- (1.) Protracted, time consuming, exasperating and atrociously expensive court trials impelled an alternative mode of resolution of disputes between the parties: arbitrate-don't litigate. Arbitration being a mode of resolution of disputes by a Judge of the choice of the parties was considered preferable to adjudication of disputes by court. If expeditious, less expensive resolution of disputes by a Judge of the choice of the parties was the consummation devoutly to be wished through arbitration, experience shows and this case illustrates that the hope is wholly belied because in the words of Edmond Davis, J. in Price v. Milner, (1966) 1 WLR 1235, these may be disastrous proceedings.
(2.) A petty labour contractor in search of its labour charges in a paltry amount of Rs. 4,25,343-00 from a giant foreign engineering and construction company which had undertaken to erect a thermal power station at Barauni in Bihar State under a contract dated February 27, 1960, with Bihar State Electricity Board, file a suit in the year 1963 which stands stayed without the slightest progress for last 17 years and with end nowhere in sight. Plaintiff (appellant herein), a private limited company, a labour contractor, entered into a sub-contract for erecting two complete radiation type steam boilers as part of Thermal Power Station at Barauni, with the defendant Invest-Import, a Yugoslavia based company which in turn had entered into a contract with the Bihar State Electricity Board for setting up the power station. Plaintiff sub-contractor, pursuant to the sub-contract dated July 10, 1961, had to supply skilled labour, unskilled labour and apprentice labour, to carry out the erection work and incidentally to do other things provided in the sub-contract. The contract also provided for employing extra labour force as well as carrying out extra stipulated job for installation, substantial alteration of design etc. as and when desired and directed by the principal contractor, respondent herein. In carrying out the work undertaken under the sub-contract, the plaintiff claims that it carried out some extra work for which it was entitled to recover Rs. 70,000 from the respondent. There were also other claims made by the appellant which were not satisfied or met with by the respondent with the result that the appellant filed Suit No. 1359/63 on the original side of the High Court at Calcutta on Aug. 1, 1963, to recover Rs. 4,25,343-00 from the respondent. The split up of the total claim has been set out in the particulars appended to para 16 of the Plaint. The appellant also annexed sub-contract between the appellant and the respondent as Annexure 'A' to the plaint. On Aug. 2, 1963, on a notice of motion taken out by the appellant, a learned single Judge of the High Court granted an ad interim ex parte injunction restraining the respondent from withdrawing the money due to it from the Bihar State Electricity Board.
(3.) Pursuant to service of notice of motion taken out by the appellant, on August 8, 1963, the respondent appeared through one Ilija Kostantinovic, Manager of the respondent company posted at its office at 36, Ganesh Chandra Avenue, Calcutta, and moved an application purporting to be under S. 151 of the Code of Civil Procedure, contending, inter alia that the sub-contract between the appellant and the respondent incorporates an agreement to refer all the disputes arising out of the sub-contract to arbitration and, therefore, the suit should be stayed. The clause spelling out agreement to refer disputes to arbitration was reproduced in the petition. It reads as under "Any mutual disputes should be settled in mutual agreement, however, should they fail to reach an agreement in the way, both contracting parties accept the jurisdiction of the Arbitration by the International Chamber of Commerce, in Paris with application of Yugoslav materials and economical law.";