"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well." -Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Tuesday, January 11, 2011

More on the Functus Officio Rule

In the last post, we had commented on the case of PMA Shukkoor v. Muthoot Vehicle and Asset Finance Ltd.and had discussed the functus officio rule. Readers wanting to have an intro on this aspect can have a quick look at the previous post. In this short post, we shall analyse the rationale behind the functus officio rule (which has been duly incorporated in Section 32 of the Arbitration and Conciliation Act, 1996 (1996 Act). But before doing that we will also try to inform the reader as to the origins of this rule.

According to the Law Management Blog the rule is said to have originated from the English Court of Appeal decision in In re St. Nazaire Company 12 Ch D 88 (1879). However, we find mention of the rule even in India as early as in 1875. In a judgement by the Calcutta High Court in the case of Omritolall Dey (1876) ILR 1 Cal 79 (decided on 09.09.1875), we find the mention of the functus officio rule. In this case, a writ of habeas corpus was filed for production of Omritolall before the court. According to Omritolall the detention was illegal as he was privileged from arrest and should have been discharged. Against this, it was contended that the commitment of the Omritolall into custody was in furtherance of the execution by by the Small Causes Court of its judgement. The Calcutta High Court had to decide whether it had the power to inquire into the validity of the commitment made by the Small Causes Court. The Calcutta High Court held that the Small Causes Court was not a court of co-ordinate authority and hence the High Court could inquire into the legality of the Small Causes Court's order. Against Omritolall's petition a preliminary objection was raised that the petitioner should have approached the Small Causes Court first for the vacation of his commitment. The Judge however brushed aside the objection on the ground that the Omritolall had actually approached the said court but the said court refused to entertain the petition without giving reasons. The court conjectured that the Small Causes Court had refused to entertain the petition because the court might have assumed it was functus officio. It held:
"I may remark that in the present instance the preliminary objection cannot be made, for the prisoner has applied to the Small Cause Court, but has not there succeeded in obtaining his discharge. The cause of his failure does not appear. It may be that the Court thought it was functus officio, 'and had no power at the stage which the matter had then reached to order his discharge."
We find evidence that the rule was firmly entrenched into common law jurisprudence even in 1875. Therefore, we have to look earlier in the past to find the origins of the doctrine. In fact, the judgement we had analysed in the last post- the Kerala High Court in PMA Shukkoor v. Muthoot Vehicle and Asset Finance Ltd- provides that the rule originated in the English case of Mordue v. Palmer (1871) LR 6 Ch. App.22. It would seem from some digging up that the doctrine went further back into the past. The earliest reference to the doctrine seems to be in 1285 when King Edward I of England proclaimed:
"Although we have granted our justices to make record of pleas pleaded before them, yet we will not that their own records shall be a warranty for their own wrong, nor that they may raise their roles, nor award them contrary to their original enrollment."
[(See, footnote 2, Michael Cavendish, Feature: Fortress Arbitration: An Exposition Of Functus Officio 21, 80 Fla. Bar J. 20 (2006).] It seems Edward I adopted the strategy of levying huge  fines on judges who erased or altered their records to fill up his treasury. 

Rationale for the Rule:
The reasons for the rule are virtually the same as that of Res Judicata. The Functus Officio rule provides a finality to the decision of the tribunal (tribunal is used here in a generic sense of the term to refer even to courts and arbitral tribunals). The rule prevents a tribunal from  overturning its own judgement thereby ensuring that there is an end to the legal proceedings. Litigants would be put to trouble if they do not know when a decision in their favour would be overturned by the court. Thus, this doctrine affords a certain level of security to the litigants (A "certain" level because the rule cannot offer complete security due to the presence of the appeal process).. However, we find that in the case of La Vale Plaza v. Noonan 378 F.2d 569; 1967 U.S. App. LEXIS 6212; 11 Fed. R. Serv. 2d (Callaghan) 415; 37 A.L.R.3d 189, a slightly different rationale is given for the applicability of the rule in arbitration.  According to the court, the arbitration is an informal mechanism of resolving disputes and the arbitrator might be influenced by corruption or undue influence. The court held:
"The policy which lies behind this is an unwillingness to permit one who is not a judicial officer and who acts informally and sporadically, to re-examine a final decision which he has already rendered, because of the potential evil of outside communication and unilateral influence which might affect a new conclusion. The continuity of judicial office and the tradition which surrounds judicial conduct is lacking in the isolated activity of an arbitrator, although even here the vast increase in the arbitration of labor disputes has created the office of the specialized professional arbitrator."
Resources on Functus Officio:
Apart from the sources already cited, one might have a look at the following sources.
Bayne v. Morris, 68 U.S. (1 Wall.) 97 (1863)
Gary B. Born, INTERNATIONAL COMMERCIAL ARBITRATION 2513-2520 (Vol. III) (2009).
For criticisms on the rule, see Michael Cavendish, Feature: Fortress Arbitration: An Exposition Of Functus Officio, 80 Fla. Bar J. 20 (2006) and James M. Gaitis, International and Domestic Arbitration Procedure: The Need for a Rule Providing a Limited Opportunity for Arbitral Reconsideration of Reasoned Award 5 Am. Rev. Int'l Arb. 9 (2004).

Last word on the Rule
Criticism have been raised against the doctrine that it stifles flexibility in the arbitral process. On the other hand, jurists also feel that the rule prevents corruption. Gary B. Born argues:
"Arbitrators are private persons, not subject to the discipline and training of a national judiciary which raises particular concerns about a continuing power to make largely unreviewable decisions affecting private parties' rights. Permitting a tribunal to remain in power, over a lengthy period of time, would deprive arbitration of many of the benefits of flexibility that the process is intended to achieve, while creating at least the potential for abuse of authority."
While Born's opinion that national judges are better trained as compared to arbitrators may not be convincing (at least in the Indian context), there is some truth in his statement on the the utility of the functus officio doctrine.

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