D.K.Kapur - (1.) .
(2.) HE judgment under appeal was given by a learned single Judge on an application under section 34 of tHE Arbitration Act praying for stay of tHE suit. THE learned single Judge HEld that tHEre was an arbitration clause and tHE suit had to be stayed. THE arbitration clause in this case was found to exist because of certain clauses in tHE Constitution and Regulatins of tHE Paper Merchants Association, Delhi (Regd.) Chawri Bazar, Delhi. THE said Constitution shows that one of tHE aims and objects of tHE Association is to settle tHE disputes between its members and to arbitrate amongst contesting parties. THE power to appoint an arbitrator is given to tHE Executive Committee under Clause XVI. THE particular clause reads as follows: "15. To appoint Arbitrators, Umpires, Appellate Authority for settling disputes between members and members and non-members, and to make rules and regulations governing tHE proceedings for arbitration, etc. In case of any dispute between members of tHE Association tHE same shall be referred to tHE arbitrator whose decision shall be binding on tHE members," In addition to this, the contract concerning which the disputes have arisen between the parties have bills which contain the following printed matter "In case of any dispute the judgment of the Tribunal or any other authority appointed by the Paper Merchant Association. Delhi (Regd.) will be final and binding." It was held by the learned single Judge that the provisions contained in clause 15 of reproduced earlier and particularly the last part of which shows that there had to be an arbitration. Further, in the application for membership given in the Constitution and Regulations there are the following words : "I/we further solemnly declare that in event of any dispute between me/us and other member of the Association I/we shall gladly use the good offices of the Association for amicable settlement of such dispute, according to the rules framed by the Association." Though, all these three provisions look alike, they are not alike. In the printed clause 15, which contains the powers of the executive committee, it seems that any dispute between the members of the Association has to be referred to arbitration. It does not say that that arbitrator will be of the association or appointed by the Association. However, the Executive Committee of the Association has been given the power to appoint arbitrator. In the clause which appears on the bills it is stated that a judgment of the Tribunal or other authority will be final and binding. The judgment of a Tribunal or any other authority is a vague term because nothing is stated as to who or what that Tribunal is or who that authority is. The mention of the word 'judgment of the Tribunal' seems to imply a private court set up by the association which will give judgment. It does not prima facie appear to be an arbitration agreement. The definition, an 'arbitration agreement' is an agreement by which the parties to the agreement agree to submit future or present disputes lo arbitration for settlement. The wording of the clause appearing on the bill does not appear to be in this form. On the contrary it seems to us that the parties agreed to a private court to be set up by the association to give final judgment in their case. It is quite different from an agreement to refer disputes to arbitration. The application form shows that the good offices of the association have to be used for reaching an amicable settlement. An amicable settlement is also different from a reference to arbitration. It thus appeals that there are three different types of arrangement appearing for settling dispules. One to an arbitration, (2) to a Tribuual and (3) for an amicable settlement by the association. There is a reference that some rules and regulations will be made by the Association regarding how the arbitrations are to be conducted and how disputes are to be settled. It does not appear that any such rules or regulations have been made. The power to say a suit under section 34 is normally exercised in practically every case. However, it is a discretionary relief and if the clause or the alleged arbitration agreement appears to be vague and indefinite the Court will be hesitant to stay the suit. During the course of argument the learned counsel for the respondent had referred to a full Bench judgment of Punjab High Court Ram Lal v. Punjab State, AIR 1966 Punjab 436 where a controversy bad arisen as to whether a particular clause was an arbitration agreement. The clause in question had the following words : "5. In matter of dispute the case shall be referred to Supdting Engineer of the Circle whose order shall be final." The respective contentions of the parties were that the word Arbitrator or arbitration should appear in order to make a clause in arbitration agreement but the Court inferred from the facts and circumstances of the case that the clause was an arbitration agreement because it was a standard type of printed form on which the State was entering into contract. A previous judgment of the Punjab High Court to the contrary was overruled and the jadgment which was followed was the earlier Lahore Judgment entitled Governor-General in Council v. Simla Banking and Industrial Co. Ltd., New Delhi and another AIR 1947 Lahore 215, where a similar clause had been held to be an arbitration agreement. The clause in the case decided in the Lahore High Court was that ths decision of the Superintending Engineer shall be final etc. Now, the Lahore High Court, after holding that this was an arbitration agreement, came to the conclusion that the agreement was too vague and indefinite to be applied and observed : "The words in the agreement are too vague and indefinite and it is not possible in my view to have the matter decided by the person who held the office of the Superintending Engineer either at the time of the accrual of the cause of action or even when the suit was instituted. These are no longer the Superintending Engineers and have in fact retired from the service of the Government. It becomes impossible for that reason to give effect to this agreement which mist be declared to ba uaenforceable for want of certainty" These words, interpreting a similar clause, seem to apply with full force to the present case There is vagueness about the scope of the alleged arbitration agreement. There is a vagueness as to how and who is to be the Arbitrator, and how he is to be appointed The reference in the bills, is to a Tribunal or other authority to be appointed by the Association. Which authority ? And which Tribunal ? Who in the Association has to appoint ? It is the Executive Committee or the entire Association ? Has the Association to hold a general meeting for appointing the authority, and how many persons are to be appointed ? These and other questions create a great uncertainty as to the practical applicability of the arbitration clause even if it exists. We are of the view that these doubts make it an unsuitable case for staying the suit. The Court's discretion should be exercised not to stay the suit even, if in the final analysis, this entire set of clauses amounts to an arbitration agreement, which itself is doubtful. We, therefore, accept the appeal and set aside the judgment under appeal. The stay order is discharged. The parties are left to bear their own costs. They will now appear before the Deputy Registrar on 9th December,;