CPC 2

Over and above the extracted portion, the clause provides for the manner and method of
appointing the sole arbitrator, the continuance of the work during progress
of arbitration proceedings, the time and place of holding the arbitration. proceedings,
the power to enlarge the period for making the award and finality to be attached to the
award of the Arbitrator.
When the arbitration clause was invoked by the appellant, the respondent did contend
that the dispute raised by the appellant was not covered by the arbitration clause. After
specifying its demur, the respondent formulated the points in dispute on which
the arbitration was invited to give his award. Undoubtedly, the respondent proceeded to
formulate the points in dispute between the parties on which the Arbitrator was to be
invited to give his award without prejudice to its right to contend that the dispute is not
covered by the arbitration clause and that the appellant is not entitled to any
compensation in respect of the increase in the cost of imported pile driving equipment
and technical know-how fees. What is the effect of referring the specific question of law
to arbitration without prejudice to one's right to contend to the contrary will be presently
examined. The fact remains that on the dispute arising out of a claim for compensation on
account of the increase in the cost of imported pile driving equipment and technical
know-how fees, the respondent agreed to refer the dispute under two specific heads to the
Arbitrator. The dispute so raised have already been extracted. Briefly stated they are : (1)
whether the claim for compensation would fall within the purview of the first para of
the arbitration clause and (2) if it does the quantum of compensation, if any, to which
the appellant would be entitled. Analysing the disputes, let it be made distinctly clear that
the appellant asserted that its claim for compensation, would be governed by
the arbitration clause and the same was specifically denied by the respondent saying that
the claim would be beyond the purview of the arbitration clause. On these rival
positions, the specific issue was framed whether the claim for compensation would fall
within the purview of the first part of the arbitration clause. This was the specific
dispute referred to the arbitrator inviting him specifically to decide this of dispute. If this
issue specifically raises a question as to jurisdiction of the arbitrator to arbitrate upon the
dispute set out in Point No. 2, it appears to have been specifically referred to the
Arbitrator for his decision. Parties, therefore, agreed to submit the specific question even
with regard to the scope, ambit, width and the construction of the arbitration clause so
as to define its parameters and contours with a view to ascertaining whether the claim
advanced by the appellant and disputed by the respondent would be covered by
the arbitration clause. Whether upon its true construction the arbitration clause would
include within its compass the dispute thus raised between the parties was specifically put
in issue because parties were at variance about it. Appellant asserted that its claim to
compensation would form the subject matter of arbitration under Clause 40 and the
respondent contending to the contrary. While deciding this dispute, as to the scope, width
and ambit of arbitration clause vis-a-vis the dispute raised, it is not necessary to decide
whether the claim was tenable justified or had any substance in it. That would fall within
the second point of reference to the arbitrator which opens with a specific clause that it
needs only to be decided if the answer to the first point of reference, namely jurisdiction
of the arbitrator under Clause 40 is in the affirmative meaning thereby that the dispute so
raised and subsisting between the parties would be covered by
the arbitration agreement. In other words, if the dispute is covered by
the arbitration agreement, the arbitrator was further required to decide whether there
was any substance in the claim made, and if he found some substance in the disputed
claim, to ascertain what amount the appellant would be entitled to recover as and by way
of compensation from the respondent. The arbitrator was thus required and called upon
first to decide whether the dispute is arbitrable as falling within the width and ambit of
the arbitration agreement. If the answer is in the affirmative, then alone the second point
need be examined. If the answer to the first point of reference is in the negative in that if
the arbitrator were of the opinion that the dispute is not arbitrable as it would not fall
within the scope, width and ambit of the arbitration agreement, it would not be
necessary for him to determine whether the appellant was entitled to recover anything by
way of compensation. This aspect is being analysed in depth to point out that the parties
specifically referred the question of construction of arbitration agreement, its width,
ambit and parameters vis-a-vis the dispute raised so as to decide whether the dispute
would fall within the purview of the arbitration agreement, in other words the
jurisdiction of the arbitrator.
placing reliance on the decisions in Thankam R.Pillai v. Arbitrator (1996 (1) KLT 225)
and Paul v. Asst. Registrar (1998 (2) KLT 449) argued that the Arbitrator the power
to set aside an exparte award and hence decision of the Arbitrator to the contra is
illegal which is amenable to an appeal before the learned District Judge. The Office of
learned District Judge was therefore not correct in refusing to receive on file Exts.P3 and
P4.
3. In Thankam R.Pillai v. Arbitrator (supra), a Division Bench of this Court referring to

the decision in Cheru Ouseph v. Kunhipathumma (1981 KLT 495) among other
decisions, and concerning power of the Arbitrator under Section 70 of the Kerala Co-
operative Societies Act, 1969 (for short, "the Co-operative Societies Act") held that " a
Tribunal in its wider connotation embraced every adjudicatory organ including
an Arbitrator". There the question considered was whether the Arbitrator acting
under Section 70 of the Co-operative Societies Act has power to order impleadment of a
legal heir on the death of a party to the proceeding before such Arbitrator. Referring to
the various decisions it was held that the Arbitrator has the power. It was observed that
a Tribunal literally means a seat of justice and justice is dispensed by a quasi-judicial
body, an Arbitrator, a Commission, a Court or other adjudicatory organ created by the
State. Following that decision, in Paul v. Asst. Registrar (Supra) again dealing with
an award passed by the Arbitrator under the Co-operative Societies Act and the
relevant Rules it was held that the Arbitrator has power to set aside an exparte award.
Learned Judge took the view that the power conferred on the Arbitrator under rule 67(4)
(a) of the Rules enabled him so far as there is no restriction,
to set aside an exparte award.
Under terms of an agreement executed between petitioners and respondents and in

accordance with the provisions of the Arbitration and Conciliation Act, 1996 (for short,
"the Act") the dispute between them was referred to the sole Arbitrator.
The Arbitrator passed an award. Petitioners, claiming that the award was passed
without notice to them filed application before
the Arbitrator to set aside the award accompanied by an application to condone the
delay in filing that application. The Arbitrator, observing that he has no power
to set aside the award dismissed both the applications. Petitioners wanted to challenge
that order before the learned District Judge. Petitioners state that their appeal petition was
not received in the office of learned District Judge. Hence this Writ Petition praying that
learned District Judge may be directed to receive Ext.P3, appeal petition and Ext.P4,
application for stay and proceed with the same in accordance with law. Learned counsel
for petitioners,
placing reliance on the decisions in Thankam R.Pillai v. to the proceeding before
such Arbitrator. Referring to the various decisions it was held that the Arbitrator has
the power. It was observed that a Tribunal literally means a seat of justice and justice is
dispensed by a quasi-judicial body, an Arbitrator, a Commission, a Court or other
adjudicatory organ created by the State. Following that decision, in Paul v. Asst.
Registrar (Supra) again dealing with an award passed by the Arbitrator under the Co-
operative Societies Act and the relevant Rules it was held that the Arbitrator has power
to set aside before the learned District Judge. The Office of learned District Judge was
therefore not correct in refusing to receive on file Exts.P3 and P4.
3. In Thankam R.Pillai v. Arbitrator (supra), a Division Bench of this Court referring to

the decision in Cheru Ouseph v. Kunhipathumma (1981 KLT 495) among other
decisions, and concerning power of the Arbitrator under Section 70 of the Kerala Co-
operative Societies Act, 1969 (for short, "the Co-operative Societies Act") held that " a
Tribunal in its wider connotation embraced every adjudicatory organ including
an Arbitrator". an exparte award Arbitrator (1996 (1) KLT 225) and Paul v. Asst.
Registrar (1998 (2) KLT 449) argued that the Arbitrator the power
to set aside an exparte award and hence decision of the Arbitrator to the contra is
illegal which is amenable to an appeal There the question considered was whether
the Arbitrator acting under Section 70 of the Co-operative Societies Act has power to
order impleadment of a legal heir on the death of a party. Learned Judge took the view
that the power conferred on the Arbitrator under rule 67(4) (a) of the Rules enabled him
so far as there is no restriction, to set aside an exparte award.

CPC 2

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Over and above the extracted portion, the clause provides for the manner and method of

3. In Thankam R.Pillai v. Arbitrator (supra), a Division Bench of this Court referring to

Under terms of an agreement executed between petitioners and respondents and in

3. In Thankam R.Pillai v. Arbitrator (supra), a Division Bench of this Court referring to

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