Contractual appellate arbitration can validly apply to pending disputes when parties adopt by-laws from time to time.

A contractual arbitration clause incorporating by-laws in force from time to time can validly create a right of appeal against the original arbitral award. The later introduction of an appellate by-law may apply to a dispute already pending when the by-law was adopted, because the parties had agreed that future by-law changes would govern their bargain. A contractual appellate stage is also not inconsistent with the Arbitration Act, 1940, since parties may structure arbitration in stages and the final award is the one made after the agreed procedure is completed.

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Issues: (i) Whether by-law 202 conferred a right of appeal to a party aggrieved by the original arbitral award; (ii) whether the appellate remedy could be invoked in a dispute already pending when the by-law was introduced; and (iii) whether the provision for an appellate tribunal was ultra vires the Arbitration Act, 1940.

Issue (i): Whether by-law 202 conferred a right of appeal to a party aggrieved by the original arbitral award.

Analysis: A right of appeal is not a matter of natural justice and exists only when conferred by law or by necessary implication. The wording of the by-law, especially the expressions referring to an appeal being preferred and to an award against which such appeal lies, could not be treated as meaningless. The clause had to be read in a way that gave it business efficacy, and the surrounding contractual terms showed that the parties had accepted the governing by-laws from time to time.

Conclusion: The by-law did confer a right of appeal.

Issue (ii): Whether the appellate remedy could be invoked in a dispute already pending when the by-law was introduced.

Analysis: Although the ordinary rule is that a vested right of appeal is governed by the law in force when the lis commences, that principle did not control a contractual arbitration arrangement. The contract expressly subjected the parties to the by-laws in force from time to time, so later modification of the by-laws became part of the bargain governing the dispute. The appellate step was therefore available despite the earlier commencement of the reference.

Conclusion: The appellate remedy was available to the parties notwithstanding the later introduction of the by-law.

Issue (iii): Whether the provision for an appellate tribunal was ultra vires the Arbitration Act, 1940.

Analysis: The Arbitration Act does not prohibit parties from structuring arbitration in stages or from agreeing to an appeal within the contractual framework. The award that is final and binding is the award that emerges from the agreed procedure, including any contractual appellate stage. Since the contract permitted modification of the governing by-laws and the appellate process formed part of that agreed procedure, the appellate arrangement was consistent with the Act.

Conclusion: The provision for an appellate tribunal was not ultra vires the Arbitration Act, 1940.

Final Conclusion: The appeal failed on all substantial grounds, and the award made by the appellate tribunal was left undisturbed.

Ratio Decidendi: Where parties contractually adopt by-laws governing arbitration from time to time, a later by-law providing an appellate stage can validly operate within the arbitration process, and such a contractual appellate mechanism is not inconsistent with the Arbitration Act, 1940.

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