Court sets aside arbitration award and removes arbitrator for filing out of time without written application for extension.

[*602] 1982 August 28

(HADJITSANGARIS, P.D.C. AND ARTEMIS, S.D.J.)

IN THE DISTRICT COURT OF LIMASSOL

Nicos Victoros and Another,

Plaintiffs,

v.

Takis Vashiotis.

Defendant.

(Action No. 5739/80).

Arbitration - Arbitrator’s award - Setting aside of and removal of arbitrator - Section 20 of the Arbitration Law, Cap. 4 - Piling of award out of time - Enlargement of time within which to file award - Can only be ordered upon a written application - Court has no jurisdiction to enlarge time ex proprio motu - Section 18 of the Law - Arbitration set aside as filed out of time and arbitrator removed.

R. Michaelides, for Applicant-Defendant.

Chr. Pavlou for P. Pavlou, for Respondents-Plaintiffs.

RULING

The ruling of the Court was delivered by:-

ARTEMIS, S.D.J.: By an agreement between [*603] the parties in this action and by an order of the Court based on such agreement, all technical matters in the action were referred to arbitration on 12,9.81. On 14.5.82 the Arbitrator filed his award at the Registry of the Court in a sealed envelope. On 3.7.82. the Defendant filed the present Application by which he applies for the setting aside of the award of the Arbitrator or for his removal as Arbitrator. The Application is based on s.20 of the Arbitration Law, Cap. 4, which reads as follows:

"(1) Where an arbitrator or umpire has misconducted himself or the proceedings, the Court may remove him.

(2) Where an arbitrator or umpire has misconducted himself or the proceedings, or an arbitration or award has been improperly procured, the Court may set the award aside”.

The objection of the Defendant to the award, as we understand it, is threefold:

(a) that the principles of natural justice were violated;

(b) that the procedure provided by the Law and the Rules was not complied with; and,

(c) that, whereas the order provided that the award should be filed within 90 days, it was filed out of time, namely, five months after the expiration of such period. [*604]

The complaint of the Defendant is that, even though the views of other persons were received by the Arbitrator (see para, (3) of his award), the Defendant was never given the chance to be present and comment upon such views. In support of his .argument on this point he cited the case of Charalambos Galatis v. Sofronios Savvides and Another.

(1966) 1 C.L.R. 87. It is obvious that an opportunity was not given to the Defendant to be present when the views of other experts were taken and it is not challenged by the other side that no hearing was fixed for the taking of any evidence. However, Rule 9 of Order 49, which applies on the matter, pursuant to s.30 of Cap. 4, reads as follows:

"The arbitrator shall appoint the time for the conduct of the proceedings before him, and the Registrar shall at his request give notice to the parties of the time and, place at which the proceedings before him will be held. The notice shall be not less than a ten days' notice".

And Rule 10 of the same Order:

"The proceedings before the arbitrator shall, as nearly as possible, be conducted in the same way as proceedings before the Court, and he shall have power to administer oaths to the witnesses. ............................................................ ".

The answer of learned Counsel for the Plaintiffs on this point is that where arbitrators are appointed on [*605] account of their skill and knowledge of the subject-matter, they are not required to decide by the hearing of evidence. In the present case the Arbitrator was such an Arbitrator and it is submitted that, even though he had power to call any witness, he decided not to do so. Citing from Russell on Arbitration, 18th Edn., at p.193, one reads:

"... they (arbitrators) may consult other persons when it is necessary that they should do so in order to decide the matter submitted, and may adopt the views of the persons consulted as their own".

This, and what follows eight be authority to the submission that where evidence as such is not required and is not called, the consultation with other persons need not be by way of a hearing, and in such a case, no notice should be sent to any of the parties, even though one might legitimately, argue that the principle natural justice would at least require that notice he sent to the interested parties so as to give them an opportunity to be present and be able to comment on the views taken by the Arbitrator from third parties. The fact that it is left within the discretion of the Arbitrator not to hear the parties' advocates is not contrary to this principle, as this is not a question of hearing the parties, but only of giving them the opportunity to hear what others have to say. In support of his argument learned Counsel for the Plaintiffs referred to the case of Mediterranean end Eastern Export Co. Ltd. v. [*606] Fortress Fabrics (Manchester'). Ltd., (1914-8) 2 All E.R. 186. We feel, however, that it is unnecessary to decide this delicate point one way or the other as the Application may be disposed of on other issues raised, as it will appear hereinafter.

Another complaint of the Defendant is that no documents or exhibits put before the Arbitrator were sent by him. at the same time that his award was submitted to the Registrar, as provided by Rule 13- of Order 49, and no notice of the filing of the award was sent to the Defendam This, the Defendant argued, is an answer to the Plaintiffs' allegation that by waiting till today to. apply to set aside the award, he has waived any rights he may have had. We are in full agreement with this as the Defendant applied to set aside the award as soon as he was informed and learned that the award had been filed in Court. Therefore, he cannot be held to have waived any of his rights.

We now come to the question of the period within which the arbitration should have been carried out and the award filed. Even though both Counsel in their arguments kept on referring to a period of sixty days, if one looks at the file of the Court, it is plain that even though originally the arbitration agreement between the parties provided for the period of sixty days, when the order was made in Court, the period was fixed at three months, that is, ninety days. But even so, the award was filed

months after the expiration of such period. It is obvious that [*607] as an award must comply with the terms of the arbitration agreement

and any order made by the Court pursuant to it, where a provision is made as to time, the award must comply with such provision as well. (See Russell on Arbitration, 16th Edn., pp. 219 and 235). However, s. 18 of Cap. 4. provides that "the time for making an award may from time to time be enlarged by order of the Court whether the time for making the award has expired or not”. Commenting on s.13 of the Arbitration Act 1958, which contains an identical provision to that of our s.18, Hussell on Arbitration, 18th Edn., says the following at p.287:

"The power can be exercised although the award has in fact already been made after the period fixed for making it has expired. The effect of an order of enlargement is that the extended time is to be treated as if it had been original— ly given in the arbitration agreement. Consequently, the award and all else done in the arbitration during such extended time is rendered valid and effective".

(See Oakland Metal Co. Ltd. v. Benaim (D.) & Co. Ltd., (1955) 2 Q.B. 261).

It is further said on the same page that this power is entirely discretionary and will only be exercised where the Court thinks fit in any particular case and, where there has been inexcusable delay in applying for an enlargement, the application will be refused. However, the [*608] Court in exercising its discretion will examine whether the time provision was of the essence of the submission or merely a regulation for the observance of the Arbitrator. (See Darnley (Earl of) v. London, Chatham & Dover Ry.,

(1867) L.R.2 H.L. 43; Knowles & Sons Ltd. v. Bolton Corporation, (1900) 2 Q.B. 253).

Learned Counsel for the Plaintiffs argued that the Court on its own motion could postpone the delivery of its ruling giving thus an opportunity to the Plaintiffs to apply at this stage to enlarge the time. We disagree with such submission as such a step by the Court would be unwarranted as there might be no intention for such an application. Counsel;, however, has stated that if this is done, he will apply for such an enlargement in writing and further on in his argument he stated that he indeed intends to make such an application. However, till today no application has been filed and we consider it totally improper to stay our ruling pending such application, which in any case, if it was the intention of the Plaintiffs to file, is now long overdue. It is also beyond argument that we have no jurisdiction to enlarge the time ex proprio motu as an enlargement of time may only be ordered on a written application (in England usually done by originating summons), which should give grounds enabling the Court to exercise its discretionary power one way or the other.

In the light of the aforesaid, the award is hereby set aside and the Arbitrator is removed. [*609]

The costs of this Application are awarded against the Plaintiffs and they will be assessed at the end of the proceedings by the Registrar.

Award set aside. Costs of

application against plaintiff.