clr/1966/1966_1_87.pdf

(2)and the Coints of Justice Law, I960 {Low of the Republic No. 14 of I960) section 37. (his is an appeal by the plaintiff from the order of the District Court of Limassol setting aside the award of an aibitralor on ihc ground of misconduct. T h e application in which the said order was made was based on section 20

(2)of the Arbitration Law, Cap. 4 and section 37 of the Courts of Justice Law. l % 0 (Law of the Republic N o . 14 of 1960). The appellant w h o ts a building contractor, was the plain­ tiff in an action, instituted in the District Court of Limassol, whereby he was claiming the sum of £691.221 mils as balance due to him under a building Contract by Ihe respondents who arc husband and wife. After the filing of the action and the statement of claim, the Court by consent stayed the 'proceed­ ings under section 8 of C a p .4 (supra) and referred the action 87 t c 1 5 6 5 ί ο the L e o n i r a c l o i and j ^ 24 a i b i i i a l i o n ol Ν ίΐ , a < ι \ l VMS \ building ai b n r u i o i should not be b o u n d b\ any previous h i d i n g ol respondents' a i c h i l e u Τ lie p l a m l i l f s claim l« ι I II \|( Μ ΛΜΙΙΙΙ U M I cngincei .md d u e l l e d ili.it ihe LCI hi κ tic ol t l u sn|KiM-um that sum NL 1691 ""21 mils was based on 'he I m a l iiilukii MIL said IS I Out ol Ihe . i s p o n d - n i s disputed onl\ Ihe Mini ol 1>ΐ| |s| SOIKIINIOS mils l o r which they c o u n t u c l a i m c d in due eouisi SAWIIMS N o \ c m b c i . 1961, tin. l ( i h i l i a t o r hied his a w a i d ν h c i t b * he sum ol U> 7 0 It Λ Ν " awauled to the pl.uiUill appellant the O n the 4 l h appeals that the a i b i t i n o i l o n s u l l e d the supem-an- a'chitecl MIL said Ν I in II K .ihscMC ol ihe paities I h e lespoiideitls, d i s a i i . i i e d w i t h this a w a i d tiled on the 1Sih N o v e n i b c i , 1961, .in application to Ilie D.sii κ I C o m I, of Limassol undei seclmn 20

(2)C a p 4 d\ui section 37 o f ihe C o u r t s <>l luslicc I a n l he a w . m l on the !9f.O (supra) l o r an ordci to set aside g i o u n d that Ihe a r b i t r a lion pioccedmgs w c i e misconducted and nregulai 1he li I*II ( o u i l , κ Ί ) ΐ η μ on Ihe stalcmenl ol the a r b i i t a i o r in Ins a w a i d thai he l o n s e h e d the supei vising a i e h t c i l ΝL and o n the sialcnK-m in his a l f i d a v i t that he tailed II K said aichiiect who ga\c him del uls ol ihe woi k done In (lit plaml i l l undci c o n t r a i l anil ol Ihe ex11ι w o i k found ιhat lie did so ui llu absence ol the icspondenls The trial C o u r t held tins a m o u n t e d to misconduci o n the part ol the a r b i l r a l o i and. o n the a u t h o r i t y ol //«, w ι ν Shelton {1844) Π Ι Γ Ι {NS) 466 sel aside the a w a i d Section 20

(2)ol the A r b i t r a t i o n l a w . Cap 20 ( I ) {2} W here .\\\ a r b i l r a t o i oi 4 provides tmipne has misconducted hmisell ο ι the proceedings, οι Λ\\ a r b i t i a t i o n ο ι award has been i m p r o p e i l ) p r o u u e d ihe Court may set the a w a i d aside O n the appeal by the p l a i n l i l l - c o n t i a c l o r against that ordci setting .INK1L the said a w a i d , the Supreme C o m t is //(/</ ( I ) (

1. a)wc accept the principle lhal wheie a poison appointed as knowledge and a r b u t a t c i in view experience in Ihe h a d e ol his as' in this case -it is not necessarj l o r h i m to examine witnesses on certain malleis as he knows s u t f l u e n t l y ol the mining subject to decide proper!ν w i i h o u l exa­ litem (
2. b)l i u l . although Λ\\ expeit a r b i t r a t o r w h o has been a p p o i n t e d because o f Ins knowledge and experience ol the 88 trade may make use of his own knowledge and experience on many matters,' such as quality, without having witnesses called before him, he is. never!hcless, prohibited from violating ihe rules of natural justice, lhat is, hearing interested parlies, persons or witnesses, in the absence of the other.

(2)In the Eads' case (infra), concerning ihe valuation of a lease, one of the arbitrators relied oh inftrrmation which he received from his grandson who went down the mine : and the Court held lhat it was nol incumbent on thearbitrator to go down himselfand that it was not fatal lhat he relied on the report of his grandson. But in the arbitration with which we are concerned in this appeal, the arbitrator did not obtain information from an outsider regarding the state of property or something similar. He consulted the very person (the supervising architect) whose decision as to the amount of work done by the contractor was challenged by the respondents, and he did so in their absence. Principles laid down in the Mediterranean and Eastern Export Co. Ltd. v. Fortress Fabrics (Manchester) Ltd [1948] 2 All L.R. 186, at p. 189 per Lord Goddard. C.J. and in the London Export Corporation. Ltd. v. Coffee Roasting Co.Ltd |I958] 2 All F..R. 411. al p. 416, per Jenkins L.J., applied.

(3)Applying those general principles to the present case, we are of the view lhat the trial Court came to a right conclusion. that is. lhat the conduct of the arbitrator in consulting the supervising architect, otherwise than in the presence of the parlies amounted to misconduct within the provision of ihe law.

(4)(

1. a)The question now arises should the award be set aside wholly or in part? It is a well-established principle that where there arc two matters in an award which are entirely severable then ihe whole award need not be set aside but only lhat part which is bad. Ibis principle was applied not long ago in the case of Prestige and Co. Ltd: v. Brettcll [1938] 4 All L.R. 346. al p. 352. (
2. b)In this case the appellant's claim was for £691.221 mils balance due of building contract and extra work done. Out of that sum the respondents only disputed the sum of £331.151 mils, for which they have set up a counterclaim as it appears in the statement delivered to the arbitrator. So. even if the arbitrator had accepted the respondents' counterclaim of 89 1965 Oct. 20 1966 Feb. 24 OlARALAMBOS GALAMS V. SOFRONIOS SAVVIDES AND ANOFHER 19611 Oct 20 19»6 leb ?4 C ΜΛΚΛΙ AMIIOS C!AI 1331 )S| in full the ippil'anl would siill be entitled to judg­ ment lor ihe difleienci οι fUH 849 mils whkh we eonsidci is severable

(5)In Ihe icsull MIS I SOFRONIOS (

1. a)theaward in rcspicl ol1331 151 (the respondents counleiclaim) is set aside and the mattci will have to be heardde no\o SAwrors ΛΝΓ» ANOIJIIR (
2. b)Judgment is entered lor the appellant (plaintiff) in ihe sum of 1338 849 as above plus interest thereon at the rate of 4 % per annum Iroi t the date of the awaid κ the 4th Novembei. 1961 \ppial allowed in pait Judgment in terms The respondtnts to pay to the appellant half his <o\t\ here and in the Coutt below Caws tefeired flanev to ι Shelton

(1844)H I I Lq ( N S ) 466 \le<hteiianeun and fasti in I sport Co Itil s fortress fabrus (Mamheshr) ι id (1948] 2 AM TR 186 fads ι Wdhains

(1854)21 I J Ch *»3|, now leporlcd in [1843-18(0] All I R Rep 917 , Diew ι Ditw

(1855)2 Maiq I at ρ 3. per Lord Cranworth, LC Wright ι flowson

(1888)4 1 L R 386 , Jotdeson and Co ι Stout et 201, at ρ 204 Akttebolag

(1931)41 II L Rep London I \port Coipouitwi Itd \ Jubilee Coffee Roasting Co ltd |I958] 2 All I K 411 , Piestige and Co ι fireih II |19\H] 4 All Γ R 346 d i ρ 352. Appeal. Appeal against the (udgn.enl of the District Court of Limassol (Loi/ou I* l> C and Malachtos D J ) dated the 10th August, 1965, (Action No 1132/61) setting aside the award of the arbitialoi on the piousid of misconduct Sir Panavtotts C iHo\ntnnt\, for the appellant X CU'tides with Λ G Mil· tdt\ for the respondents Cur >0 (w/v ι tilt ZLKIA, P. : The judgment of the Court will be delivered by Mr. Justice Josephides. JosHPiuDiis, J. : This is an appeal by the plaintiff • from the order of the District Court of Limassol setting aside the award of an arbitrator on the ground of misconduct. The application in which the order was made was based on section 20

(2)of the Arbitration Law, Cap. 4, and section 37 of the Courts of Justice Law, 1960 The appellant, who is a building contractor, was the plain­ tiff in an action claiming the sum of £691.221 mils as balance due to him under a building contract by the respondents who are husband and wife. After the filing of the action and the statement of claim (on a specially indorsed writ) and before the defence was filed, the respondents (defendants) applied to the Court under the provisions of section 8 of the Arbitra­ tion Law for an order staying the proceedings on the ground that there was provision in the building contract for the-re­ ference to arbitration of the matters in dispute in the action. There being no opposition on the part of the appellant (plaintiff), the Court by consent stayed the proceedings, re­ ferred the action to the arbitration of Mr. Nicolas E. Roussos of Limassol, and directed that he should not be bound by any previous finding of respondents* architect. The. said Roussos, who was a civil engineer and building contractor, was the person agreed upon by the parties to be their arbi­ trator. The plaintiff's claim of £691.2';1 mils was for the ba­ lance of a sum due under a building :ontract, including extra work, on the strength of the final certificate of the supervi­ sing architect) Mr. Nicos Lagoudis. On the 4th November, 1961, the arbitrator filed his award whereby he awarded the sum of £670 to the appellant (plain­ tiff). The material part of the award reads as follows : " After consulting the Architect Mr. N. Lagoudis and meeting the plaintiff and defendants on three, occasions examining their differences in every detail, I come to the following conclusion : Value of Contract Additional work '. Total value· of contract Deduction for work not carried out Payments on account Amount due to the Contractor 91 £6,900.000 mils 1,735.000 mils £8,635.000 mils 370.000 mils £8,265.000 mils £7,595.000 mils £ 670.000 mils" \96b Oet. 20 1966 Feb. 24 CHARALAMBOS GALATIS Γ. SOFRONIOS SAVVIDFS AND ANOTHER ,, ί, ' '-> l ,' " u b 24 On the ISth November, 1961, the respondents (defendants) filed then application foi AW oidci of the D i s l n u Court to sCl a s , ^ c , n c «tward on the ground that the a i b i i i a l i o n pro­ ceedings were misconducted and irregular ( Η "l,V AMIK'S ί,λ1 slls 1 St t!(tl'NIOS SA\ΝIDIS \M> A^OIHIH I h e giounds on which the application was based were set out in the affidavit swoi;i b\ the first respondent (defendant), the maicnal part of whu h reads as follows " 3 The proceedings weie irregular and misconducted inasmuch as evidence was taken by the atbitrator from a witness, not called by me, and m my absence, and it was upon the evidence o\~thai witness that the arbitra­ tor made his awaid I w i s given no opportunity of crossexamining that witniss The witness in question was the architect, Ν Lagoudis, who was an mleiested party and whose veiy findings uave ιise to these a r b i t i a l i o n pro­ ceedings 4 Ihe a i b i l i a l o i tailed to conduct the pioceedmgs in a indicia! mannei He did not allow me to give my evidence t o i i e u l y , but only asked me a number of que­ stions I was not subjected to cioss-examination but the otliei paMy was invited to comment upon mv evidence Ihe l i u t l i o f mv evidence and of ihe othei parts was therefore untested 5 I he ιules ol e\ idence weie not obsei \ed 6 I ο ihe best o f mv knowledge, uo note ol the evi­ dence such as it was, was iccorded at the time K n l h e r , piesenl al Ihe imlv meeting (thcic was onl\ one, not I hi co as slated by the . n b i t i a t o r in his a w . r d ) was the a i b i l i a l o i ' s clerk win) intenupted llie pioiredings by ameeing wHh the ι οηιηκ nls passed by Ilie .ii bitiator, when so lequesled / I he a r l n i i a l o i ιelused to visit the ronsii net ion in i|itestiMn but staled he wuuld visit and inspect only the watei installations I lus to the best of tin knowledge he nevei d i d 8 I'ail ol the n . ' i u i in dispute was tnc question ol compel sation payable tot delav in finishing Ihe work I lie a i h i t i a l o i did n i l t e a l with this question at all ; ' Not only did the a i b i l r a l o i see the .liehilect be­ hind ni\ h.nk, he st.aet1 to me on Sth July and on other '<2 dales thai he tiad also seen the other parly about the ease. I do not know what look place at ihis meeting or meetings.

1. On the 7th November, 1961, after being notified that ihe award had been filed in Court, I called on the arbitrator for the return of the various documents I had left with him for .the case. Ί ο the best of my knowledge and memory he said to me the following words or words having a similar meaning : ' I believed what you said to me but 1 could not act upon that because 1 had to base my r e p o r t ' o n whal the architect said'.
2. further, no evidence on oath was given al any time. 1 do not know what documents were produced to the arbitrator for or dining ihe proceedings or in my absence or whal report was given by the architect to the arbitrator ; I was not asked whal witnesses 1 had or wanted to call and 1 was also, therefore, unable to pre­ sent my ease as fully as it merited ". The appellant (plaintiff) opposed the application and applied lhat judgment be entered in the terms of the award. The appellant's opposition was supported by an affidavit sworn on the 6th December, 1961, by the arbitrator (Rous­ sos) who died on the 23rd March, 1963, without giving evi­ dence in these proceedings. In view of his death we think lhat Ihe whole of his affidavit should be q loled in this judgment : I. I am a qualified Civil I.ngineer with a long ex­ perience as a Civil Lngineer and as a building contract­ or in ('vprus.
3. On the 1.7.196! on the application and al the re­ quest of both litigants, I was appointed by virtue of an order o\~ ihe District' Court of Limassol under Ihe pro­ visions of the terms of the building contract dated .'i.9.59 between the litigants, to go into and determine the dis­ pute in the building contract which arose between the plaintiff and the defendants according to the provisions of article 14 of the said contract.
4. I repeatedly summoned both the litigants who appeared before me and they gave a detailed statement lo me regarding their dispute and the claim of each one of them against each other of them, each one of the liti­ gants having handed to me in writing his relative claim and dispute. 9.1 lCj<3 '-' iL/ F e b 24 CHARALAMBUS GALATIS , ·'SlH'KONIOS Swvmr.s AMD ' ΛΝΟΓΜΙΗΪ:^ - ! -^ •·;*--" :,-'"; lV6 r> ,!,' , · , ^ 2Ί -,tA'AM,w,:s,! '• " "NI''s t XNI) ANUIHFK I also summoned the supervising architect M r . N. Lagoudis referred to in the contract who gave me particulars o f the work executed by the building contractorp l a i n t i f f under ihe ;aid contract and of the extra work executed by plaintiff. I visited the premises and I examined the plans, the specifications and conditions o f the said contract and I determined the dispute and claims referred to me under ,n c provisions of the said contract and I gave my award which I filed in Court
5. I also went inlo defendants' claim for damages due to the dela\ in the completion o f the work and 1 found that defendants were not entitled to such damages because plaintiff on the instructions o f the defendants executed extra work in connection with the said premi­ ses, o f a value o f £1735 and the execution thereof re­ quired additional considerable time which was not spe­ cified in the contract nor was there any agreement specifying the time <>f execution of such eMra work.
6. A l l the facts alleged in the affidavit o f ihe defen­ dant which contradict or are inconsistent with this affi­ davit are not accepted ". If is c o m m o n ground that the respondents delivered lo the arbitrator on the 7th August, 1961, a statement giving l u l l particulars o f their claims against the appc'lanl. This statemenl was put in evidence as I'.xhibit 1 before the trial Court and it shows thai ihe respondents claim of £ 3 3 i . l 5 1 mils is composed of items o f work omitted to be performed 'by the conlraclor (appellant) and o f a claim for damages for delay. This figure is made up of 22 items as follows : (a) hem 21--damage* for lour months" delay in completing the work as originally agreed, at H 5 per month £180.000 mils (b) Items I i<> 20 and item 22-v'arious items wf work no! performed or material not supplied In ihe contractor Πι;< i. 15I mils lolal Π 3 Μ 5 1 mils li v.ill Ihus he seen thai out of the sum o f £691.22!. claimed by ihe ; : pprN:inl in hi-, st ικ-ηιοηΐ of claim as balance, of the build!!!:· CMilracl and .··•.!'.: work the respondents' only dis­ puted the sum ··:' f.T-t I S unls *.M Only the two respondents gave evidence before the trial Court and no witnesses were called by the appellant as the arbitrator, who was about to be called after the adjournment of the case, was taken seriously ill andhenever recovered. The main witness was the first respondent (the husband) and he-, more or less repeated the contents of his affidavit amplifying it in certain respects. As regards his conversation with the arbitrator he stated lhat on the 7th November, 1961, that is, after the filing of the award, he called at the arbitrator's office in order to collect certain documents and that the arbitrator told him that he (the arbitrator) fully agreed with what he (the first respondent) had stated to him but that he could not act upon it as he based himself on Mr. Lagoudis's (the supervising architect's) report. Subsequently, the arbitrator informed the first respondent-that he did not have any written statement from Mr. Lagoudis. The only complaint of the respondents against the arbitrator was that he misconducted the proceedings and they did not impute to him any dishonesty or bad faith. The trial Court found that the arbitrator had been appointed in view of his expert knowledge of the matters in dispute and that consequently he was entitled to make use of his expert knowledge for the purpose of supplying any deficiency in the- material placed before him. They were further of the view that the'fact lhat no expert witnesses were called by either side was another indication in support of that proposition. Although the respondents before us disputed the fact that the arbitrator was appointed in view of his expert knowledge we arc satisfied that lhat is not so. The trial Court, relying on ihe statement of the arbitrator in his award that he consulted the supervising architect, Lagoudis, and on the statement in his affidavit (paragraph 3) that he called the said architect who gave him details of the work done by the plaintiff under Ihe contract and of the extra work, found that he did so in the absence of the respondents. The Court held that this amounted to misconduct on the part of the arbitrator and, on the authority of Harvey v. She/ton

(1844)13 L.J. Cq. (N.S.) 466, set aside the award. The appeal was very ably argued before us on one ground, namely, that the trial Court misdirected itself as to the law and the legal principles applicable in the case, having regard to the facts found by the Court. Sir Panayioti Cacoyanni argued that, as the Court was concerned with the case of an 95 1965 Oct. 20 1966 Feb. 24 CHARAI.AMBOS GALATIS V. SOFKONIOS SAWIPFS . AND ANOIHHK 1965 *"'' Feb "M Cll.\RAI.AUHI>>. C At.AT IS I'. SontoNios SAW.MIS ittiD ANOTHER arbitrator skilled in the trade, appointed in view of his expert knowledge, the arbitration should be distinguished from t n a t con d u c t e d by an ordinary arbitrator. He further submit­ ted that a skilled arbitrator was entitled to consult persons who could give valuable information. In support of his sub­ mission counsel cited the case of Mediterranean and Eastern Export Co., Ltd. v. Forires.'; Fabrics {Manchester) Ltd. [1948] 2 All E.R. 186 ; Russell on Arbitration, 17th edition, at page 143 ; and he relict! mainly on the case of Eads v. Williams

(1854)24 L:J. Ch. 531, now reported in-[1843-60] All l-.R. Rep. 917. On the other hand, respondents' counsel submitted lhat the arbitrator based himself on information received from Lagoudis who was the man whose decision was not accepted and, in fact, was challenged by the respondents. He was the supervising architect o\\ whose final certificate the appellant based his claim of £691 which respondents denied, and the mailer had to be taken to Court and eventually referred to arbi­ tration. Respondents'complaini was that Lagoudis was consulted by the arbitrator in the absence of the respondents. Counsel finally submitted lhat the arbitrator did not consult an inde­ pendent person to obtain some information to help him in assessing the value of some work or material bul lie consulted a person who was highly involved in the ease. The first principle in arbitiation is that the arbitrator must act fairly to both parlies, and thai he must observe in this the ordinary well-understood rules for the administration of justice. The arbitrator η ust not hear one parly or his witnesses in the absence of ιhe other party or his represen­ tative except in few cases, where exceptions arc unavoidable, both sides must be heard and each in the presence of the oilier: see /fancy v. She/ton

(1844), supra, to which we shall revert laur. The principles of universal justice require that the person who is to be prejudiced by Ihe evidence ought to be present to hear ii taken, to suggest cross-examination or himself to cross-examine, and to be able to find evidence, if he can, thai shall meet and answer it ; in short, to deal with il as in the ordinary course of legal proceedings : Drew v. Dicw (1851;') 2 Mncq. 1, at page 3, per Lord Cranworlh, L.C. There would seem io be an established practice for the umpire in eommeieiat " q u a l i t y arbitralions" to depart from this rule : An arbitrator experienced in cloth was held justified in deciding a dispute as to quality upon inspection of samples only {Wright v. Hanson (I8KW 4 T.L.R. 386). Similarly an 96 196Γι umpne expert in the limbei hade p i o p e i l ) decided a dispute as to quality on his own inspection {Joideson & Co ν ^tma iktiebalag

(1931)41 LI I Rep 201, at page 204) etc R b In Lads ν Williains

(1854), siipia, intci alia, one o| the two icleices had not inspected the mine htmsell, but had ic lied on the i c p o r l o f another the refciees examined mine . . ι ι .ι ι ι Λ ι I am not prepaied to sav whethet it would be a ν did objection merclv. that M i I lames (one ol the n b i t i a lois) did not go down th» mine himself, but letl it to his mandson , because, when vou aie t o t m i n g a (udgnient is to th. value o f anvlhine vou necessanlv piocecd in a gieal nieasuie on the icpoit ^f otheis II a peison is to value -\n estate, nobodv intends thai he shall examine eveiv iood of land He lak-s ,i cuisoiv view, examines it lieie <ηκ\ theie, he knowing ihe land and the neigh boiuhoood, he asks some questions, and is in SOMK le pcets gti'ded by them I h n e l o i c I do not think thai it was incumbent on M r Haines to go down himself , and I όο not think that it is fatal lhat lie lehed on the i c p o r l ol his giandson ' It will be seen that the / ails case concerned the valuation o f a lease, and that one ol the arbitrators relied on infoima­ lion wh:eh he received f r o m his giandson who went down the mine; and the Court held th it it was not incumbenl on the arbiliatot to go down hinisi.ll and that it was not fatal that he ιdied on the report ol his giandson R u t i n the arbi­ tration wilh which we aie comeined in this appeal, the arbi­ trator d i d not obtain i n f o i m a l i o n f i o m an outsider re e n d i n g 24 tIKRMAMHOS (>ΜΑΜ» '' . ol the witnesses who were available , they did not form their own judgment, but iclied on the opinion o f the umpue l l was held thai it was not incumbent on the referees eilhci to inspect the mine themselves οι to examine the witnesses but it was, however, a valid objection lhat one o f the icieiees accepted the view ol the umpuc without lormt.ig an opinion ol Ins own I his case was siionelv relied upon bv appellants counsel and loi this icason we shall considei it in some detail It is convenient heie to state lhat we accept the piinciple thai whcic a person is appointed as a i b i t i a t o r in view of his know lidge and expeiiencc in the hade it is not ncccssarv tot him to examine witnesses as he knows sufhuenllv ol the suhject to decide piopctly without examining them In the coi.ise ol his ludgmenl I o i d Cianvvoilh 1 (_ said (at page 9?0 ol the A l l Γ' R Rcpnnl) 97 (Xi jn 1966 SontOMMS c .,...,. c AM( \\ΟΓΗΟ· 196 ^ ίο p e[ . 24 the state o f properly or something similar. He consulted the very person (the supervising architect) whose, decision as to l n c 'iniount of work done by the contractor was challenged by the respondents, and lie did this in their absence. < 'llAKAI.AMW >S (tAI.AI'IS l-urther on in his judgment L o r d C r a n w o r l h , L.C., says I'. Snm'.'!M,is SAwntrs AM) ΛΜ.ΙΊΙΙΚ ί ;ιί PaSc y 2 i ) o l t n c s a n u ' Rl'llo''0 : " The result of Ihe evidence is that M r . Haines, the referee, was guided either entirely or mainly by ihe re­ port o f his grandson, coupled with his own fifty years knowledge o f ihe neighbourhood, which o f itself, I think, was quite a legitimate ground to entitle him to sign an award, lint w h a l the other referee says is not that he consulted M r . Peacock (the umpire) but was satisfied w i t h his decision on it as being w o r t h £400 an acre. M r . Peacock had valued it at £400 and though M r . Haines did not think it w o r t h £200, he concurred with the other because he thought it no use differing. T h a i is not an award to which the persons who had agreed to make the reference were bound. They were entitled to have the unbiased judgment o f the two ; or, if the two could not concur, then the unbiased judgment o f the third, acting, not in a loose way, but giving an opinion deciding judicially on lhat which il had become his duly to decide; I think thai was an objection to the award ". Il will be observed that great stress is laid on the necessity o f f o r m i n g ones own unbiased iudginent and not relying on the opinion of others. Another ease It> the |>uini is the Mediterranean and Eastern Export (Ό. Ltd. v. Fortress Fabrics {Manchester) Ltd., [1948] 2 A l l L.R. 186. In that case the buyers of textile goods refused to accept them on the ground that they were not up to sample, but were unmerchantable and unfit for Ihe purpo­ se for which they were supplied. The dispute was referred to arbitration in accordance with the rules of a chamber o f commerce which provided for the determination o f such disputes "by commercial men o f experience and special know­ ledge o f the subject-mailer ". The parties submitted state­ ments to the arbitrator in accordance with the rules but nei­ ther o f them called expert evidence or had professional repre­ sentation at the hearimz. 9S Lord Goddard, C.J. applying the principles laid down in earlier cases {Wright v. Howson

(1888)4 T.L.R. 386, 387 ; Eads v. Williams

(1854), supra; and Jordeson & Co. v. Stora etc. Aktiebolag

(1931)41 Lloyds L.R. 201, 203), intet aha, held that the arbitrator, having been appointed because of his knowledge and experience of the trade, was entitled to fix the damages without hearing expert evidence thereon. The following extract from Lord Goddard's judgment in ihe .Mediterranean etc. case is significant (at page 189) : iyw Oct. 20 1966 Feb. 24 O U K A I ΛMHOS CJVLAIIS I*. SoFROMOS S A W im s ASD ΛΝΟΙΗΗΙ It must be taken, I think, that in fixing the amount lhat he has, he has acted on his own knowledge and experience The day has long gone by when the Courts looked with jealousy on the jurisdiction of arbitrators. The modern tendency is, in my opinion, more especially in commercial arbitralions, lo endeavour to uphold awards of the skilled persons that the parties themselves have selected to decide the questions at issue between them. If an arbitrator has acted within the terms of his submission and has not violated any iules of what is so often called natural justice, the Courts should be -dow indeed to sel aside his award " . It will he observed lhat one of the fundamental principles laid down bv Ioid Goddard is the observance of the iules of natural justice, that is to say, that a skilled arbilraloi must not hear one party or his witnesses in the absence of the othei party or his representative and thai each party must be given an opportunity of piesenting his case. In the London Export Corporation, Ltd. v. Jubilee Cojfee Roasting Co. Ltd. (1958] 2 All K.R. 411, a dispute aiose out of a contract for the sale of ground nuts which was referred to arbitration under an arbttiation clause in the contract and, the arbitrators being unable lo agree, to an umpire. An appeal from the umpire's awaid was taken to- the board of appeal constituted in accordance with the regulations of the Incorporated Oil Seed Association. The nature of the miscon­ duct of the arbitrator complained of by the buyers was the following : It appears lhat for a matter of fifty years on any appeal to" the board of appeal it had been the practice for the , parties or those representing them to withdraw at the end of the hearing but. for the umpire lo remain with the board if they requested him to do so. Il was stated lhat the object of thai arrangement was to enable the umpire to tell the board whether the contentions raised before the board were 99 11,65 \\'. Teh 24 ( ΗΛΚΛΙ AMIIOS CiM A I I S I NoutuMos SAWIOIS AND the same as those raised before him, and also to tell the board what were the reasons for his decision. In this particular case t m i t P r a c 1 ' ^ w a s followed ;>nd a director of the buyers, who represented them in this matter, unsuccessfully protested. It was staled that the conduct of the board in conferring with Ihe umpire, otherwise than in the presence of the parties, was, in the technical sense, " misconduct ", and sufficed to invalidate the award. That contention was accepted by the trial Judge and upheld by ihe Ci art of Appeal. \ S O I HI I'. Jenkins L J in his judgment (at page 416) said " As lo the law one can starl with the principle that in the absence of soην; agreement between the parties lo a submission such as this, either express or implied, conduct such as the appeal board's conduct in the pre­ sent case in giving p i o a t e audience to the umpire and conferring with him in ihe absence of the pailies, would undoubtedly, have amounted lo misconduct and would have sufficed to invalidate the award. I think that that has nevei been disputed " In the arbitiahon agieemenl it was provided thai the umpire and any pelvm c!o:ely connected with him in busi­ ness was not lo be a membei of the appeal board or have any voice in its selection Diplock, J , who heard the case in the first instance, said in this connection ([1958] I All L.R., at page 501) · I think that it is a necessary implication from this that the umpire is to h a ' c no influence, direct or indirect, on the board ol appeal in reaching its decision, and that the board of appeal l u r e no right to seek any informa­ tion, whether of fact or of opinion, from him in the absence of ihe parlies or to allow him lo attend their deliberations, after the conclusion of the h c a i i n g " Ihe principle laid down in the London Export Corporation case is lhat the aibilialoi should not be influenced directly or indueclly in reaching hi' decision by any person in the absence of the parties, and lhat the arbitrator has no right to seek any information, whether of fact or of opinion, from another person in the absence of the parties, or lo allow him lo attend his deliberation.·, after the conclusion of the hearing. The tual Court in the present case in icaching iis decision relied on ihe ease of Harvn **.Shelfon

(1844)13 L.J Fq. (N.S.) 100 466, but learned counsel for the appellant submitted that that case was distinguishable from the present one on the ground that the arbitrator in the Harvey case was not a person of skill and experience, that he consulted one interested part\ without giving the opportunity to the other to explain and, as aresult, he awarded substantial amounts tothe party whom he consulted. With great respect wc think that the Harvey case went much further than that and that it laid down certain definite principles. The headnote reads as follows : 1965 Oct 20 1966 Feb. 24 THARAHMBOS G AI.A1IS

1. SOFROMOS SAWIDFS AND \NOTHFR " A submission to arbitration was entered into b\ A. and B. of all matters in difference between them. The arbitrator gave due notice to the parties of his intention to hold a meeting on the 26th of September, which was holden, and attended by one of the parties, and the solicitor of the other party. The parties met on the following day before the arbitrator, who, after hearing both parties, and with their consent, took with him all the books, & c for theexamination ofan accountant. Shoitly aftcrwaids, and before making his award, the aibitrator was apprised by the accountant of a supposed error in the accounts, as to a sum of money, upon which the arbitiator summoned A, who was more conveisant with the accounts than B, to appear before him and the accountant, when the supposed error was explained and set right to the arbitrator's satisfaction. About a month afterwards, the accountant again discovered in the accounts what he supposed an error, as to a sum of money, which was explained by A. in like manner as before, to the satisfaction of the arbitrator ; but in both instances no notice was given to the other party, B. of A's intended attendance on the arbitrator. The arbitrator shortly afterwards made his award :—the award was ordered lo be set aside". It was also held that ihe same course of proceeding ought to take place in mercantile as in other references to arbitration ; and that private communications ought on no account be made to an arbitrator by a party previously to the making^/ '" of his award. The following is the material part from the judgment of the Master of the Rolls in the Ifarvev case (at page 469). It should be stated that Norris, whose name is mentioned in the judgment, was an accountant who had been entrusted by the arbitrator with the examination of the books of the parties with their approval : 101 1965 ι' F c b ' 24 ( I I A I t A I AMItOs d \ l MIS S(,(KOMMS swvinis VNO A M I I III Κ ' Norris had a difficulty about an item in the accounts o f £350 This cucumstance having been stated to the a r b i l i a t o r by N o i n s , the arbitrator summoned Shelton to attend him, foi the purpose o f explaining the apparent eriot , and it is lo be tegretled lhat ihe arbitrator did not al the same time summon Harvey lo attend him with Shelton Shelton having attended the arbitrator, the mailer is satisfactorily explained It does not appear how the result piejudic;s Harvey, but we have the arbtt i a l o i seeking and obtaining a private interview with one of the parlies materially interested in the subjectmatter ol the a w a i d , AInch is always most objection­ able The like pioccidnms take place with icfercnce to another sum, as to w h u h differences might have existed, and Shcllon is again summoned by the arbitrator to attend him Shelton has a private interview with the n i b i h a l o r , and explanations aie given by Shelton, and the arbitratoi is salislied ihciewith, and Haivey becomes bound thereby I his course o f proceeding was very i m p i o p e i , loi no one ought lo use means likely to aflcct the mind ol a person acting in a judicial chaiacter , and it is absurd to say a dilferent course ol proceeding is allowed in m u c a n h l e icferences to that which is pur­ sued in other icferences and I tcpudiate an> such no­ tion One poi Iv, in eases ol this naluic, cannot be allowed 10 use the means ol influence not known to his opponent 11 is aigued lhat the two parlies aie m equal fault, and it is reported that L o i d U d o n said, if a fact o f this kind be btoughl f o i w a i d , Ihe guilty party cannot be heard to make the complaint , and in the present case the acts o f Shcllon weie not spontaneous ones on his pait Whal Harvey states is mainlv denied by the o l h i ι side His statement is, th.tt hi wa» desirous theic should be a meet ing at which all p.ulies > ould attend the aibitralot , but this is distinct1) ι oni ιadieted by the othei side 1 hen i h u c is the letiei ol the 19th o f Janu.uy 1844, written bv II.live) lo the a i h i K i t o i , which I cannot ulveit lo witbout making tlu oh-.eivat ion, that it was cxtiemely impiopei in H.uvcv lo wtilc the same M y lule is to hand ovei all communi.ahons made to me in a cause by one paily, lo the opposite party The last piocceding h u e is ihe inteiview between the a r b i t i a l o i and Harvey, when Ihe lormer staled to the lattei that all was right, and he should shortly make his award This is a matter in which jiislicc is concerned, and not a matter merely !«»"> 1C)b between the |>ailics who aie litigant, but one which eon cerns the public I am not satisfied the aibitralor in this case went beyond the power incident to his office, but he deviated Irom the couisc which |usticc demands ^ L [~ j _ c h/ 4 — ιy >o { Μ \ΚΛΙ UtH'JS CM Awaid ordered lo be set aside, but without c o s t s " ' ,lls ι That extract from the judgment ol the Master of the Rolls speaks for itself and we need not summarise it Suffice it to SOFRONIOS ,U|1 "'' A .L> say that it docs not depart fiom the geneial principles of arbitration laid down in other cases to which we have referred eathei in this judgment, that is to say, that although t\n expert arbitrator who has been appointed because of his knowledge and experience of the tiadc may make use ol his own know­ ledge and expenence on many matters, such as quaht\, without having witnesses called before him,he is prohibited trom violating the rules ol natural pishce, that is, heaium intetcsUd parties, peisonsoi witnesses in the absence οI the olhei \\u\\ Applvmg ihosc genual ptmuples lo the picsent case v\c arc ol the view that the trial Couil came lo a tight conclu­ sion, that is, that Ihe conduct ol ihe arbitiatoi in consulting the supei vising aichiteel, olhci wise than in the piesense of the parties, amounted to misconduct within the puuisioiis ol the law The question now aiises should the awaid be set aside wholly 01 in pail } Il is a well-established pnncipie thai where thcie aie two matters in an award which are enntelv severable then the whole award need not be set aside but only that part which is had This principle was applied not long ago in the case ol Psesttge & Co ν Btettell [1938] 4 All ΪΙR 346, al page 352, where it was held that the award was s c u lable and the fact that the award was bad with rcgaid to £3,167 did not affect the awaid with icgard to £7,500 In this case the appellants claim was foi £691221 mils balance of building contract and extia vvoik and the counterclaim of the respondents as "appearing in the statement delivered to the arbihator (exhibit 1) amounted lo £331 151 mils made up as lollows (a) foi lour months delay in completing ihe work (b) lor woik omitted lo be pelformed by the appellant . lot £180 £151 151 mils v 1965 °1966 0 I'eb 24 — HA AiAMios CiAt AILS , The arbitrator after taking all these into consideration awarded the sum of £670 to the appellant. Even if the arbitralor had accepted ihe respondents* counterclaim of £331.151 mils in full the appellant would still be entitled to judgment |-()(. ^ difference 0r £3j8_y49 mils, which we consider is severable. SOIHONIOS SAWIDIS AMJ \NOMIM' ^he n c x t question winch we have to determine is whether 'he award should be set aside in respect of the whole counterclaim of ihe respondents, lhat is, £331.151 mils or only in respect of item (b) above, that is, the work omitted to be done With regard to item (a), the four months' delay, the arbi­ trator in his affidavit (paragraph 4) stated that the respon­ dents were not entitled tit any damages because the appellant on then instructions executed extra work amounting to £1,735 and " t h e execution thereof required additional con­ siderable time which was not specified in the contract nor was there any agreement specifying the time of execution of such cxtia work ". The trial Court in their judgment said that as regaids the respondents' claim for damages for delay " ihe arbihator was, in our view, legally right in forming the tminion lhat the applicants {respondents in this appeal) were not entitled ιο any such damages in view of the extra work that had been performed aI lheir request ". Now, considering Ihe view we have taken thai the arbitra­ toi has violated fundanienla' iules of natural justice in con­ sulting the supervising .ticltitect in the absence of the respon­ dents bv seeking informniion from him, we do no! think that the Comt can enler into the question whether the finding of ihe arbihator on the que-tion of delay was justified or not. l-oi this icason, we aie, of opinion thai the award should be set aside in respecs of the whole countciclaim ol the respon­ dents amounting to Γί'ί! 151 mils, subject to this quahfiea.',V . · -, l , o n : J J>eems lhat out of ihe tcspondents" counterclaim of 'N: • \ .f rai..5raids' ihe arbiiViior^iilioWcxi iiim- £21.2-2r?Tnils (and ',"'t ' ' * rejected It ν balance) and thus rctiiieed the appellant-':? claim of £691 221 mils to £670 and awarded him that sum The sum of £2j.221 mils should, iherefore, he taken mio account in ajtiH-Mani , favour when Ihe lespondents' counterclaim of Γ3'ί1 Γ)1 mils is leliied. En the icsull the appeal is allowed in part and the judgment of the !>]s|ricl Court modified as follows : tirt (a) the award in respect of £331.151 mils (the respondents' counterclaim) is set aside and the matter will have to be heard de novo, subject to the above qualification ; (b) judgment is entered for the plaintiff (appellant) in the. sum of £338.849 mils plus interest at the rate of 4 % p.a. from the date of the award, i.e. the 4th November,
2. With regard to costs we think lhat, in the circumstances of this case, the respondents should pay to the appellant half his costs here and in the Court below. Appeal allowedin part. Judgment in terms·. Order as to costs as aforesaid. 105 1965 Oct. 20 1966" Feo. 24 CHARALAMSOS G A l ΛΤίν v. SOIRONIO 1 SAVVIDHS AND ANO-NI^R