LEX/BDHC/0161/2019

Equivalent/Neutral Citation: 202018 ALR (HC D) 78, 202018 ALR (HC D) 78, 2020(28)BLT(HC D)117, 72 DLR (2020) 459

IN THE SUPREME COURT OF BANGLADESH (HIGH COURT DIVISION)

Arbitration Appeal No. 03 of 2014
Decided On: 27.10.2019
Oram Limited Vs. Reckitt Benckiser (Bangladesh) Limited
Hon'ble Judges/Coram:
Borhanuddin and Sardar Md. Rashed Jahangir, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: M. Moyeen A. Firozee, Md. Rafiul Islam and Md.
Muazzem Hossain, Advocates
For Respondents/Defendant: Ahsanul Karim, Aminul Hoque, Farzana Khan, Majibul
Haque Bhuiyan and M. Abdul Qaium, Advocates
JUDGMENT
Borhanuddin, J.
1. This appeal is directed against the judgment and order dated 4-3-2014 passed by the
learned District Judge, Dhaka, in Arbitration Miscellaneous Case No. 661 of 2007 setting
aside the arbitral award dated 12-10-2006 passed by the majority decision of the
arbitral Tribunal.
2. Facts relevant are that the parties of the appeal executed two agreements on 30-10-
1991, one for Joint Venture and another for Manufacturing; By executing agreement for
Joint Venture, the parties agreed that they shall enter into a separate agreement for
manufacturing and purchasing of Mosquito Coils, 2nd party shall offer and 1st party
shall buy 5,000 ordinary shares at a face value of Taka 100 per share to a total of Taka
500,000 from the 1st party's retaining earnings and further agreed that the 2nd party
shall guarantee a minimum of 10% dividend per annum on the shares that shall be
purchased by the 1st party, production and purchase of the products shall be governed
as per provision of the manufacturing agreement, said agreement contained arbitration
clause; Accordingly, the parties executed manufacturing agreement as buyer and
supplier for the product containing the provision for arbitration; On 27-5-2004 the
appellant herein i.e. 2nd party supplier of the manufacturing agreement served a legal
notice through it's lawyer to the 1st party buyer claiming loss of Taka 15,51,41,000 for
the period between 2001 to March, 2004; Respondent 1st pay replied to the notice
denying claim of the appellant 2nd party on 2-6-2004; Then the appellant 2nd party
through it's lawyer served notice for arbitration on 3-7-2004 claiming the amount
mentioned in the legal notice dated 27-5-2004; Thereafter both the parties appointed
their arbitrator and the arbitrators nominated Chairman of the Tribunal. In the Tribunal,
the appellant 2nd party as claimant filed statement of claim asserting (a) Loss of
Earnings at Taka 15,55,12,975 from the year 1993 to June, 2005 (b) Loss of Investment
for the period between 1993 and 2003 at Taka 3,25,26,656 (c) Loss of Opportunity at
Taka 4,00,00,000 (d) Consequential Loss at Taka 2,25,00,000 (e) Loss of Goodwill at
Taka 7,50,00,000 and interest pendente lite at the rate of 18% on the total amount of
Taka 32,55,39,631.

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3. The respondent 1st party filed defence to the statement of claim stating that claim is
time barred and frivolous one and also beyond the jurisdiction of Tribunal since the
reference by way of notice for arbitration is for the period from 2001 to 2004 for an
amount of Taka 15,50,41,000 including interest @ 18% per annum; After hearing the
parties and perusing the evidence, arbitral tribunal awarded loss of earnings at Taka
9,91,09,150 from the year 1993 to 2005 based on lifting plan agreed upon by the
parties and also awarded Taka 20,00,000 as loss of investment for the period 1993 to
2003 with pendente lite interest @ 15% from the date of reference i.e. 1-7-2005 till
realization of the amount by majority decision dated 12-10-2006 discarding other
claims of the appellant-claimant. Dissenting award has been passed by another
arbitrator on 19-12-2006 rejecting claim of the claimant.
4 . Challenging majority decision of the arbitral-tribunal, the respondent as petitioner
filed Arbitration Miscellaneous Case No. 661 of 2007 in the court of learned District
Judge, Dhaka, under section 42 read with section 43 of the Arbitration Act for setting
aside the award dated 12-10-2006 passed through majority decision. The claimant-
respondent contested the suit by filing written statement. Upon hearing the parties and
assessing evidence on record, learned District Judge set aside the award dated 12-10-
2006 vide his judgment and order dated 4-3-2014.
5. Having aggrieved by and dissatisfied with the judgment and order, opposite party of
the miscellaneous case as appellant moved before this court under section 48 of the
Arbitration Act.
6 . Mr M Moyeen A. Firozee, learned advocate appearing for the appellant submits that
the judgment and order passed by the learned District Judge is solely based on merit of
the award which is beyond the scope of section 42 and 43 of the Arbitration Act and, as
such, the same is liable to be set aside. He also submits that the court below passed the
impugned judgment and order by setting aside the arbitration award considering the
legal notice as the terms of reference and thus arrived at an erroneous finding that the
Tribunal passed it's award beyond the terms of reference which is a complete
misconstruction and misconception of law since the terms of reference for arbitration is
always set by the Tribunal as such impugned judgment and order is liable to be set
aside. He next submits that the court below passed the impugned judgment and order
holding that the majority arbitrators of the Tribunal passed the award without
discussing and consulting with the dissenting arbitrator and thus arrived at a wrong
finding that the award is against the public policy which is not based on law and fact as
such impugned judgment and order is liable to be set aside. He again submits that the
court below erroneously arrived at a finding that the Tribunal did not provide an
opportunity to the respondent to cross examine witnesses and thereby respondent failed
to present it's case properly without considering the law that the Tribunal is well within
it's capacity to decide the procedural and evidential issues as such impugned judgment
and order is liable to be set aside. He also submits that learned District Judge set aside
the award on the finding that in absence of any breach of contact the award is contrary
to the provisions of section 73 of the Contract Act without taking into consideration that
the Tribunal by a majority decision after detailed discussions determined respondent is
in breach of contract which is final and determination of correctness of Tribunal's
finding on the issue of breach of contract is beyond the scope of the court below under
sections 42 and 43 of the Arbitration Act as such impugned judgment and order is liable
to be set aside. He further submits that court below set aside the arbitral award
erroneously holding that the award is barred by limitation without considering that the
plea of limitation raised by the respondent was rejected by the Tribunal after thorough
and meticulous discussions as such finding of the court below is beyond the scope of

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section 42 and 43 of the Arbitration Act and liable to be set aside. He lastly submits that
impugned judgment and order is otherwise bad in law as the arbitration is an
alternative process meant for faster dispute resolution but due to delay and
reconsideration of settled issues in frivolous manner deliberately destroying the purpose
of Arbitration Act, 2001 as such impugned judgment and order is liable to be set aside.
In support of his submissions, learned advocate referred to the case of State of Orissa
vs Kalinga Const. Co. (P) Ltd., reported in MANU/SC/0007/1970 : AIR 1971 SC 1646;
the case of State Trading Corp, of India Ltd. vs Toepfer Int. Asia Pte Ltd, reported in
(2014)(5) RAJ 301 (Del) (DB); the case of Rising Sun Traders Ltd vs Chittagong Port
Authority (1991), reported in LEX/BDHC/0187/1990 : 43 DLR 1; the case of Helm
Dungenmittel Gmbh vs BCIC, reported in (2011) 16 BLC 783; the case of Puri
Construction Co. vs Union of India, reported in MANU/SC/0427/1989 : AIR 1989 SC
777; the case of IOC Ltd. vs Devi Constructions, Engineering Contractors, reported in
2009(4) (RAJ) 584 (Mad) (DB); the case of Santa Sila Devi vs Dhirendra Nath Sen,
reported in MANU/SC/0004/1963 : AIR 1963 SC 1677; the case of Sundarshan Trading
Co. vs Govt. of Kerala, reported in MANU/SC/0361/1989 : AIR 1989 SC 890; the case of
Himachal Pradesh State Electricity Board vs RJ Shah, reported in MANU/SC/0266/1999 :
(1999) 4 SCC 214, the case of Saudi Airlines vs Saudi Services Co., reported in 15 BLD
(AD) 269 : 75 BLC (AD) 190; the case of Natha Subramanayam Chettey vs Menta
Subramaniah, reported in AIR 1959 AP 1999 (DB); the case of Nirendra Singh Co. vs
Central Warehousing Corp., reported in 1989 (1) Arb LR 27; the case of RS Builders vs
Delhi Development Authority, reported in AIR 1995 Del 10; the case of MP Housing
Board vs Progressive Writers & Publishers, reported in MANU/SC/0418/2009 : (2009) 5
SCC 678; the case of Municipal Corp. of Delhi vs Jagan Nath Ashok Kumar, reported in
AIR 1987 (SC) 2316 and the case of State of Rajasthan vs Puti Constructions Engineers,
reported in MANU/SC/0865/1994 : (1994) 6 SCC 485.
7. On the other hand, Mr. Ahsanul Karim learned advocate appearing for the respondent
submits that the court below framed the issue that whether the award is correct and
lawful and be sustained, the very purpose of the issue is to determine whether the
award is correct and lawful within the grounds permissible under sections 42 and 43 of
the Arbitration Act and the court has jurisdiction and power to see that whether the
Arbitral Tribunal is wrong in it's conclusion and to arrive at a correct finding the court
can see the materials on record. In support of the impugned judgment and order,
learned advocate submits that the learned District Judge after assessing the evidence on
record correctly arrived at a finding that the claim is time barred and beyond the scope
of the submission to arbitration, against the public policy since the award passed
without discussion by all the arbitrators, there is nothing in the manufacturing
agreement that the buyer is bound to place an order for certain quantity of the product
in a year and the award passed contrary to the provisions of section 73 of the Contract
Act. He again submits that by notice for arbitration the claimant-appellant referred the
dispute to the arbitral tribunal for the period between 2001-2004 for an amount of Taka
15,51,40,000 but the tribunal dealt with dispute not contemplated by or not following
the terms of the arbitration and contains decision on matters beyond the scope of
submission to arbitration as such the award is liable to be set-aside under section
43(1)(b)(ii) (iii). He next submits that legal notice of the claimant-appellant dated 27-
5-2004 is the basis of dispute as spelt out in the notice for arbitration under section 27
of the Arbitration Act which claimed for the period between 2001 to June, 2004 and the
claimant served the notice for the period knowing fully well that any claim before 2001
is time barred as such the learned District Judge arrived at a correct finding that the
award passed by the Tribunal treating the period from 1993 to 2005 is barred by
limitation. Continuing his argument, learned advocate submits that under section 55 of
the Arbitration Act, the Limitation Act 1908 shall apply to the arbitration proceedings as

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it applies in the proceedings before a civil court and for the purpose of Arbitration Act,
arbitration shall be deemed to have commenced upon issuance of notice under section
27 of the Arbitration Act as such there is nothing to interfere with the impugned
judgment and order. He again submits that the Joint Venture Agreement had no relation
whatsoever with the manufacturing agreement and each of the agreement was distinct
and for separate purpose and relationship between the parties so far the manufacturing
agreement is concern shall be governed by the terms and conditions as contained in the
manufacturing agreement and thus the majority arbitrators illegally on their own set out
new terms in the agreement since the Joint Venture Agreement being an independent
agreement for all purpose by no means can be said to be collateral or supplemental or
dependent to the manufacturing agreement as such learned District Judge justly and
legally set-aside the award. He further submits that neither the Joint Venture Agreement
nor the manufacturing agreement impose any obligation on the respondent to take
supply of any specific quantity of goods or any goods at all unless required by the
respondent as such findings of the majority arbitrators that the nature of the present
case is one of continuing contract and limitation act is not applicable in the present case
is not correct proposition of law. He also submits that it is apparent from the majority
decision as well as dissenting one that there was no discussions amongst the arbitrators
before the award was made and, as such, learned District Judge correctly arrived at a
finding that the award is in conflict with the public policy of Bangladesh and liable to be
set aside under section 43(1)(b)(iii) of the Arbitration Act. In support of his
submissions, learned advocate referred to the case of Organizing Committee
Commonwealth Games 2010 vs Pico Deepali Overlays Consortium, reported in 2016 (2)
Arb LR 209; the case of Msk. Projects (I)(JV) Ltd. vs State of Rajasthan, reported in
2011(3) Arb LR 119 (SC); David Taylor & Son Ltd. vs Barnett Trading Co., (1953) I
WLR 562; the case of Nathani Steel Ltd. vs Associated Constructions, 1995 Supp (3)
SCC 324; the case of Goyal MG Gases Ltd vs Double Dot Finance Ltd, reported in
2009(2) Arb. LR 655; the case of Ennore Port Limited vs Skanska Cementation India
Limited, reported in 2008 (2) Arb LR 598 (Madras); The case of State of Tripura vs
Sabitri Salt Supplier, reported in 2007(3) Arb LR 519 (DB); The case of Chief Engineer,
Military Engineer Services, Chennai vs KV Narayann, reported in 2000 (supp) Arb LR
504 (Madras); the case of Indian Oil Corporation vs LLOYDS Steel Industries Ltd.,
reported in 2007(4) Arb LR 84(Delhi) and the case of Ennore Port Limited vs Skanska
Cementation India Limited, reported in 2008(2) Arb LR 598 (Madras).
8. In support of their contention, learned advocate for the parties file separate written
submission.
9 . Heard learned advocate for the appellant and the respondent. Perused paper books
and the papers/documents contained therein as well as citations referred by learned
advocates for the parties.
1 0 . Admittedly, both the parties executed two agreement on 30-10-1991. At first,
executed an agreement of Joint Venture and thereafter the agreement for
manufacturing.
Salient features of the Joint Venture Agreement are:
(i) Oram was not in a position to utilize its full installed capacity of its
manufacturing plant for want of necessary working capital and lack of modem
manufacturing and marketing techniques.
(ii) The parties to enter into a separate agreement for manufacturing and

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 purchasing of MMC.
(iii) Oram to transfer 5,000 preferential shares at the face value of Taka 100 per
share to Reckitt.
(iv) Oram to pay guaranteed minimum 10% dividend per annum on the shares
purchased by Reckitt.
And Salient features of the Manufacturing Agreement are:
(a) The buyer has obtained from its parent company and in possession of the
formula and manufacturing process of Mortein Mosquito Coil.
(b) The buyer is the Registered user of the trademark "Moretin".
(c) The Supplier has a registered manufacturing plant for Mosquito Coil at
BSCIC Industrial Estate, Mymensingh.
(d) The buyer has agreed with the Supplier that the supplier shall manufacture
MMC in its factory and sell to the buyer upon the terms and conditions of the
agreement.
11. It is clear from the conditions set forth in the agreements that Oram was under
obligation to manufacture, process and pack the product in accordance with
specification of manufacturing and packing formula from time to time supplied to them
by the Reckitt which was the property of the Reckitt, Oram was prohibited to
manufacture or pack the product without consent of the Reckitt and the Oram would
provide all base materials specified in schedule 1 of the agreement and the Reckitt
would provide the active/additives as mentioned in the schedule II. Amongst the
conditions, clause 2 of the manufacturing agreement is vital which is reproduced below:
"2. The Buyer and the Supplier shall from time to time discuss the Buyer's
future requirements of the products specifying quantities and delivery dates.
The Buyer and the Supplier shall then negotiate and mutually agree prices and
terms of payment. The Buyer and the Supplier shall then confirm the order and
acceptance in writing. The existing agreed prices and terms of payment is
mentioned in schedule-III."
12. The core object/ingredient of the manufacturing agreement is order and supply by
the buyer and supplier. Contents of clause 2 shows that the supplier comply with the
order from time to time as and when order would be placed by the buyer. This conduct
of the contracting parties occupy the central stage through clause 2 of the agreement.
1 3 . The offer to buy through placement of order and the acceptance by the
manufacturer to supply is intervened by modalities of placement of order and
acceptance of supply in clause 2 of the manufacturing agreement. The modalities
enumerate several volitional reciprocal events. Sequence wise those events are (A)
buyer and seller discuss (i) from time to time (ii) future requirement (iii) specifying
quantities and (iv) delivery date. (B) Buyer and seller then negotiate and mutually agree
(i) price (ii) terms of payment (C) Buyer then (i) confirm order (ii) seller confirm
acceptance to supply in writing.
1 4 . Unless both seller and buyer have gone through these series of sequential
contingent events, there is no static obligation upon buyer to place order for pre-fixed
quantity. Likewise the supplier does not acquire any contractual right to supply any

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static quantity and seek any enforcement, unless the offer to buy and acceptance to
manufacture and supply, reach finality through the modalities. The supplier has no
contractual right to claim supply prefix quantity of suppliers choice. Nor the buyer
suffers any contractual obligation to place order or buy any static quantity of suppliers
choice.
15. Above congenital events never have been taken place. Those events were never
ever resorted to from either side. It is very significant that the supplier from the date of
execution of the agreement never ever raised any objection or demanded
implementation and performance by the buyer of the contingents/events of clause 2.
Pursuant to clause 2 of the agreement the supplier never demanded to the buyer to
implement and perform the events/contingents as stipulated in clause 2. So, it cannot
be said under any legal proposition that clause 2 survives and remains implementable.
The supplier seems to have forgotten that every contingent of clause 2 are to be
performed jointly. For instance, the first contingent i.e. time to time discussion. It is
never an unilateral performance. Both supplier and buyer together have to discuss. In
the absence of any discussion initiated by the buyer, the supplier is also under
contractual obligation under the clause to initiate discussion. The clause is very clear.
16. It is assumed that the business between the parties was not smooth one which is
evident from the letters exhibited by the parties. Still then the supplier-appellant never
raised a dispute before serving legal notice dated 27-5-2004. It is apparent from the
legal notice that the appellant for the first time raised the dispute alleging breach of
contract. We are quoting relevant portion from the legal notice dated 27-5-2004 by
which for the first time the appellant raised a dispute:
6 . That suddenly from 2001 your company in breach of contract, existing
practice dropped its order from about 14,000 cartons/outers per month to
9,000 cartons/outers per month. In 2002 your company ordered only about
2,000 cartons/outers per month.
7 ................
8 ................
9 ................
10 ................
1 1 . That your company by way of using persuasive words and showing a
friendly and honest attitude assured our client that they will lift all the products
manufactured by our client and our client being assured by your company
increased its production capacity from 7000 outers to 15000 outers per month
after investing 1,50,00,000 (Taka one core fifty lac only).
The claim of loss due to your company's failure to lift the products produced by
our client is shown below:

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17. The respondent replied to the legal notice denying claim of the appellant and then
the appellant sent notice for arbitration dated 3-7-2004 referring the legal notice which
runs as under:
"A dispute has arisen between our client and you arising out of and/or relating
to the above mentioned agreements.
Reference may be made to our legal notice dated 27-5-2004 wherein, we on
instruction of our client Oram Ltd. SEL centre, 7th floor, 29 West Panthapath,
Dhaka a claim for Taka 15,50,41,000 (fifteen core fifty lac and forty one
thousand) including interest at the rate of 18% per annum was made and to be
so paid as compensate within 3 days from the date of receipt of the letter for
the loss it incurred due to your company's willful breach of the aforesaid
agreements.
But the aforementioned amount has not been paid by your company as yet. On
3-6-2004 your company through Barrister Omar Sadat sought 15 days time to
respond to the same. Though more than a month has elapsed but there is no
response from your company, apart from total silence. In the event of such
dispute, the above agreements provides for settlement of the same by way of
arbitration."
1 8 . So, it is apparent that the dispute referred by the notice for arbitration is the
dispute set forth in the legal notice for the period 2001 to June, 2004. Thereafter, the
parties nominated their arbitrator and arbitral tribunal was constituted comprising three
members, Chairman and two arbitrators. Before issuance of the aforesaid legal notice,
the appellant never ever raised a dispute for breach of contract and claimed loss/
compensation. When the tribunal passed order to file statement of claim then the
claimant i.e. the appellant herein claimed loss of earnings from the year 1993 to June,
2005 alongwith loss of investment, loss of opportunity, consequential loss, loss of
goodwill and interest at the rate of 18% on the amount.
19. The particulars of claim as stated in the Statement of claim are as follows:
I. Actual Loss
(a) Loss of earnings

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(b) Loss of investment between 1993-2003

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20. In the statement of claim the appellant claimed loss of earnings from the year 1993
to June, 2005 which is beyond the scope of the reference to arbitration vide notice for
arbitration.
21. Now the question is what is reference to arbitration. In the case of Goa vs Praveea
Enterprise (Civil Appeal No. 4987 of 2011), Indian Supreme Court observed:
"Reference to arbitration describe various Acts. Reference to arbitration can be
by parties themselves or by an appointing authority named in the arbitration
agreement or by a court on an application by a party to the arbitration Act."
.................................................................................
.................................................................................

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 "Reference to arbitration can be in respect of all disputes between the parties or
all disputes regarding a contract or in respect of specific enumerated disputes.
Where all disputes are referred, the arbitrator has the jurisdiction to decide all
disputes raised in the pleadings (both claims and counter claims) subject to any
limitations raised by the arbitration agreement. Where the arbitration agreement
provides that all disputes shall be settled by arbitration but excludes certain
matters from arbitration, then the arbitrator will exclude matters and decide
only those disputes which are arbitrable. But where the reference to the
arbitrator is to decide specific disputes enumerated by the parties/court/
appointing authority, the arbitrator's jurisdiction is circumscribed by the specific
reference and the arbitrator can decide only those specific disputes."
.................................................................................
"After a dispute arises between the parties, they enter into an arbitration
agreement to refer that specific dispute to arbitration. In such an arbitration,
the arbitrator cannot enlarge the scope of arbitration by permitting either the
claimant to modify or add to the claim or the respondent to make a counter
claim. The arbitrator can only decide the dispute referred to him/them, unless
parties again agree to refer the additional disputes/counter claims to arbitration
and authorize the arbitrator to decide them."
Section 27 of the Arbitration Act provides that:

2 2 . Section 27 of the Arbitration Act provides that unless otherwise agreed by the
parties, the arbitral proceedings in respect of a particular dispute commences on the
date on which a request for that dispute to be referred to arbitration is received by the
respondent. The purpose of section 27 is to specify, in the absence of the provision in
the arbitration agreement in that behalf, as to when an arbitral proceedings in regard to
a dispute commences, this became relevant for the purpose of section 55 of the Act.
23. Sub-section 1 of section 55 of the Arbitration Act provides that the Limitation Act
shall apply to arbitrations as it apply to proceedings in court. Sub-section (2) of section
55 provides that for the purpose of section 55 and the limitation act an arbitration shall
be deemed to have commenced on the date referred to in section 27 of the Act. Having
regard to section 55 of the Act, any claim made beyond the period of limitation
prescribed by the limitation act will by barred by limitation and the arbitral tribunal will
have to reject such claim as barred by limitation.
24. Section 3 of the Limitation Act provides that subject to the provisions contained in

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sections 3 to 25 (inclusive), every suit instituted, appeal preferred, and application
made after the prescribed period shall be dismissed although limitation has not been set
up as a defence.
2 5 . In view of section 27 of the Arbitration Act providing that the arbitration
proceedings shall be deemed to commence on the date on which "the request for that
the dispute to be referred to arbitration is received by the respondent" which is clear
and unambiguous. Therefore, the purpose of section 27 of the Act is to determine the
date of commencement of arbitration proceedings relevant mainly for deciding whether
the claim of the claimant is barred by limitation or not. Statement of claim is not a
reference. Statement of claim is elaboration and narration of evens initiated by the
notice for arbitration. In this particular case the notice for arbitration is preceded by the
legal notice. Notice for arbitration specifically stipulates the period of claim and the
amount of claim. Whether this claimed amount is payable or not is the dispute which
has been referred for arbitration. The tribunal could not have travelled beyond the terms
of reference i.e. the notice for arbitration i.e. the period being the year 2001-2004 and
the amount Taka 15,51,40,000. In the case of Milkfood Ltd. vs GMC Ice cream(P) Ltd.,
Indian Supreme Court held:
2 6 . "The commencement of an arbitration proceeding for the purpose of
applicability of the Indian Limitation Act is of great significance. Even section
43(1) of 1966 Act provides that the Limitation Act 1963 shall apply to the
arbitration as it applies to proceedings in court. Sub-section (2) thereof
provides that for the purpose of the said section and the Limitation Act, 1963,
an arbitration shall be deemed to have commenced on the date referred to in
section 21. (section 27 of our Arbitration Act).
[Emphasis supplied by us]
26. So, it is clear that arbitral award by the majority arbitrator has dealt with dispute
not contemplated by or not falling within the terms of the arbitration and contains
decision on matters beyond the scope of the submission to arbitration. In the case in
hand, notice for arbitration referred legal notice dated 27 May, 2004 and the amount
mentioned therein. Then the dispute for settlement described as under:
"But the aforementioned amount has not been paid your company as yet. On 3-
6-2004 your company through Barrister Omar Sadat sought 15 days time to
respond to the same. Though more than a month has elapsed but there is no
response from your company, apart from total silence. In the event of such
dispute, the above agreements provides for settlement of the same by way of
Arbitration".
27. Thus, it is clear that the reference was for the period from 2001 to June, 2004 for
the amount of Taka 15,51,40,000.
28. Apart from that, if we read Article Art and 115 of the Limitation Act it is apparent
that the claim is time barred. A dispute arises where there is a claim and a denial and
repudiations of the claim. The existence of dispute is essential for appointment of an
arbitrator under section 12 or a reference under section 27 of the Arbitration Act. There
should be dispute and there can only be a dispute when a claim is asserted by one party
and denied by other on whatever grounds.
29. In the case in hand, it is apparent that since 1993-2000 i.e before issuance of legal
notice the appellant never raised any dispute regarding any sort of breach of contract.

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As such we are of the view that the arbitral tribunal has dealt with dispute not
contemplated by or not falling within the terms of the submission to arbitration and for
that reason dealt with matters beyond the scope of the submission to arbitration and
thus it is apparent that the award is hit by section 43(1)(b)(ii) of the Arbitration Act.
3 0 . Learned District Judge arrived at a finding that the majority arbitrators did not
consult with the dissenting arbitrator before preparing the award. It appears from order
no. 27 dated 10-10-2006 that the order though signed by the majority arbitrators but
signature of dissenting arbitrator is absent.
31. The order is reproduced below:
Hearing of the matter was concluded on 2-9-2006. Thereafter, 17-9-2006 was
fixed for passing of the award. The award having not been prepared, 12-10-
2006 was again fixed for passing of the award.
In the meanwhile, on 21-9-2006 at 9-15 MP, the 2nd Party-Respondent filed an
application for allowing the Respondent to cross-examine the witness of the
Claimant. In the application, it has been stated that on 2-9-2006 on the eve of
closing of the hearing, the 1st Party-Claimant submitted a bunch of new
documents. As such 2nd Party need time to controvert those documents and to
cross-examine the witness of the claimant.
Considered the application. Tribunal will not take into consideration the new
documents.
Hence, the application is rejected. The award will be passed on 12-10-2006 as
fixed earlier.

The dissenting award started with the sentence,

"I had the opportunity to read the award given by Mr Justice Latifur Rahman,
Chairman of the Arbitral Tribunal and Mr. Rokanuddin Mahmud, Arbitrator. But
for the reasons detailed hereinafter I failed to concur with the same. Hence, I
have given the dissenting award as follows".
32. From the above it is apparent that before passing the award the arbitrators did not
discuss amongst themselves. There was lack of deliberation between the arbitrators in
this case. It is not manifest from the majority award as well as dissenting award that
there was discussion amongst the arbitrators before the award was made which is
against public policy and attract section 43 of the Arbitration Act. Public policy as
defined in 63 DLR 234 in the case of Chittagong Port Authority vs Ananda Shipyard and
Slipways Ltd., paragraph 43:
"Public policy of Bangladesh means the principles and standard regarded by
legislature or by court as being of fundamental concern to the state and whole

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 of the society. Thus an award to be refused, as being contrary to public interest
if it is contrary to
i. Fundamental Policy of Bangladesh law
ii. Interest of Bangladesh
iii. Justice or morality
iv. In addition, if it is patently illegal."
33. Public policy as defined in the case of Saudi (BD) Services Ltd. vs Saudi Airlines in
paragraph 43:
"As the expression is incapable of precise definition, those challenges would be
available, if the Court finds the award obnoxious to its sense of justice, based
on settled principles of law, whether as to the conduct of the arbitrator or
arbitral proceedings or the award itself. Justice is the beginning and the end.
Law must ultimately reach out to justice. Public Policy contemplates that, Courts
must reflect it".
34. Considering the aforesaid discussions, we are of the opinion that Impugned award
passed by the majority Arbitrators of the Tribunal is not legal and binding upon the
parties in view of the fact that one of the Arbitrator was completely left out of the
process of consultation before making, finalizing and even delivering/passing the
award. The spirit and intent of the Arbitration Act, 2001, is to ensure that the arbitration
proceeding including the making, signing and passing of the award is conducted by
effective participation of all the members of the Tribunal but in the instant case there
was a clear deviation therefrom. There may be an award by the majority but such an
award has to be made after taking due consideration of the views and opinion of the
dissenting arbitrator. The award dated 12-10-2014 is not a valid award because the
arbitrators did not act in a concerted manner nor there was any unanimous and effective
participation in consulting and deliberating upon the award to be made, which is against
the intent and purport of the Arbitration Act and the respondent's arbitrator was totally
and completely excluded from the process of deliberation before the award was made
and thus the majority arbitrators failed to do justice to the parties which is against the
public policy of Bangladesh and thus this has vitiated the entire award and, as such, the
impugned award has been set aside by the court below considering the provision of
section 43(1)(b)(iii) of the Arbitration Act, 2001.
35. In the premises above, we do not find any reason to interfere with the findings of
the learned District Judge in the Arbitration Miscellaneous Case No. 661 of 2007 setting
aside the arbitral award dated 12-10-2006 passed by the majority arbitrators.
36. Accordingly, the appeal is dismissed.
37. Judgment and order dated 4-3-2014 passed by the learned District Judge, Dhaka, in
Arbitration Miscellaneous Case No. 661 of 2007 is hereby maintained.
Send down lower court records alongwith a copy of this judgment to the Court concern
at once.
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