Arbitration-Misconduct of arbitrators-Refusal of arbitrator. to act-Accept-
ance and remittance of award by' court

The draftsman by using the words "may" and "shall" in different parts
of sections 90-96 of Civil Justice Ordinance 1900 has carefully distinguished
between the cases in which the judge may exercise his discretion and the
cases in which the judge is bound by the procedure laid down in the Ordi-
nance.

Although section 97 says that no award shall be liable to be set aside
except on the ground of corruption or misconduct of all or any of the arbi-
trators, it does not mean that every award shall be set aside if any of the
arbitrators has been guilty of misconduct.

Rigopoulo v. Rigopoulo AC-APP-18-1921 distinguished.
Civil Justice Ordinance 1900, ss. 90-98.

• Court: R. H. Dun C.J., O. W. Williamson and B. H. Bell JJ.

Appeal

Advocates: Mr. Francoudis ... for appellants; Mr. Christodou-
lides . . . for respondents

January 10, 1923. R. H. Dun C.J.: This is an appeal and cross
appeal from the decision of Judge 'Fleming ordering an aWard to be
remitted to the reconsideration of the arbitrators, refusing to set aside
an award on the ground of alleged misoondoct and refusing to gi¥e
judgment in accordance with the terms of the award.

The plaintiffs .and defendants carried on business in partnership
and the plaintiffs instituted a. civil suit by petition dated February 1st,
1921, claiming £E.2402 from the defendants. The defendants in-
sisted upon arbitration proceedings under a clause in the partnership
contract and on October 29, 1921, the court referred it to Messrs. Reed,
Costopolo and Izmirlian to decide any dispute that may be represented
to . them by either party as having arisen and which the arbitrators
may consider has arisen out of the cOmract of partnership' and to
determine what sum is due by either party.

On June 1, 1922, Mr. Reed wrote. to the court and said he was
going on leave and asked if Mr. Law might act jn his place while he was
absent, the parties were consulted and neither objected and this was
a~oved by the court.

It was stated in this court and not, I think, seriously disputed
that the examination of the accounts of the firm was conducted during
the Winter of 1921-1922 and was not completed until April or May
1922. It is stated in the award that in May the plaintiff was asked by
the arbitrators to produce certain documents in support of the accounts
and asked for four months in which to do so: .It was stated in court
that the plaintiff left Khartoum in June and went to Greece and was
there taken under conscription into the Greek Army. The plaintiff
has not returned yet and there is no definite news when he will re-
tum, but it is alleged by the defendant that the plaintiff sold all his
property in the Sudan to someone else at the beginning of 1922.

It appears that early in October Mr. Law began to get anxious
about the case and wrote to the plaintiffs' agent about the documents
which the plaintiff was to produce.

On the 2ist Mr. Law wrote again and asked whether any docu-
ments had been received and receiving a negative reply he wrote on

the 28th that unless the documents were produced the arbitrators
would be obliged to deal with the case on the materia! before them
and that arbitrators would meet to give a' decision on the 30th .

Mr. Law summoned a meeting for the 30th at 5 P.M., Mr. Iz-
mirlian the arbitrator appointed by the defendants attended, Mr.
Costopolo appointed by the plaintiffs did not attend, but sent a letter
which reached Mr. Law at 5.30 saying, "As I am not prepared to act
as arbitrator any further, I am submitting my registration tomorrow
to the court." It is not quite clear from the award, but I gather that
it was made immediately on receipt of that letter: it awarded nearly
£E.3700 to the. defendants.

Mr. Francoudis alleges that Mr. Law wrote the letters referred to
and came to a decision to bring the arbitration to a decision without
consulting Mr. Costopolo and that by coming to a decision with Mr.
Izmirlian in the absence of Mr. Costopolo, Mr. Law was guilty of mis-
conduct within the meaning of section 97 of the Civil Justice Ordinance
1900 and further that in view of the circumstances under which the
plaintiff was detained in Greece against his will, it was misconduct to
determine the matters in dispute while he was so detained and that
the ~ourt was bound to set aside the award so made as prescribed by
section 97¹ of the Civil Justice Ordinance.

Mr. Christodoulides argues that the award having been made
while there were three arbitrators in existence, Mr. Costopolo not having
communicated his resignation to the court till the following day, the
award is valid and must be enforced as the award of a majority of the
arbitrators under section 98.²

1 Section 97 reads as follows:

"No award shall be liable to be set aside except on the ground of cor-

 ruption or misconduct of an or any of the arbitrators.                                         .

Any application to set aside an award shall be made within ten days
after the day appointed for hearing the award."

See section 161, Civil Justice Ordinance 1929.
'Section 98, C.J.O. 1900 reads as follows:

"If the Court making the reference sees no cause of remitting or fur-
ther remitting the award or any matter referred to arbitration for recon-
sideration in the manner aforesaid, and if no application has been made to
set aside the award, or if the Court has refused such application, the Court
shall decide in accordance with the award of the majority of the arbitrators,
and shall fix the amount to be allowed for the expenses of the arbitration,
and direct by and to whom, and in what manner, the same shall be paid."
See sections 159 and 162 (1), C.J.O. 1929.

The learned judge has agreed with neither contention but has
"with some reluctance" felt himself bound to act under section 93 (2)
of the Civil Justice Ordinance 19()()8 and call upon the plaintiff to
nominate an arbitrator in place of Mr. Costopolo and to remit the award
for the reconsideration of the two old arbitrators and the new one So
to be nominated under section 98 (c) on the ground that the fact of
that procedure not having been followed constitutes an apparent il-
legality on the face of the award.

The decision of this case turns upon the true construction of Sec-
tions 93, 96,4 97 and 98 of the Civil Justice Ordinance 1900. I have
read the whole of Chapter XIII in which these sections occur and

        find that it is very carefully drafted.                                                     .

The first section, section 90⁵ says: the court "may" refer a dispute
to arbitration: section 91⁶ says: the court "shall" specify the precise

3 Section 93, C.J.O. 1900 reads as follows:

(1) Every Court making a reference under this chapter may, on good
cause shown, excuse any person from serving as an arbitrator.

(2) If an arbitrator dies, refuses or becomes incapable to act, or is
excused by the Court from serving, the Court which made the reference
may calion the party who nominated such arbitrator to nominate another person iri his place.                                   

(3) If in any of the cases, provided for by subsection (2) any party
fails for a week to nominate a new arbitrator in manner aforesaid, the
Court making the reference shall appoint some person to act as arbitrator."
See section 152, C.J.O. 1929.

• Section 96, C.J.O. 1900 provides:

"The Court making the reference may remit the award or any matter
referred to arbitration to the reconsideration of the same arbitrators-

(a) if the award has left undetermined any matter referred to arbitration;
or if it has determined a matter not referred to arbitration; ,
(b) if the award is so indefinite as to be incapable of execution; or

( c) if an-Objection to the legality of the award is apparent upon the face
of the award."

See section 160, C.J.O. 1929.

• Section 90, C.J.O. 190(} provides:

"Any Court may'. \Vith the consent of the parties, by order, refer any
dispute before it to arbitration."

See section 149 (I), C.J.O. 1929.

• Section 91 provides:

"In referring any such dispute to arbitration, the Court making the
reference shall specify, in the order of reference, the precise matter sub-
mitted to' the arbitrators or arbitrator and such period as it may think
reasona11le for the delivery of the award, and the Court may from time to

                time extend such period."                                                              .

See sectjon 150 (a) and 155, C.J.O. 1929.

matter referred and the period for the delivery of the award and
"may" extend the period: section 92⁷ says: the parties "may" nominate
the same' number and the third of fifth arbitrator "shall" be ap-
pointed by the court. Section 93 (1) says: the Court "may" excuse
an arbitrator from serving. Section 93 (2): if an arbitrator dies,
refuses or becomes incapable to act or is excused, the Court "may"
call on the party to nominate another. Section 93 (3): if the party
called on fails to nominate the Court "shall" appoint another. Section
94⁸: the arbitrators "may" apply to the Court and the Court "shall"
summon the. person required. Section 95⁹: the arbitrators "shall" de-
termine; the award "shall" be made in writing, "shall" be signed by
them and "shall" be submitted to the Court and the Court "shall"
cause notice to be served. Section 96: the Court "may" 'remit the
award. Section 98: the Court "shall" decide in accordance with the
award of the majority.

It is quite clear that the legislator knew the difference in mean-
ing between the words "may" and "shall": where he says "shall" be
gives no discretion, where he says "may" he does give a discretion.

The Court has therefore a discretion under section 93 (2) and
section 96 but has none under section 98.

There may, in my opinion, be circumstances in which the court
need not appoint a fresh' arbitrator if one fails to act for any cause:

Section 92 provides:

"The parties to the case may each nominate either one or two arbitra-
tors, as the Court may decide, provided that each party shall nominate the
same number; and a third or fifth arbitrator (as the case may be) shall
be appointed by the Court making the reference."

See section 151, C.I.O. 1929.

8 Section 94, C.I.O. 1900 reads as follows:

"If the arbitrators require the presence of the parties, or any other per-
sons whose evidence may be necessary, they may apply to the Court making
the reference, and the Court shall summon such parties or persons; and all
such parties or persons shall be bound to attend, either in person or by
agent as the arbitrators may require, and to state the truth and to produce
such documents and other things as may be required before the arbitra-
tors."

• Section 95 provides:

. "The arbitrators shall determine and award concerning the matter re-
ferred to them for arbitration. The award shall be made in writing, and
shall be signed by the arbitrators and shall be submitted by them to the
Court making the reference, and the Court shall cause notice to be served
on the parties to attend and hear the award."

See section 156 (2), C.I.O. 1929

in the first place the parties may consent to the unanimous decision of
the two remaining arbitrators; secondly, if the court were satisfied that
the arbitrators had in effect finished their work and that nothing re-
mained to be done except to draw up a formal award and one arbitra-
tor was killed in an accident I think the court might accept the award
of two: other cases might easily be imagined.

So with regard to section 96, I do not consider that an award
should necessarily be remitted because some small matter has been
left undetermined or some small matter not submitted has been de-
termined or because there is some small technical objection apparent
on the face of the award.

Section 97 is rather different from the other sections: it says:

"No award shall be liable to be set aside except on the ground of
corruption or misconduct of all or any of the arbitrators"; tais does
not in my view mean that "every award shall be set aside if any of
the arbitrators has been guilty of corruption or misconduct."

Where the arbitrators are agreed in an award and one only was
guil~ I should not say that the award must be set aside: so where two
take one view and the third takes a different view and the third was
guilty of corruption or misconduct I should not say that the award
must necessarily be set aside: otherwise it would be possible for an
arbitrator who saw that the decision would be given against this nom-
inator to prevent any award from being valid.

In my opinion, therefore, the court had a discretion first to set
aside the award or secondly to call for the appointment of a new
arbitrator by the plaintiffs and to remit the award for the reconsidera-
tion of the board of arbitrators so re-constituted or thirdly to accept the
existing award.

This discretion must however be exercised as a judicial discretion
as in all other cases in which the court has been given a discretion and
I apprehend that the Court of Appeal will not overrule the discretion of
the High Court unless the discretion has been exercised upon wrong
lines even though all the members of the Court of Appeal should think
that they might have exercised the discretion otherwise.

This court has, therefore, to consider whether in the circumstances
the learned judge has exercised a proper judicial discretion.

First of all, with regard to the, refusal to set aside the award for
misconduct. I cannot see that the efforts of Mr. Law to bring this

long drawn out arbitration to an end amounted to misconduct: it is
said that the arbitrator appointed by the court has no greater status
than any other arbitrator and I entirely agree so far as the weight to
be given to his opinion is concerned, but I think it is reasonable to
expect that such an arbitrator, being obviously the member least likely
to be prejudiced, should act as chairman and assume a certain re-
sponsibility for communicating with the parties and arranging meetings
and so forth.

I do not think that Messrs, Law and Izmirlian were guilty of mis-
conduct in making an award at a meeting to which the third arbitrator
had been summoned and after he had notified them of his intention
not to act further in the arbitration and in submitting the award to the
court with an explanation of the circumstances in which it was signed. .

I have rather more doubt about the argument that, having regard

to the enforced detention of the plaintiff in Greece, the. arbitrators
were depriving him of -his right to be heard by them before they
made their award, and if I had been an arbitrator I might have been
in favour of postponing a decision, but I am not prepared to say that
the arbitrators were guilty of misconduct.

The case of Rigopoulo v. Rigopoulo AC-APP-18-1921¹ was quite
different and in my opinion has no bearing on this case whatever.

Therefore, I think the appeal against the refusal to set aside the
award must be dismissed with costs.

As regards the cross-appeal from the order remitting the case to
a reconstituted board of arbitrators and from the refusal to accept the
award as the award of a majority I have already said that I consider
the learned judge had a discretion; as he did not think so and acted
as if he had no discretion I, therefore, think the case should be re-
mitted to the learned judge with a direction that he has a discretion
in order that he may exercise it.

The cross-appeal therefore is to some extent allowed, but I think
as it is not fully allowed the proper order is that each party should pay
his own costs of the cross-appeal.

January 10, 1923. Williamson J.: I agree. I consider that
section 93 (2) of the Civil Justice Ordinance 1900 gives the judge

1 The record of this decision could not be traced, but a very brief summary
bf it appears in The Digest of the Decisions of The Court of Appeal of the
'Sudan, from May 15, 1915, to February 3, 1926, at p. 39.