Subject_1 ARBITRATION. Subject_2 Power of Arbiters.
Hugh Montgomery, v. Strang, Lennox and Company
Date: 13 June 1798 Case No. No 13.
A arbiter cannot award a gratuity to himself; but if he do so from innocent mistake, the other parts of the decree-arbitral will not on that account be set aside.
Click here to view a pdf copy of this documet : PDF Copy
The arbiters, in a submission between Hugh Montgomery, and Strang, Lennox and Company, having differed in opinion, they named Mr John Orr, advovocate, as umpire.
Mr Orr pronounced a decree-arbitral, by which he, inter alia, “decerned against the said Company, and the said Hugh Montgomery, jointly and severally, in payment to James Knox, the clerk, his account of expences, amounting to the sum of L. 14: 2: 11 Sterling.”
One of the articles of Mr Knox's account was, a fee of five guineas to Mr Orr, which appeared to have been given on the day the award was pronounced.
Hugh Montgomery brought a reduction of the decree-arbitral, in which he, inter alia,
Pleaded: The umpire's having given a gratuity to himself must be fatal to the award. The payment of an honorary cannot be enforced by diligence; and if arbiters were permitted to fix the extent of their own remuneration, it would be the source of much oppression; Blair against Gib, infra h. t.; 15th December 1789, Elliot against Elliot, infra h. t.
Answered: If the award is to be set aside on the ground stated by the pursuer, it must either be on the footing of corruption, or because the umpire has exceeded his powers. But corruption is not even alleged; and nothing is more common than for arbiters to give a decree against one or both of the parties, for the expences of the submission, which must necessarily include the gratuity to themselves; Dunlop against Ralston.*
At all events, the pursuer's plea can set aside only the particular clause which awards the gratuity, it being wholly unconnected with the other parts of the decree-arbitral; 6th March 1777, Jack against Cramond.†
The Lord Ordinary, ‘in respect the decree-arbitral under reduction, decerns for payment of an account of expences, wherein there is five guineas stated as paid to the arbiter himself, reduced the said decree-arbitral.’
On advising a reclaiming petition, with answers, it was
Observed on the Bench: Cases may be figured, where an arbiter's giving decree, for a gratuity to himself, would set aside the decree-arbitral in toto. But as it happened in this from no improper motive, that branch of the award only ought to be reduced as ultra vires.
The Lords ‘found the last article in the decree-arbitral, decerning against the parties, conjunctly and severally, for a sum of expences, was ultra vires compromissi, and that the decreet falls to be set aside to that extent: But found, That
* Not collected, and the date not mentioned in the printed paper. See Appendix.
† Not yet collected. See Appendix.
the arbiter's having exceeded his power in this instance, affords no objection to the other parts of the decree-arbitral.’
Lord Ordinary, Justice Clerk Braxfield.Act. Geo. Fergusson.Alt. H. Erskine.Clerk. Home.
Fac. Col. No 82. p. 189.
