Duty limited to assessing damages,

Effect of recitals.

Arbitration "in the usual manner."

All suits "between them two."

Submission by A. and B. of the one part and C. of the other.

All matters in difference between parties to suit against estate of testator.
All matters between the parties "or any of them."

Joint and several promise to perform award.

Matters accruing before and after date of submission.

Mesne profits.

Periodical assessment of damages.

2. A submission, unless a contrary intention is expressed therein, shall be deemed to include the provisions set forth in the First Schedule to this Act, so far as they are applicable to the reference under the submission.

1: Object and effect of the section.

This provision is entirely new and the object is to introduce into all submissions a recognised set of rules in place of the provisions usually inserted in submissions to arbitration before the Act. But the parties may exclude the provisions of the Schedule, if they so desire, by expressing a contrary intention in the submission.

The contrary intention should be expressed clearly where it is desired to exclude the provisions of the Schedule. If the provisions in the submission only differ in some respects from the provisions in the Schedule there will be two sets of provisions included in the submission, viz. those contained in the submission itself and those contained in the Schedule. In such a case the differences must be reconciled as far as possible and must be construed so as to give proper effect to the submission as a whole.

It was decided in Williams and Stepney, In re, [1891] 2 Q. B. 257, "that the Act added things which were not in the submission unless the intention that they should not be added was expressed" (per Mathew, J., Wilson & Son and Eastern Counties Navigation and Transport Co. Arbitration, [1892] 1 Q. B., at p. 84).

Illustration.

Arbitrators in an arbitration after the Arbitration Act, under a submission entered into before the Act, which was silent as to costs, awarded costs. Held that they had power to do so under the provisions of the Schedule (Williams and Stepney, supra).

2. Form of submission and stamp duty.

Agreement under hand.

No particular form of submission is necessary (Bac. Ab. Arb. B). It may be contained in a clause quite collateral to the main purpose

of an agreement. A bond conditioned "for A.'s due discharge of the duties of clerk," "to be ascertained by the inspection of A.'s accounts by J. S., and the amount so ascertained to be liquidated damages," was held to be a submission to the award of J. S. respecting the accounts (Jebb v. M'Kiernan (1829), 1 Moody & M. 340). (For forms of submission, see Appendix of Forms.)

Except where the subject-matter thereof is not of the value of £5 a submission which is not under seal requires in general an ordinary sixpenny agreement stamp under the Stamp Act, 1891 (54 & 55 Vict. c. 39). The duty may be denoted by an adhesive stamp, which is to be cancelled by the person by whom the agreement is first executed (s. 22), and it is not to be deemed duly stamped unless cancelled in accordance with the provisions of s. 8 of that Act.

One stamp only is necessary, although there are many parties to the submission having separate legal interests, provided they have a sufficient community of interest in the subject-matter of the reference; as in the case of a submission between the party who has insured a ship and the underwriters on the policy (Goodson v. Forbes (1815), 1 Marsh. 525; 6 Taunt. 171; Stephens v. Lowe (1832), 9 Bing. 32). Where there was a written agreement that a disputed boundary was to be set out by "an indifferent surveyor residing at a distance," and on the same sheet of paper was added a memorandum of a later date appointing a particular surveyor residing in the neighbourhood to set out the boundary, the two memoranda were held to be only one agreement and to require only one stamp (Taylor v. Parry (1840), 1 M. & G. 604).

An agreement indorsed on an arbitration deed or bond, enlarging the time or changing the arbitrator, is a new submission in writing, incorporating into itself all the terms of the original submission (Greig v. Talbot (1823), 2 B. & C. 179; Tunno and Bird, In re (1833), 5 B. & Ad. 488; 3 L. J. (N. S.) K. B. 5; Evans v. Thomson (1804), 5 East, 189), and requires an agreement stamp (Stephens v. Lowe (1832), 9 Bing. 32; 1 L. J. (N. S.) C. P. 150).

Submission by bond.

A submission may be by bond, which must be stamped with an appropriate bond stamp (54 & 55 Vict. c. 39, Sched.).

Each party usually executes a bond to the other in a certain penalty, subject to the condition of his abiding by and performing the award of the person named as arbitrator.

A submission by bond, referring to an arbitrator to settle the price per acre the purchaser is to pay for an estate, seems to be a sufficient agreement in writing respecting the sale of lands to satisfy the requirements of the Statute of Frauds (Cooth v. Jackson (1801), 6 Ves. 11).

Submission by deed.

A mode of referring formerly not infrequently adopted was by indenture, containing mutual covenants to stand to the award (Bac. Ab. Arb. B). Such a submission requires a ten-shilling deed stamp (54 & 55 Vict. c. 39, Sched.). A form of submission by deed is given in the Appendix of Forms.

Execution of submission where several parties.

Where the accession of several parties to the reference is the consideration for each to execute the submission, it is not effective as regards parties who have executed it until all have done so, even if it purports to refer all matters in difference between them or any two of them (Antram v. Chace (1812), 15 East, 209).

3. Contents of submission. Jurisdiction of Court
cannot be ousted.

The parties may insert any provisions they please in the submission provided that such provisions are not contrary to public policy and do not oust the jurisdiction of the Court. The parties cannot validly agree that no action shall be brought, but they may agree that no action shall be brought until an award has been made (Scott v. Avery (1856), 25 L. J. Ex. 308; 5 H. L. C. 811. See also cases cited in the commentary on s. 4, post).

In In re Reinhold and Hansloh (1896), 12 T. L. R. 422, Mathew, J., held that an agreement providing that neither party should apply to the Court to require the arbitrator to state for the opinion of the Court any question of law arising in the course of the reference, did not oust the jurisdiction of the Court, and directed a case to be stated.

In In re Montgomery Jones & Co. and Liebenthal & Co. (1898), 78 L. T. 406, there was an arbitration clause of which the following formed part. "Neither buyer, seller, trustee in bankruptcy, nor any other person as aforesaid, shall require, nor shall they apply to the Court to require, any arbitrator or the committee of appeal to state in the form of a special case for the opinion of the Court any question of law arising in the course of the reference, but such questions of law shall be determined by arbitration in manner herein directed, any provisions to the contrary in the Arbitration Act, 1889, notwithstanding." Smith, L.J., said at p. 408: "This clause does not purport to oust the jurisdiction of the Court, but only contains a term of the agreement to refer to the arbitration of a layman. It is not, however, necessary to decide this point and I do not propose to decide it. I will only say that I am not satisfied that this is a clause ousting the jurisdiction of the Court."

The clause which was the subject of the decision in Scott v. Avery provided that no action should be brought except on the award of the arbitrators. Lord Campbell said the public could not be injured by such a contract. . . . Public policy seemed to him to require that such a contract should be entered into. . . . The doctrine had its origin in the interests of the judges. There was no disguising the fact that, as formerly, the emoluments of the judges depended, mainly or almost entirely, upon fees, and as they had no fixed salary there was great competition to get as much as possible of litigation into Westminster Hall, and a great scramble in Westminster Hall for the division of the spoil. Lord Cranworth, L.C., said that parties might agree that no right of action should arise between them until J. S. had determined whether the contract had been fulfilled and what damages had been sustained by its breach, and if they did so agree no right of action would exist until J. S. had so decided (Scott v. Avery (1856), 25 L. J. Ex., at p. 313).

It would seem to be equally good law that parties should be entitled to make it part of their contract, not only that no action should be brought until an award is made, but that no legal proceedings of any kind should be taken until an award is made, or except upon the award of the arbitrator (see Gregg v. Fraser, [1906] 2 Ir. R. 545).

A party to a contract to refer disputes to arbitration has a perfect right to bring an action in respect of those disputes, and the Court has jurisdiction to try such disputes. Any provision to the contrary, except that an award may be made a condition precedent to an action being brought, would be an ouster of the jurisdiction of the Courts.

But the Court has a discretion under s. 4 of the Arbitration Act to say whether it will try such disputes or stay the proceedings, provided the other party comes in time and otherwise complies with the provisions of the section. "A person who agrees to arbitrate on any matter is not, unless the award of an arbitrator is made a condition precedent to the bringing of an action, debarred from pursuing his common law right to bring an action, subject to this, that upon proper steps being taken a direction might be obtained that the case, instead of being tried in an action, should go before the arbitrator. No order has been made in this case which excluded the defendant from his legal right to an action at common law, and there was, therefore, nothing to prevent the defendant from raising his defence and counterclaim or to deprive the learned judge of jurisdiction to try them" (per Lord Collins, M.R., in Robins v. Goddard, [1905] 1 K. B. 294, at p. 301).

It would seem that even in a case where it is provided in the contract that no action shall be brought until an award is made or

except upon the award of the arbitrator, a party still has a right to bring an action, and the jurisdiction of the Court is not ousted. The Court may stay the action either under section 4 of the Arbitration Act, or on the ground that it is frivolous and vexatious, but if the action proceeds such a provision will constitute a complete defence (see Harrowby v. Leicester Corporation (1915), 85 L. J. Ch. 150), unless the defendant is precluded from setting it up, e.g. by waiver or by reason of his collusion with the arbitrator (see Hickman v. Roberts, [1913] A. C. 229; Toronto Railway Co. v. National, &c., Insurance Co. (1914), 20 Com. Cas. 1; Jureidini v. National, &c., Insurance Co., [1915] A. C. 499).

Fletcher-Moulton, L.J., describes the present state of the law on this subject as follows:-"The present position, therefore, of agreements to refer to private tribunals may be shortly expressed thus. The law will not enforce the specific performance of such agreements, but, if duly appealed to, it has the power in its discretion to refuse to a party the alternative of having the dispute settled by a Court of law, and thus to leave him in the position of having no other remedy than to proceed by arbitration. If the Court has refused to stay an action, or if the defendant has abstained from asking it to do so, the Court has. seisin of the dispute, and it is by its decision, and by its decision alone, that the rights of the parties are settled. It follows, therefore, that in the latter case the private tribunal, if it has ever come into existence, is functus officio, unless the parties agree de novo that the dispute shall be tried by arbitration, as in the case where they agree that the action itself shall be referred. There cannot be two tribunals each with the jurisdiction to insist on deciding the rights of the parties and to compel them to accept its decision. To my mind this is clearly involved in the proposition that the Courts will not allow their jurisdiction to be ousted. Their jurisdiction is to hear and decide the matters of the action, and for a private tribunal to take that decision out of their hands and decide the question itself is a clear ouster of jurisdiction" (Doleman & Sons v. Ossett Corporation, [1912] 3 K. B., at p. 269).

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It may be added in this connection that disputes which are by the contract within the jurisdiction of the arbitrator are within the jurisdiction of the Court, and the Court has seisin and power to decide them as the arbitrator could have decided them if they had been referred to him under the arbitration clause in the agreement. When we come to the arbitration clause the matter is free from doubt. The arbitrator is to have the power (with certain exceptions. not including the certificates in question) to open up, review, and revise, among other things, any certificate, and to treat the matter before him as if no certificate had been given. These certificates, therefore, were not intended to be absolutely binding and conclusive.