Judgement Appeal from a decree of the High Court (December 7, 1908) reversing an order of Davar J. (January 23, 1908) which had dismissed the respondents petition. By their petition, which was filed on December 7, 1907, under the circumstances stated in their Lordships judgment, the nineteen companies which had granted policies of fire insurance to the appellant applied to the High Court under s. 5 of the Indian Arbitration Act, 1889, for leave to revoke the submission of the parties to arbitration as to the amount due thereunder in consequence of a recent fire, on the grounds that the arbitrators had wrongly decided to admit evidence which was irrelevant and inadmissible, and that it was not open to the appellant to claim in the arbitration damages for negligence by the companies ; alternatively, they prayed (and this alternative was mainly pressed) the Court to direct the arbitrators that they had erred in law in their ruling and to intimate to the arbitrators the course which they ought to pursue. The said evidence related to the damage done by water to the machinery insured. It was contended on behalf of the appellant that the damage done to the machinery was due principally (if not entirely) to the wetting of the different parts by the water used to extinguish the fire, the insurance companies, though in possession of the salvage from October 16, 1906 (i.e., two days after the occurrence of the fire), having taken no adequate steps Law Rep. 40 Ind. App. 10 ( 1912- 1913) Ahmedbhoy Habibbhoy v. Bombay Fire and Marine 141 to dry or clean the parts affected. The evidence recorded by the arbitrators also went to shew that it was customary in Bombay for the insurance companies in such cases to clean the machinery, and that their agents had in this particular case done some cleaning, though (as it would appear) not sufficient to prevent the damage for which the appellant sought to hold them liable. Counsel for the companies admitted that the original wetting of the machinery was a cause of damage arising out of the fire, but he contended that rusting through not cleaning or for other reasons was not a result of the fire, the fire being only an indirect cause. Counsel for the companies admitted that the original wetting of the machinery was a cause of damage arising out of the fire, but he contended that rusting through not cleaning or for other reasons was not a result of the fire, the fire being only an indirect cause. The decision of the arbitrators was as follows " Without in any way deciding the question as to whether or not any and if so what consequential damages could be awarded to the claimant under the contract of assurance, we hold that evidence of the nature offered to be produced on behalf of the claimants and objected to by Mr. Chamier on behalf of the companies, is allowable for the purposes of the subject-matter of this reference. We think that it is open to the claimant to contend that under the policy the companies did take possession and that they were bound to protect and clean the machinery." Davar J. dismissed the petition, his principal reason being that so far the arbitrators had decided nothing, and that the evidence provisionally admitted might be good and relevant evidence on some question within the scope of their reference. This order was reversed on the appeal of only one of the nineteen companies concerned, the High Court holding that the jurisdiction of the arbitrators extended only to the dispute relating to loss or damage from fire under the terms of the policy of insurance in each case, and not to the question of any loss or damage alleged to have arisen from the neglect of the insurance companies to take care of the machinery after the fire had been extinguished and the companies had entered into possession. The material passage in the judgment of Chandavarkar J. is as follows " In construing the agreement to refer to arbitration we ought to bear in mind one cardinal principle, namely, that by a submission to arbitration a party deprives himself of the right accorded to him by common law to have the dispute to which the submission relates decided by a Court of law. Therefore it must clearly appear from the terms of the submission that with reference to any point the party has so deprived himself. Therefore it must clearly appear from the terms of the submission that with reference to any point the party has so deprived himself. Here the dispute referred relates to damage or loss from fire, whereas the claim on which the arbitrators were asked to adjudicate and which they have held they have jurisdiction to decide in addition to the loss or damage from fire is the loss or damage consequent on the tortious conduct of the insurance companies after the fire had been extinguished. Mr. Inverarity has before us attempted to shew that what his client wants to do before the arbitrators is to prove that this latter loss is also and in substance loss from fire. But that was not the case made before the arbitrators, and I do not think that the loss alleged can be included in loss from fire on any reasonable view of the case, because the deterioration of machinery from neglect on the part of the insurance companies to take care of it is not an inevitable or direct consequence of the mischief by fire. It is only where mischief arises from fire in fire insurance cases, and from perils of the sea in maritime insurance, and the natural and almost inevitable consequence of that mischief is to create further mischievous results that underwriters become responsible for the further mischief so incurred. (See Pollock C.B. in Montoya v. London Assurance Co. (( 1851) 6 Ex. 451, 458.))" Atkin, K.C., and Lowndes, for the appellant, contended that this ruling was erroneous. The arbitrators had not at the date of the petition come to any decision upon the questions referred by which the respondent company was or could ultimately be materially prejudiced. They had merely admitted certain evidence relating to the damage suffered by the machinery. After the Law Rep. 40 Ind. App. 10 ( 1912- 1913) Ahmedbhoy Habibbhoy v. Bombay Fire and Marine 142 submission to arbitration the arbitrators alone had jurisdiction to determine whether the appellant was entitled to recover any damages, and, if so, what was the amount recoverable in respect of the particular damage alleged by him. That was within their province to decide, and the first Court was right in leaving the decision to them. The Appellate Court erred in deciding a point which was necessarily included in the reference. That was within their province to decide, and the first Court was right in leaving the decision to them. The Appellate Court erred in deciding a point which was necessarily included in the reference. The arbitrators are not shewn to have erred in any way see Falkingham v. Victoria Hail ways Commissioner. ([ 1900] A. C. 452, 464.) As regards revoking the submission made and acted upon reference was made to Act IX. of 1899, ss. 5 and 10, and to the Courts exercise of discretion upon such a matter see S.S. Den of Airlie Co. v. Mitsui & Co. (( 1912) 17 Commercial Cases, 116, 129.) It did not appear in this case that any failure of justice would result from the course taken and proposed by the arbitrators. The amount of damage done by fire cannot be ascertained at the moment of extinguishing the fire. Whatever damage was done to the machinery was by the water employed, and if it was increased thereafter owing to any negligence on the part of any one it is sufficient proof of the respondents liability that they took possession thereof under a clause in the policy, and it was entirely their own business to take all necessary steps to minimize their loss. Sir A. Cripps, K.C., and II. A. McCardie, for the respondents, contended that the High Court had rightly exercised its discretion in the order made. The arbitrators had in fact exceeded their jurisdiction and enlarged the scope of the reference, and the High Court was right in directing them to that effect. All that the companies contended for was that the claim for consequential damage owing to alleged negligence after the fire and after the loss occasioned by the fire had occurred was not within the submission to arbitration, but any claim tothat effect could be prosecuted by a separate action in the High Court. On the construction of the policies in question, the only question upon which it was provided that arbitration should take place was the amount of the appellants loss or damage by fire, and it was contended that on the letters and alterations in the draft submission, all of which were in evidence before the arbitrators and the Courts below, the appellant had agreed not to raise in the arbitration the questions of consequential loss and damage which he nevertheless put forward. Deterioration of the machinery caused by the negligence alleged by the appellant could not be regarded as loss by fire. It was contended that the Court had rightly exercised its discretion and that its exercise thereof would not be interfered with in appeal. Atkin, K.C., in reply. The judgment of their Lordships was delivered by LORD MOULTON. This appeal relates to certain arbitration proceedings instituted for the purpose of ascertaining the amount due to the appellant under fire policies taken out by him with the respondent company and eighteen other companies upon a cotton mill in Bombay known as Victory Mill. The facts of the case are very simple and may be briefly stated as follows. A fire broke out in the Victory Mill on October 14, 1906, and did very extensive damage. Immediately after the fire the appellant gave notice of his claim to the insurance companies, and they took possession of the premises under powers reserved to them in that behalf and retained possession for a considerable period for salvage purposes, during which time they sold and realized certain salvaged property. Possession of the premises was ultimately given back to the appellant, who thereupon made out the amount of his claim under the policy. The companies disputed the amount of his claim, and, in accordance with the terms of the policies, the matter was referred in each case to arbitration, but as the policies were substantially in the same form a joint inquiry was held before the arbitrators, at which all the companies were represented by one counsel. Its object was to ascertain once for all the total Law Rep. 40 Ind. App. 10 ( 1912- 1913) Ahmedbhoy Habibbhoy v. Bombay Fire and Marine 143 amount of the loss from which the shares to be borne by the respective companies could immediately be deduced. In these arbitration proceedings the present appellant tendered evidence to prove that the machinery was seriously injured not only by the fire, but by the effect of the water that had been used to extinguish the fire. This evidence shewed that the injury to the machinery by the presence of the water was in its nature progressive, i.e., that it had been seriously increased by the length of time during which the water had been allowed to lie on the machinery. Counsel for the companies objected to the admission of this latter evidence. This evidence shewed that the injury to the machinery by the presence of the water was in its nature progressive, i.e., that it had been seriously increased by the length of time during which the water had been allowed to lie on the machinery. Counsel for the companies objected to the admission of this latter evidence. He admitted that damage done by the water employed to extinguish the fire came within the loss insured by the policy, but he raised the contention (to use his own words) " that the liability for damage to property ceased the moment the fire was extinguished." The question of the admission of this evidence was formally argued before the arbitrators and they decided that they would allow the evidence to be given. Thereupon the whole of the companies petitioned the High Court to revoke the submissions to arbitration on the ground that the arbitrators had exceeded their jurisdiction in admitting the evidence. The petition came on for hearing before Davar J. on January 11, 1908. The facts were not in dispute. In the argument on the hearing counsel for the insurance companies apparently treated the evidence that the injury to the machinery from the presence of the water had increased during the time that had elapsed between the fire and the delivery up of possession by the companies as being evidence that could relate solely to what was termed " a tortious act" on the part of the insurance companies, and they contended that no such question was referred to the arbitrators. On January 23, 1908, judgment was delivered. The learned judge made no order on the petition and directed the petitioners to pay the costs of the present appellant in the petition. The main ground of the judgment was that by admitting the evidence the arbitrators had decided nothing, and that there was no cause to interfere with their action. From this decision the present respondent appealed to the High Court sitting in appeal from its original civil jurisdiction. The appeal was neard by Chardavarkar and Batchelor JJ., and on December 7, 1908, judgment was delivered allowing the appeal. From this decision the present respondent appealed to the High Court sitting in appeal from its original civil jurisdiction. The appeal was neard by Chardavarkar and Batchelor JJ., and on December 7, 1908, judgment was delivered allowing the appeal. The main ground of the judgment is expressed by Batchelor J. as follows " For whereas this contract refers only to loss by fire, those damages would arise from a totally different origin, an origin which it seems to me is wholly distinct and separable from the fire, namely a neglect by the companies of some duty imposed on them after the loss by fire and water had become an accomplished fact." The order made by the High Court was of a very unusual kind; the only operative part was that it set aside the order of Davar J. and directed the present appellant to pay the costs of the petition and appeal. This was accompanied by an expression of the view of the Court on the point of law involved to which more particular reference will be made later on. But no order was made revoking the submission, the Court evidently realizing that their expression of opinion would be accepted by the arbitrators as authoritative guidance in the matter and that there was no reason to fear their not acting in accordance with it in the future conduct of the arbitration. From this order the present appeal is brought. It raises, there fore, the plain and simple issue whether the loss due to fire and water under such a policy is to be determined at the moment the fire is extinguished or when the companies give up possession of the premises to the owner after exercising the powers given to them by the policy for the purpose of enabling them to minimize the damage. It is, however, scarcely necessary that their Lordships should formally negative the contention of the companies in this respect, for it is so obviously unreasonable that the eminent counsel who appeared for them on the appeal did not attempt to support it. They confined their argument to contending that, Law Rep. 40 Ind. App. It is, however, scarcely necessary that their Lordships should formally negative the contention of the companies in this respect, for it is so obviously unreasonable that the eminent counsel who appeared for them on the appeal did not attempt to support it. They confined their argument to contending that, Law Rep. 40 Ind. App. 10 ( 1912- 1913) Ahmedbhoy Habibbhoy v. Bombay Fire and Marine 144 although the insurance companies were undoubtedly liable for the damage done by the presence of the water subsequently to the fire during the time that the premises were in their possession, the judgment appealed from was correct in law because it did not pronounce to the contrary, but only decided that no claims based on breach of duty by the companies had been referred to the arbitrators. Their Lordships are of opinion that this does not rightly represent the effect of the judgment or of the order made thereon. The effective portion of that order is a declaration of the opinion of the Court in the following words — "This Appellate Court is of the opinion that the jurisdiction of the said arbitrators extended only to the dispute relating to loss or damage from fire under the terms of the policy of insurance in each case and not to the question of any loss or damage alleged to have arisen from the neglect of the insurance companies who are parties to the above-mentioned arbitration to take care of the machinery of the respondent after the fire mentioned in the petition of the petitioners above named .... had been extinguished and the insurance companies had entered upon possession under clause 11 of the policy of insurance mentioned in the said petition." Taken in connection with the contentions of the parties it is clear that the High Court intended by this expression of opinion to direct the arbitrators that the loss must be estimated from the condition of the machinery, &c, at the moment when the fire was extinguished. Had the present appellant permitted this order of the High Court to remain un-appealed against, the arbitrators would have been bound to estimate the damages upon that erroneous footing. Had the present appellant permitted this order of the High Court to remain un-appealed against, the arbitrators would have been bound to estimate the damages upon that erroneous footing. The fundamental error in the contention of the present respondents seems to their Lordships to have arisen from a misapprehension of the position of an insurance company taking and holding possession of premises damaged by a fire under the provisions of the policy in that behalf. The provisions in virtue of which it does so are for the purpose of enabling it to minimize the damage. Inasmuch as it has to bear the loss there is no one so directly interested in doing everything that is wise for the purpose of making the best of the situation. It does so in its own interest, not because it is under a duty to the assured. Its powers are of the nature of a privilege to do that which is most for its own benefit under the circumstances so as to reduce the loss. In the present case, therefore, there is no question of tort on the part of the companies. They may have thought that it was not worth while to expend, money in drying the machinery. In this view they may have been right or wrong, but they unquestionably had full power to take the course which in fact they did take. But when they have thus taken possession of the premises and done what in their opinion was wisest to minimize the damage, they cannot say that the actual damage is not the natural and direct consequence of the fire. Their Lordships are therefore of opinion that the High Court ought to have affirmed the order of Davar J. dismissing the petition, and they will therefore humbly advise His Majesty that the appeal be allowed and that the order of Davar J. be restored, G and that the present respondents be directed to pay the costs of the appeal to the High Court and of this appeal. There have been various irregularities in procedure in connection with the various stages of the petition. There have been various irregularities in procedure in connection with the various stages of the petition. But it is not necessary to refer to them in this judgment because at the hearing of the appeal these irregularities were waived by the appellant on the terms assented to by the respondents, that the General Accident, Fire and Life Assurance Corporation, Limited, should be taken to be a respondent to the appeal so far as liability for costs is concerned.