A failure to pay is not necessarily a "difference." In London & North Western Rail. Co. v. Jones, [1915] 2 K. B. 35, in a case arising under a provisional order empowering a railway company to make an additional charge for the detention of trucks, which order contained a provision for arbitration, Rowlatt, J., said: "It does not, however, follow that the Courts cannot be resorted to without previous recourse to arbitration to enforce a claim which is not disputed but which the trader merely persists in not paying" (see also London & North Western and Great Western Joint Rail. Co. v. Billington, [1899] A. C. 79). Submission to foreign Court. A written agreement to submit a dispute to the decision of a foreign Court is a submission to arbitration within the Arbitration Act and, if no Court is specified, will be treated as a submission to whatever Court may be competent to deal with the dispute in the place named. Illustrations. 1. A bill of lading provided that any disputes as to the interpretation of its clauses were to be decided in Hamburg according to German law. Held that this clause must be treated as a submission to arbitration within the Arbitration Act, 1889, s. 4, and that although no tribunal was specified the contract must be deemed to mean that the disputes were to be submitted to the competent Court at Hamburg (The "Cap Blanco," [1913] P. 130). 2. The plaintiffs' steamer loaded at a foreign port under a berth note which provided that the defendants, the freighters, should do the stevedoring, and that "in case of any dispute arising at loading ports it should be submitted to an arbitration Court in the foreign country. The stevedoring account was signed by the Master without objection, and the defendants deducted the amount from the freight. The plaintiffs complained to the defendants in London that their stevedoring rate was too high and brought an action for the amount of the alleged overcharge. Held that "dispute" meant, not disputation, but matter in dispute, and therefore that the dispute was one "arising" at the loading port, and that the action should be stayed under s. 4 (The " Dawlish," [1910] P. 339). 3. G. agreed to serve K. & Co. on certain terms. G. was German and K. & Co. traded at Leipzig, but G. was to work in England. The contract referred all disputes to the Leipzig Courts, to be tried under German law. Held that this was a good submission and would not be disregarded by the Courts without good reason, and, no good reason being shown, an action in England was stayed (Kirchner & Co. v. Gruban, [1909] 1 Ch. 413. See also Law v. Garrett (1878), 8 Ch. D. 26; Austrian Lloyd S.S. Co. v. Gresham Life Assurance Society, [1903] 1 K. B. 249, cited ante, p. 36). The same principles would seem to be applicable where it is provided that a contract made or to be carried out in one part of the United Kingdom shall be governed by the law in force in another part, and that disputes arising thereunder shall be decided by the Courts having jurisdiction there. Illustration. A contract between an Irish corporation and a company registered and trading in England was made in Ireland, and was to be performed there. But an express term of the contract provided that it should "in all respects be construed and operate as an English contract and in conformity with English law." The corporation subsequently commenced an action on the contract in the Irish Courts, and the company applied for a stay on the ground that disputes had been submitted to the jurisdiction of the English Courts. Held that a stay should be granted (Limerick Corporation v. Crompton, [1910] 2 Ir. R. 416). Parol submission. A parol submission is generally perfectly valid. If, on the hearing of a summons before a judge, the parties consent that he shall adjudicate on the case, such consent is a parol submission to him as arbitrator, and his decision is binding as an award though, without the consent of the parties, he would have had no jurisdiction to make the order made by him (Harrison v. Wright (1845), 13 M. & W. 816. See also In re Durham County Building Society (1871), L. R. 7 Ch. 45; 41 L. J. Ch. 164). It often happens in practice, where the submission is originally in writing, that it is altered or added to by parol, and it then becomes a parol submission ( v. Mills (1811), 17 Ves. 419; Thames Iron Works, &c., Co. v. The Queen (1869), 10 B. & S. 33). There are various disadvantages attending parol submissions. They are open, like other verbal contracts, to dispute respecting the exact terms used, which often become material, and awards made on them cannot be enforced by attachment, since a parol submission could not formerly be made a rule of Court so as to give the Court jurisdiction (Ansell v. Evans (1796), 7 T. R. 1; v. Mills (1811), 17 Ves. 419), and cannot now be enforced under s. 12 of the Arbitration Act, because they are not submissions within the meaning of the Act. Moreover, a parol submission may be revoked at any time before the award is made (see ante, p. 46). A parol submission is sometimes ineffectual, even if it is not revoked, and an award is made. For example, if, on such a submission, a written award is made respecting land, and the provisions of the award are such that, if they had been verbally agreed to by the parties themselves, the contract would have been unenforceable by reason of the Statute of Frauds, the award cannot be enforced, since the parol submission and written award form but one parol contract (Walters v. Morgan (1792), 2 Cox, Ch. Cas. 369). An award on a parol submission of the question whether a tenant has a continuing interest in land, or is bound to quit at once, is within the Statute of Frauds (Rainforth v. Hamer (1855), 25 L. T. (O. S.) 247). A parol appointment of an arbitrator under the Public Health Act, 1875, is ineffectual (Gifford and Bury Town Council, In re (1888), 20 Q. B. D. 368; 57 L. J. Q. B. 181). Conflict of laws. Where a contract is made between parties resident in different countries, or is made in one country to be performed in another, the law by which the validity and effect of an arbitration clause in the contract are to be determined depends upon the intention of the parties as indicated by the terms of the contract as a whole and the surrounding circumstances. Illustrations. 1. A contract for sale of grain to be delivered in Scotland, made in England between a seller resident in Scotland and a buyer resident in England, contained a provision for arbitration by two members of the London Corn Exchange. The Scottish Court, in which the seller brought an action against the buyer for non-acceptance of the goods, held that the arbitration clause, not being good according to Scots law, afforded no defence to the action, but the House of Lords held that the intention of the parties, gathered from the whole contract, was that it should be governed by English law and, therefore, that the arbitration clause was good (Hamlyn & Co. v. Talisker Distillery Co., [1894] A. C. 202). 2. An English office issued a fire policy by its agents in Jersey to cover loss in damage to certain property in Jersey. The policy was in the English language and contained the usual conditions. One condition provided for the appointment of arbitrators, who were to appoint an umpire, and made the issuing of the award a condition precedent to any right of action for damages or loss. The submission was to be subject to the provisions of the Arbitration Act, 1889. The policy was executed in Jersey. Held that the intention of the parties was plain, and that the contract was an English contract, to be governed by English and not by Jersey law (Spurrier v. La Cloche, [1902] A. C. 446). SECTION 28. EXTENT OF ACT. 28. This Act shall not extend to Scotland or Ireland. SECTION 29. (Repealed, Statute Law Revision Act, 1908.) SECTION 30. SHORT TITLE. 30. This Act may be cited as the Arbitration Act, 1889. THE FIRST SCHEDULE. PROVISIONS TO BE IMPLIED IN SUBMISSIONS. (a) REFERENCE TO BE TO SINGLE ARBITRATOR. Mode of appointment. No stamp required on appointment, unless it is by deed. [Unless a contrary intention is expressed in the submission (s. 2)] (a) If no other mode of reference is provided, the reference shall be to a single arbitrator. This provision of the Schedule must be read in conjunction with s. 2. The words "if no other mode of reference is provided" have no application at all if the Schedule is excluded by a contrary intention expressed in the submission. If the Schedule is not excluded, then this clause merely provides that the reference shall be to a single arbitrator, if no other mode of reference is provided. Mode of appointment. As regards the appointment of an arbitrator, see commentary on s. 5 of the Act. The appointment ought to be in writing, for although the definition of submission in s. 27 includes an agreement in writing to submit differences to arbitration which does not name an arbitrator, yet it might be contended that the term "submission," for the purposes of s. 1, must be a submission in writing as understood before the Act. The language of s. 1: 'A submission . . . shall be irrevocable' is ambiguous; it is applicable, not to the agreement to refer but to the authority of the arbitrator" (per Bowen, LJ., In re Smith and Nelson (1890), 25 Q. B. D., at p. 547). The authority of the arbitrator, unless it is desired that it should be revocable by either party without leave of the Court, should therefore be in writing; and it is also desirable that it should be conferred in a way which is not open to dispute. As to the ambiguity of the word "submission," which has a different meaning in different sections of the Act, see ante, p. 313. No stamp required on appointment, unless it is by deed. The appointment of an arbitrator or of arbitrators or an umpire, if it is not by deed, requires no stamp (Routledge v. Thornton (1812), 4 Taunt. 704; Oliver v. Collings (1809), 11 East, 367). Where the appointment is by deed, a ten-shilling stamp is required (Stamp Act. 1891 (54 & 55 Vict. c. 39), First Schedule, tit. "Deed"). For forms of appointment, see Appendix of Forms. Appointment of two arbitrators. In cases where each party has to appoint an arbitrator it is equally important to see that both appointments are properly made, because a defect in the appointment of one arbitrator may invalidate the award, and, further, the disputes in respect of which each arbitrator is appointed must be the same and must be co-extensive. Any limitation of authority to one arbitrator may invalidate the award. Illustration. Two arbitrators, A. and B., not having chosen a third arbitrator in time, a third arbitrator, C., was appointed by a judge under the provisions of the Common Law Procedure Act, 1854, and A. and C. made their award, by which they awarded damages to the plaintiffs, who had appointed A. Upon a rule being obtained by the defendant to show cause why the verdict found for the plaintiffs should not be set aside and a non-suit entered, it appeared that the defendant had appointed his arbitrator, B., with a limited authority, and had so given notice to the plaintiffs, viz. that he had appointed him as to the construction of a lease, and not otherwise. The arbitrators, however, insisted on going into the consideration of damages after objection taken by the defendant. Held that the arbitrators in awarding damages had exceeded their authority, and the rule for a non-suit was made absolute (Davies v. Price (1864), 6 L. T. (N. S.) 713; 10 W. R. 865). FIRST SCHEDULE (b). APPOINTMENT OF UMPIRE. Previous legislation. "May appoint." Mode of appointment. |