Principles

·  EVIDENCE — Estoppel — Parties to the estoppel — Only representee may take advantage of the estoppel.

·  ARBITRATION — Setting aside — Grounds for — Not findings of fact against weight of evidence.

Obiter dictum: Estoppel operates only between the representor and the representee; only the representee may make use of the estoppel
A. Court may not set aside an arbitration award on the grounds that it waa  arrived at against the weight of evidence
 

Judgment

Advocates: Mohamed Yousef Mohamed …………for petitioner

Omer Abu Bakr for Attorney General ..………… for respondent

M. Y. Mudawi, P. J. September 10, 1960:— This is an application under Civil Justice Ordinance 1929, s. 167, made by advocate Mohamed Yousef Mohamed on behalf of Ibrahim El Attag, a transport contractor of El Obeid, to file an award pronounced by Sayed Salah El Din Hassan, Resident Magistrate, El Obeid, in his capacity as a sole arbitrator in the dispute between the said applicant and Sudan Government in respect of a transport contract entered into by the two disputants on August 12, 1957 to be performed during the financial year 1957/1958.

The agreement regulating the legal relations of the two contracting parties is embodied in “Exhibit A” which if I may say so is an inartistically drawn document that can hardly claim to be an example of intelligent draftsmanship. It contains, inter alia, the following terms:

            5(b) The permitted maximum load shall be 154 kontars (7 tons) including back seats in the case of any motor vehicle fitted with a seven ton chassis or 110 kontars (5 tons) including back seats in the case of any motor vehicle fitted with a five ton chassis or 66 kontars (3 tons) including back seats in the case of any motor vehicle fitted with a three ton chassis. Pay shall be made in accordance with the actual weight carried.

16.   If any dispute shall at any time arise between the parties hereto in respect of the constructior of these conditions or as to the rights and liabilities of the said parties the same shall be referred to the arbitration of a single arbitrator to be nominated by the parties or in default of their agreement by the Chief Justice.

“Schedule of Rate

11.           Stores and Materials.

1                   Full lorry load 7 tons per mile    165m/ms

2                ,,     ,,,      ,,,      5  ,,     ,,    ,,         l55m/ms

3                 ,,           ,,         3  ,,     ,,     ,,      050m/ms

4                   load less than one full lorry per kontar

per mile                                                               001.5m/ms

5               small percels (weights less than one kontar)

per kontar per mile                                  000.5m/ms

                  6                Bulky stores per kontar per mile                002.5m/ms

In August, 1957 the contractor started to work, and during the frist two months all seemed to be going on smoothly and satisfactorily How ever in October of the same year a dispute the subject matter of this arhitration, arose between the two parties in respect of the scale of payment  to be applied to the transport of Iocust bait. The Ministry  of Agriculture  before 1956 used to mix a poisonous substance with ordinary dura to produce the material termed locust bait in its final form. ‘in  l956 the ministry  for some reason or other made a change over from dura to “Ful Sudani Husks The 1956/1957 contractor, a certain Basili Bushara, was the first contractor to experience transport of the new material. He complained to the authorities about its bulky nature, and something near to a dispute arose between contractor and contractees but ultimately the matter was settled through direct negotiations’ The present dispute between Sudan Government and Sayed Ibrahim El Attag is almost of the same nature. The Government claims that the Locust Bait (Ful Sudani Husks contained in 40 kilogram sacks) is ordinary material (not a takweesha, i.e., bulky stores) and as such it should be governed by para (ii) item 2 of the schedule of payments. Ibrahim El Attag on the other hand claims that Locust Bait is takweesha (bulky stores) and he should therefore be paid in accordance with para (ii) item 6 of the above quoted schedule.

The disputants. as the evidence reveals, made sincere though fruitless efforts to reach a settlement. However, when their efforts were exhausted, they had to resort to Clause 16 of the agreement and refer the matter to arbitration.

On March 30, 1959 the Honourable Chief Justice of the Sudan delegated his authority to appoint an arbitrator under the said Clause 16 to Province Judge, Kordofan, who thereupon appointed Sayed Salah El Din Hassan, Resident Magistrate, El Obeid, as a sole arbitrator to hear the dispute and make an award thereon. Sayed Salah started hearing the cause on May 3, 1959 and after several sittings the hearing, which was, in my judgment pretty exhaustive, was closed on November 7, 1959.

Immediately after the completion of the hearing the arbitrator anounced his decision. The issues on the basis of which the award was made were formulated as follows:

1-What is the maximum full carrying capacity of a five tons lorry in sacks of locust bait? (40 kg. Sacks)

(a) Is it 125 sacks?

(Defendant)

 (b) Is it 80 sacks?

(Plaintiff)

(2) Does schedule 2 concerning the takweesiha form part of the contract?

(3) If yes, do Locust Bait loads come within the description of takweesha contained in the second schedule of the contract?

(Court open to both)

(4) What is the rate of payment to plaintiff?

(a) Is it in accordance with para (ii) item 2 of the schedule of rates? Or

(b) Is it in accordance with para (ii) section (item) 6 of the schedule of rates?

(5) To what relief, if any, is plaintiff entitled ?

There were the issues decided by the arbitrator

The award itself is a long reasoned document running into seven pages of foolscap. The decision, the part of the document with which we are most concerned, is contained in page 6 and runs as follows:

As regards the last issue I have decided to leave it open to the Sudan Government to make accounts with applicant in either of  the two ways shown below, whichever is economical to the Sudan Government

Either:

to pay plaintiff in accordance with paragraph (ii) section (item) 2 of the schedule of rates on the assumption that the carrying capacity ot five toas lorry is eighty sacks of locust bait only. This isto be done by dividing the whole number of sacks transported by the figure 80; the result will be the number of lorries used.

Or:

to pay plaintiff in accordance with para (ii) section (item) 6 of the schedule of rates on the assumption that the carrying capacity of a five lorry in a takweesha load is 125 sacks of locust bait only.”

On hearing the decision, Sayed Ibrahim El Attag made an application to file the award under Civil Justice Ordinance, s. 167. When the application was brought to the notice of the learned Attorney General of the Sudan, he objected to the award being filed and delivered a 14-page memorandum requesting this Court to set aside the award. The learned advocate or applicant likewise lodged a memorandum upholding the views of the urbitrator.

Before going into a detailed study of the objections raised by Sudan Government we feel it would be more convenient to draw an outline of the law relating to the power of this Court to interfere with decisions of arbitrators. Generally speaking, when parties decide to refer their dispute to the judgment of an arbitrator they do so because reasonably or unreasonably they want to keep away from the formalities and delays of the law and to ha a quick, though perhaps rough, decision. So they select their own Court and entrust it with the task of deciding the matter in dispute if ultimately the views of the chosen tribunal prove not to be to the liking of one or both of the parties the Courts of justice will quite naturally be reluctant to interfere and indeed when they decide to interfere a decision  rarely made) they do so cautiously and along lines strictly defined by our law.

This concept of the law cannot be put in words more neat than those used by Mr. Justice William in Hodgkinson v. Fernie, (1857) 3 C.B.N.S. 189 “The law has for many years been settled,” states William,J., “and remains settled at this day that where a cause or matter in difference is referred to an arbitrator ... he is constituted the sole and final judge of all questions both of law and fact. Many cases have fully established that position where awards have been attempted to be set aside on the ground of the admission of an incompetent witness or the rejection of a competent one. The Court has invariably met those applications by saying ‘you have constituted your own tribunal; you are bound by its decision.’”

Ten years later Chief Justice Cockburn in Re Hopper (1867) L.R. 2 Q.B. 367, summed up the law in the following words: “I would observe that we must not be over-ready to set aside words where the parties have agreed to abide by the decisions of a tribunal of their own selection unless we see that there has been something radically wrong and vicious in the proceedings.”

In 1958 Lord Justice Parker, as he then was (he is now the Chief Justice of England) stated in Meyer v. Leanse (1958) 2 Q.B. 371, 380, “Indeed, the approach that the court makes to an award has always been to support the validity of the award and to make every reasonable intendment and presumption in its favour.” His brethren the judges in the same case gave him their unreserved support; Lord Justice Jenkins said: “I entirely agree.” And Lord Justice Pearce in even stronger terms stated: “I agree with all that my Lord has said.”

These are the general principles governing the attitude of the Courts of Justice towards arbitrators’ awards. They do not interfere unless some thing vicious or radically wrong makes itself felt. In this case they have the power to set aside an award or to remit it for reconsideration by the same arbitrators. Those vicious and radically wrong things that expose the awards ‘to the interference of the Court are in this country found in Civil Justice Ordinance SS. 160 and 161. Section 160 deals with grounds on which the Court may remit an award for reconsideration, and Section 161 deals with the power of the Court to set aside an award.

Having these sections in mind, we now proceed to discuss the objections launched by the learned Attorney General of the Sudan against the award pronounced by Sayed Salah.

The learned Attorney General objects to the validity of the award on the following grounds:

(a) that the award is illegal on the face of it;

(b) that the arbitrator has proceeded illegally in the matter of arbitration in that:

(1) he has decided the issues against the weight of evidence before him,

(2) he has decided on evidence which in law was not admissible

(3) he has decided on principles of construction which the law does not countenance;

(c) that the award is uncertain and inconsistent;

The first two grounds of objection (“a” and “b”) are in my judgment based mainly on an allegation of illegality and for this reason I believe it will be more expedient to discuss them as if they constituted a single objection Of course to be effective such illegality should be apparent on the face of the award or on any document appended thereto; it must also be the basis of the decision.

The illegalities pointed out by Attorney General are:

(1) The arbitrator allowed extrinsic evidence to contradict and vary the written terms of the agreement (page 7 of the memorandum)

(2) The arbitrator was prepared to consider usage as a matter of common knowledge, i.e., a matter to be judicially noticed (page 9)

(3) The arbitrator wrongly invoked the doctrine of estoppel when he stated that the Sudan Government cannot be heard to say that the 5 ton lorry is capable of carrying more than 80 sacks of Ful Sudani Husk locust bait, as it had previously  agreed with Basili Bushara in a previous contract between the said Basili Bushara and the Sudan Government that 80 sacks are the full capacity of a 5 ton lorry.

With regard to (I) above, i.e., the admission of extrinsic evidence (P.W.2) I am afraid the witness did not contribute anything of value to the real dispute between the parties. The whole testimony is concentrated on whether 80 sacks of locust bait form a full capacity of a five ton lorry. This .is is not the fact in issue. The dispute is whether locust bait made of “Ful Sudani Husks” is Takweesha or ordinary material. This is the real point at issue and a decision on it is a decision on the whole dispute. Whether 80 sacks form a full lorry load or not is in my considered opinion completely irrelevent to this arbitration. The parties themselves, though in a garbled and ambiguous manner, told us that they wanted to know whether this particular locust bait is bulky stores or not. It is true that applicant mentioned something about 80 sacks being full capacity of alorry, but this is rendered completely ineffective by para 7 of the memorandum presented by the applicant, which unhesitatingly says that applicant is of opinion that locust bait is a takweesha. Hence the evidence of P.W.2 is as good as no evidence at all in so far as it deals with the 80 sacks business. The arbitrator ought not to have made a record of it. It is as irrelevant as evidence taken to show the colour of the hair or of the eyes of one of the Parties. Surely such evidence will not affect the situation of the arbitration either way. Hence I am not prepared to consider this evidence of P.W 2 as having any serious effect on the award.

With regard to (2), i.e., usage being a matter of common knowledge, it is true that the arbitrator mentioned on the first page of his award some thing about having invoked the customary usages adopted in transport at Kordofan and Darfur, which are to be considered as matters of common knowledge. He did not tell us in what respect and in what part of the dispute he invoked these usages. Further, he did not tell us what these usages are; most probably he meant usages defining takweeshas. However, we do not believe that the arbitrator relied in this matter on any judically noticed usage alone. He took evidence and conducted laborious demonstrations to find out whether locust bait is a takweesha or not.

Hence we need not go into the cánditions necessary to elevate a usage of trade to the level of a law to be judicially noticed without being proved, for in this particular case elaborate evidence was taken to prove the usage connected with takweesha loads. In view of the above, this contention is rejected.

With regard to the doctrine of estoppel, the arbitrator on page 7 of the award argues that the Government cannot be heard to deny that 80 sacks of locust bait are not a full capacity of a five tons lorry. The Government is estopped by its previous conduct in the settlement of the dispute with the previous contractor Basili Bushara .Undoubtedly, to allow the conduct of a party in a previous contract to operate as an estoppel in a subsequent contract with a third party is a very questionable proposition of law. In 2 Monir, Evidence 773 (4th ed. 1958) the author states: “Only parties and their privies are bound by the representation, and only those to whom the representation is made or intended to influence and their privies may take advantage of the estoppel. If the act was inter alia, there can be no estoppeI.” Anyway, as we stated before, the question of 80 sacks being a full lorry load has no bearing to the dispute between the two parties, and any mistake committed by the arbitrator in this respect should not be taken t affect the real issues. Therefore we need not waste much time on it and I should dismiss it as something dealing with a point not in dispute.

The Attorney General also challenges the decisions of the arbitrator on the ground that they were arrived at against the weight of evidence. Let us hasten to say that this is no ground for interference. This Court is not allowed by the law to substitute its own conclusions and inferences for those of the arbitrator. In Universal Cargo Carriers Corporation v. Citati (1958) 2 Q.B. 254, 262, C.J. Goddard stated: “If the arbitrator has found a fact by inference it is not open to the Court by inference to find the . contrary fact.”

In 2 Halsbury, Laws of England 60 (3rd ed. 1953) it is stated: “And where the question referred for arbitration is a question of construction, which is, generally speaking, a question of law, the decision of the arbitrator cannot be set aside only because the Court would itself have come to a different conclusion.”

In view of this we are not prepared to substitute our own conclusions and inferences for the conclusions and inferences of the arbitrator.

I

Another objection put forward by the learned Attorney General is that the arbitrator has decided on principles of construction which the law does not countenance.

In the opinion of this Court, there is nothing in the award to show that the arbitrator proceeded on principles of construction which the law does not counterance. Indeed he propounded no such principles.

The last and in my judgment the most reasonable objection raised by the Attorney General deals with the decision itself. The decision gives two alternatives of payment, i.e., either under para (ii) item 2 or para (Ii) item 6 of the schedule of rates. That is, the arbitrator decided that the locust bait lies within both paragraphs, and the Government is given the option to choose.

In my judgment the decision, for the following reasons, is a bad deci sion. It did not confine itself to the dispute between the parties. It went beyond that dispute. The parties are in conflict as to whether the locust bait made of the new material (Ful Sudani Husks) is bulky stores to be treated under para (ii) item 6 of the schedule or ordinary material to be treated under para (ii) item 2 ofsame. They are not in dispute as to whether 80 sacks of locust bait, whatever their weight may be, form a full capacity of a lorry or not. I maintain that this is not the dispute and this could be gathered from the statements of both parties in the first hearing and also from the memorandum (page 12 of the record) stating the claim of the applicant. It is true that the statement and the memorandum are in some places garbled and confused, specially when for no obvious reason they make references to the 80 sacks being full capacity of the lorry; but still the fact remains that their utterances taken all in all reveal one cause of dispute, that is, whether locust bait is a takweesha or not a takweesha. Hence the arbitrator, in deciding that 80 sacks of locust bait form a full capacity of a lorry and should be treated under para (ii) item 2, has decided a matter which nobody asked him to decide, and has consequently made his decision indefinite and therefore incapable of being executed.

In the result I order that the award be remitted to the same arbitrator for reconsideration on condition that he confines himself to the dispute, which is whether locust bait as such is a takweesha, i.e., bulky stores, or not; and further it is ordered that the arbitrator can at his pleasure take more evidence if he thinks it necessary.

No order as to costs.