, “if on the hearing of such application no ground suchas mentioned or referred to in Section 690 or 691, be shown”.In the instant case, the^learned District Judge has not given aproper hearing to the parties and violated the principle ofnatural justice. Therefore, we set aside that part of the learnedDistrict Judge’s order where he ordered that the award be filedof Court and direct the learned District Judge to give a properhearing according to the provisions of Section 698 of theCivil Procedure Code and come to a proper finding accordingto law. The application for revision is partly allowed and partlydismissed. No costs.
JAYASINGHE, J.- I agree.
Application partly allowed.