(COURT OF APPEAL)

SUDAN GOVERNMENT v. BROWN INTERNATIONAL INC.

AC-REV-368-1967

Principles

Arbitration—Decree passed in accardance with an award—Civil Justice Ordinance, s. 167 –Wether revision is opplicable—Civil Justice Ordinance, s. 574 (1)

An application for revision under Civil Justice Ordinance, s. 174 (1) is applicable to a decree passed in accordance with an award under Civil Justice Ordinance, S. 167, because once an award is filed and a decree is passed on its strength, then it loses its identity as a decision of a private tribunal and is transformed into a decree of a competent court.

Advocates: Osman Khalid…………… for the Attorney-General

                                                           for applicant

Abdel Wahab & Tigani……………… for respondent

Judgment

Mahdi Mohamed Ahmed J. September 10, 1969: —This note deals only with the preliminary objection. Hence our concern will be confined to such part of the facts as directly pertains to or sheds light on the issue.

On October 13, 1962, applicant and respondent entered into a written contract for the construction of two berths at Port Sudan harbour. The said agreement contained an arbitration clause which stipulates that any

              dispute over the performances or non-performances of the contract shall be referred to a Board of Arbitrators consisting of three persons. A dispute arose and was referred to arbitration in accordance with the terms of the contract. The board published its award on July 2, 1965. The board awarded respondent 1,160,942 United States dollars in full satisfaction of his claim. On August 17, 1965 respondent applied for filing the award under the Civil Justice Ordinance, s. 166. On October 13, 1965 applicant applied for setting aside the award on the ground of misconduct. The Province Judge, Khartoum, on May 23, 1967, refused to set aside the award and issued a decree in accordance with it.

On June 4, 1967 applicant applied for revision of the above order and requested an extension of time to submit his grounds, which request was granted. He filed his grounds on June 25, 1967. The hearing of the application was adjourned several times, and on May 25, 1968 respondent’s counsel raised a preliminary objection to the effect that no application for revision would lie against a decree passed in accordance with an award. Applicant’s reply was filed by the Attorney-General on October 5 , 1968.

Before going into the merits of the objection, I had better clear the way by setting down the points that were not in controversy between the parties:

1. It is conceded that in the case of an award reached without the intervention of the court, the court to which an application under Civil Justice Ordinance, s. 166, is made for filing such award has no power to remit it or set it aside under the Civil Justice Ordinance, ss. 160 and 161. All it can do is either to file or refuse filing and award under Civil Justice Ordinance, s. 167.

2 . It is further conceded that in the present case the award was filed and the decree passed under Civil Justice Ordinance, s. 167.

3.  It is also conceded that no appeal lies from an order filing an award under Civil Justice Ordinance s. 167, and no appeal lies from a decree passed according to it except in so far as such a decree is in excess of or not in accordance with the award.

4  . It is again conceded that the Attorney-General on behalf of applicant is not challenging the present order and decree by way of appeal.

Thus the issue boils down to whether applicant has a remedy available to him by way of revision against an order filing an award under the Civil Justice Ordinance, 5. 167, or against a decree passed on the strength of such an award.

In a nutshell the contentions of respondent’s counsel are that: Arbi tration proceedings are special proceedings. The Code provided very limited rights of appeal from orders and decrees made on such proceedings. By doing so the legislature intended to clothe the awards of arbitrators

with finality. This is even more so in the case of arbitrations conducted without the intervention of the court. Respondent’s counsel cited a horde of Indian authorities tending to show the reluctance of the Indian High Court to interfere with awards by way of revision under the Code of Civil Procedure, s. 155 He concluded therefrom that the general provisions of the Civil Justice Ordinance, s. 174 (1), are not applicable to arbitration proceedings because of their special nature and therefore, when the code does not provide for appeal no revision would lie.

It is needless to say that arbitration proceedings are of a special nature, and that an award is the final decision of a private tribunal of the parties’ choice. This is evidenced by the fact that the provisions governing arbitration in the Civil Justice Ordinance are contained in Part VIII which is given the title “special proceedings “. No doubt it was more so when the proceedings were conducted without the court’s intervention. This is equally evidenced by the fact that the court to which an application is made to file an award under the Civil Justice Ordinance, s. 166, does not possess the powers under the Civil Justice Ordinance, ss. 160 and 161 which it possesses in the case of an award reached with the intervention of the court. In can only file or refuse to file the award.

All the above propositions are quite true. But in my opinion once an award is filed and a decree passed on its strength, it loses its identity as a decision of a private tribunal. It becomes an authoritative pronouncement having formal sanctity. It is transformed into a decree of a competent court, and is recognised and enforced as such. Thus a decree is not a mere formality following the filing of the award, but a change of its status. Hence arbitration proceedings at their culmination undergo a process which changes their status from a decision of a private tribunal into a court decree and once it assumes the new status it loses its special nature. I am not, therefore, in full agreement with the contention of learned counsel for the respondent that arbitration proceedings retain their special nature all through.

Respondent’s advocate cited a number of Indian decisions which illustrate the reluctance of the Indian High Court to interfere by way of revision in orders made and decrees based on awards, and he jumps to the conclusion that finality is an attribute of awards in the Indian jurisprudence.

In my opinion the attitude of the Indian High Court is not self-induced, nor does it emanate out of respect for finality of awards. Such an attitude is superimposed by the Indian legislature. The Indian Code of Civil Procedure, s. 155 grants the High Court very limited revisionary powers. To show the limits of such a power it will be better to quote the text of the section which runs as follows:

“The High Court may call for the record of any case which has been decided by any court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate court appears:

a. to have exercised a jurisdiction not vested in it by law, or

b. to have failed to exercise a jurisdiction so vested, or

c. to have acted in the exercise of its jurisdiction illegally or with material irregularity.

the High Court may make such order in the case as it thinks fit.”

The above text speaks for itself. The limited nature of the power is self-evident. The scope of the power is discussed in several Indian authorities. In the leading case of Amir Hassari Khan v. Sheo Baksh Singh (1885) Cul. 6, Vol. 1 Mulla, Code of Civil Procedure (13th ed. 1965) p. 506, the Privy Council commented on the scope of section 115 as follows:

“The question therefore is: did the judges of the lower courts in this case, in the exercise of their jurisdiction, act illegally or with material irregularity? It appears that they had perfect jurisdiction to decide the question which was before them (namely whether the suit was barred as res judicata) and they did decide it. Whether they decided it rightly or wrongly, they had jurisdiction to decide the case; and even if they decided wrongly, they did not exercise their jurisdiction illegally or with material irregularity.”

Again in the case of Balkrishna Udayar v. Vasudeva Ayyar (1917) Vol. 11 A.I.R. Commentaries, Civil Procedure Code, pp. 1578—1579. The Privy Council spoke in more precise language:

It will be observed that the section (115) applies to jurisdiction alone, the irregular exercise or non-exercise of it, or the illegal assumption of it. The section is not directed against the conclusions of law or fact in which the question of jurisdiction is not involved.”

The Indian Supreme Court in the case of Keshardeo v. Radha Kishan (1953) 53 SC 23, cited and approved the observations of Bose J. in his order of reference in Narayan Sonoji v. Sheshrao Vithoba (1948) 48 A.I.R. Nag. 258, which runs as follows:

“The words ‘illegally’ and ‘material irregularity’ do not cover either errors of fact or law. They do not refer to the decision arrived at but to the manner in which it is reached. The errors contemplated relate to material defects of procedure and not to errors of either law or fact, after the formalities which the law describes have been duly complied with both in letter and spirit.”

The above utterances of the highest tribunals in India disclose the fact that the revisionary power of the Indian High Court is limited in nature and scope and its objective is to rectify the material defects of procedure.

On the other hand the courts of this country do not suffer from such limitations. The Civil Justice Ordinance, 5. 174 (1), is couched in sweeping terms. It provides:

"Subject to such conditions and limitations as may be prescribed any person considering himself aggrieved by a decree or order from which no appeal is allowed may apply for the revision of such a decree or order.”

It must be noticed that the Civil Justice Ordinance, s. 174 (1), is free from the restrictions which afflict the Indian Code of Civil Procedure, s. 115 and curb the revisory power of the High Court. Not only that; the Civil Justice Ordinance, s. 179, expressly authorises the court hearing the application for revision to go and give judgment on the merits. Moreover, the Sudan courts did not, of their own accord, impose restrictions on their powers. The Sudan Law Journal abounds with precedents showing the interference of the revisional courts by way of revision when a lower court misconceived a point of law or went astray on a point of fact. I would just cite a few examples:

1. Hellenic Community v. The Petit Bazaar (1956) S.L.J.R., 4

2.  Costis Trizis v. Idris El Kanzi (1960) S.L.J.R., 222

3 . Neima Ismail v. Heirs of Mahmoud Mohamed Gabil (1961) S.L.J.R., 181

4 . Chotalal Samji v. Ahmed El Sayed El Barbary (1962) S.L.J.R., 139

The sweeping terms of the Civil Justice Ordinance, s.174 , (1), and the practice of the Sudan courts did not escape the notice of the learned advocate for respondents. However, in order to reconcile the sweeping away of the section with his contention of finality, he engaged himself in subtle arguments which landed him nowhere.

So far we have dealt with the special nature of the arbitration proceedings and seen that it ceases to exist when the award acquires the status of a court decree. We have also dealt with the attitudes of the Indian High Court and seen that it is superimposed by the legislature, and does not pay tribute to finality of awards. We have also seen that our courts do not suffer similar afflictions. It is needless to say that the Indian attitude does not govern our decision but for the above reasons it will be pertinent to say that it is not fit to serve even as a guide.

We will now deal with the final conclusion of respondent’s counsel that the legislature by providing a limited right of appeal in arbitration proceedings intended to shut the door in the face of any remedy by way of revision.

In my opinion this contention does not stand true even in the Indian

                       legal practice. I will now quote from Vol. II B.N. Banerjee, Law of Civil Appeals and Revision” 2nd ed. 1964) pp. 801/802:

“An interference with award in revision is much more objectionable than on appeal. But the powers of the High Court under section 115 of the C.P. Code can be invoked even in cases where appeals lie to the lower appellate court. It will interfere in revision where the existence of the alternative remedy is doubtful or where the alter native remedy is inconvenient or is not efficacious, or is barred, or where non-interference will lead to multiplicity of proceedings and unnecessary expense and delay, or result in grave injustice.

In an arbitration proceeding, without the intervention of court, the court passed an order refusing to record the award. Such an order is revisable. The jurisdiction of the revisional court should not be wider than the jurisdiction of the appellate court. A revision is held competent against an order passed on an application under section 39 of the Arbitration Act.”

Again in Vol. 1, A.I.R. Manual, Civil and Criminal, (2nd ed. 1959) we find at page 390 the following remarks under the heading “Revision.”

“There is nothing in section 39 or section 41 which in any way takes away the powers that the High Court possesses of entertaining petitions for revision under section 115 C.P. Code. A revision under section 115 Civil P.C. against an order passed under section 39, Arbitration Act is competent.”

The Indian Arbitration Act 1940, s. 39 is taken almost verbatim from the Civil Justice Ordinance, s. 170 (1). It embodies the same six orders which are appealable.

It is also stated in the above reference that:

“It is within the competence of the High Court to entertain a petition for revision against an order dismissing an application for filing an award or passing a decree thereon.” 54 A.I.R. 1954 Punj. 19 D (191)

It appears from the above that the Indian High Court, will not refrain from interference by way of revision in arbitration proceedings in an appropriate case. To my mind the situation is not different in this country. The decision of the Court of Appeal in the case of Mohamed Osman Abdel Nabi v. Abdullah Shaddad AC-REV- 363-1960 (1964) S.L.J.R., 131, is an authority to the point. It was a case of arbitration conducted without the intervention of the court. The award was filed under section 167 (1) and a decree was passed, at least in the opinion of the lower court, in accordance with the award. Nevertheless the Court of Appeal entertained

an application for revision. The fact that the Court of Appeal subsequently discovered certain defects in the procedure of the lower court is not material. The crucial point is that the Court of Appeal did entertain an application for revision in such a case. The Honourable Chief Justice rejected in clear and strong language the contention that a revision would not lie in the case of arbitration proceedings in the absence of appeal. He commented as follows:

“The argument of the learned advocate for respondent, which was accepted by the Honourable Judge of the High Court, is that because Civil Justice Ordinance, section 170, specifically provides for certain arbitration orders to be appealable, a party aggrieved against any decision based on the award who cannot bring his case within any of the cases specified in the section referred to has no remedy whatsoever either by way of appeal or revision. In other words, the learned advocate is contending that the decree in this case is based upon an implicit order filing the award under Civil Justice Ordinance, section 167, and as an order filing an award is not specifically mentioned in Civil Justice Ordinance, section 170, then no application for revision of the decree will lie. I have already dealt with the point that an order filing an award cannot be implied and this is sufficient to dispose of the argument, but I would go further and say that even if such an order were expressly made the argument is still unacceptable, for it fails to appreciate the distinction between an appeal and a revision. An appeal is a substantive right given to the aggrieved party, while a revision is simply a power given to the court and for the exercise of which any person aggrieved by a decree or order from which no appeal is allowed may apply. To contend therefore, that that person who is deprived of his right of appeal is also deprived of the remedy of revision would be to render nugatory the whole provisions of the Civil Justice Ordinance relating to revision.

The learned advocate for respondent contends that arbitration proceedings are special proceedings and that if the legislature made certain arbitration orders appealable, then the intention to apply the general provisions as to revision to those orders not made appeal able would be to strip arbitration proceedings of their special nature. I regret to say that this is an argument which is void of all logic.”

To sum up; revisory powers are granted for the promotion of justice. The concept of absolute finality of award is incompatible with such object. No decent legal system will hesitate to interfere with award by way of revision if there is grave injustice or serious abuse of the process of law.

Therefore, if my learned colleague agrees, the preliminary objection should be dismissed.

Tawfig Abdel Mageed J. September 10, 1969:—I concur..