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ARBITRATION (Lat. arbitrari, to exami...

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Originally appearing in Volume V02, Page 327 of the 1911 Encyclopedia Britannica.
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ARBITRATION (See also:Lat. arbitrari, to examine or See also:judge) , a See also:term derived from the nomenclature of See also:Roman See also:law, and applied to an arrangement for taking, and abiding by, the See also:judgment of a selected See also:person in some disputed See also:matter, instead of carrying it to the established courts of See also:justice. In disputes between states, arbitration has See also:long played an important See also:part ('see ARBITRATION, See also:INTERNATIONAL). The See also:present See also:article is restricted to arbitration under municipal law; but a See also:separate article is also devoted to the use of arbitration in labour disputes (see ARBITRATION AND CONCILIATION). Roman Law.—Arrangements for avoiding the delay and expense of litigation, and referring a dispute to See also:friends or neutral persons, are a natural practice, of which traces may be found in any See also:state of society; but it is from Roman Law that we derive arbitration as a See also:system which has found its way into thepractice of See also:European nations in See also:general, and has even evaded the dislike of the See also:English See also:common lawyers to the See also:civil law. The See also:praetor, who had the arrangement of all trials or private suits and the formal See also:appointment of See also:judges for them, referred the See also:great See also:majority of such cases for decision to a judge who was styled usually judex but sometimes arbiter. The phrase judex arbiterve frequently occurs. The judex and the arbiter had the same functions, and apparently the only See also:express basis for the distinction between the two words is that there might be several arbitri but never more than one judex in a cause. The term arbiter seems, however, to have been sometimes used when the See also:referee had a certain degree of See also:latitude, and was en-titled to give See also:weight to equitable considerations (See also:Roby, Inst. Rom. Law,, 318; See also:Hunter, Roman Law (1897), p. 48; and see See also:Cicero See also:pro Rosc. Com.

4, SS. 10-13; See also:

Gaius, Inst. iv. s. 163). Apart from this system of compulsory reference by the praetor, Roman law recognized a voluntary reference (compromissum) to an arbiter or arbitrator by the parties themselves. The arbitrator ex compromisso sumptus had no coercive See also:jurisdiction, and in See also:order to make his See also:award effective, the agreement of reference was confirmed by a stipulation and usually provided a See also:penalty (poena, See also:petunia compromissa) in See also:case of disobedience. The sum agreed on by way of penalty might be either specific or unliquidated, e.g. " whatever the matter may be See also:worth " (Dig. iv., tit. 8, s. 28). The arbitrator ex compromisso sumptus, like the judicial arbiter, was expected to take See also:account of equitable considerations in coming to a decision. If three arbitrators were appointed, a majority could decide; in case of two being appointed and not agreeing, the praetor would compel them to choose a third (Roby, ubi sup., i. 320, 321; Dig. iv., tit.

8, s. 17). As in English law, it was necessary that the award should See also:

cover all the points submitted (Dig. iv., tit. 8, s. 21). Law of See also:England.—The law of England as to arbitration is now practically summed up in the Arbitration See also:Act of 1889. This See also:statute is an express See also:code as to proceedings in all arbitration, but " criminal proceedings by the See also:crown " cannot be referred under it (ss. 13, 14). The statute subdivides its subject-matter into two headings. I. References by consent out of See also:court; II. References under order of court.

(I) Here the first matter to be dealt with is the submission. A submission is defined as a written agreement (it need not be signed by both parties) to submit present or future See also:

differences References to arbitration, whether a particular arbitrator is by consent named in it or not. The capacity of a person to agree out of to arbitration, or to act as arbitrator, depends on the CO"rt general law of See also:contract. A submission by an See also:infant is not void, but is voidable at his See also:option (see INFANT). A counsel has a general authority to See also:deal with the conduct of an See also:action, which includes authority to refer it to arbitration, but he has no authority to refer an action against the wishes of his client, or on terms different from those which his client has sanctioned; and if he does so, the reference may be set aside, although the limit put by the client on his counsel's authority is not made known to the other See also:side when the reference is agreed upon (See also:Neale v. See also:Gordon See also:Lennox, 1902, A.C. 465). The See also:committee of a lunatic, with the See also:sanction of the judge in lunacy, may refer disputes to arbitration. As an arbitrator is chosen by the parties themselves the question of his eligibility is of comparatively See also:minor importance; and where an arbitrator has been chosen by both parties, the courts are reluctant to set the appointment aside. This question has arisen chiefly in contracts, for See also:works, which frequently contain a See also:provision that the engineer shall be the arbitrator, in any dispute between the contractor and his own employer. The See also:practical result is to make the engineer judge in his own cause. But the courts will not in such cases prevent the engineer from acting, where the contractor was aware of the facts when he signed the contract, and there is no See also:reason to believe that the engineer will be unfair (Ives and See also:Barker v.

Willans, 1894, 2 Ch. 478). Even the fact that he has expressed an See also:

opinion on matters in dispute will not of itself disqualify him (See also:Halliday v. See also:Hamilton's Trustees, 1903, 5 See also:Fraser, 800). So, too, where a See also:barrister was appointed arbitrator, the court refused to stop the arbitration on the See also:mere ground that he was the client of a See also:firm of solicitors, the conduct of one of whom was in question (See also:Bright v. ,See also:River See also:Plate Construction Co., 1900, 2 Ch. 8'35)• Under the law See also:prior to the act of 1889 (a) an agreement to refer disputes generally, without naming the arbitrators, was always irrevocable, and an action See also:lay for the See also:breach of it, although the court could not compel either of the parties to proceed under it; (b) an agreement to refer to a particular arbitrator was revocable, and if one of the parties revoked that particular arbitrator's authority he could not be compelled to submit to it; (c) when, however, the parties had got their tribunal fixed, and were proceeding to carry out the agreement to refer, the act 9 and to Will. III. c. 15 provided that the submission might be made a See also:rule of court, a provision which gave the court See also:power to assist the parties in the trial of the case, and to enforce the award of the arbitrators; (d) the statute 3 and 4 Will. IV. c. 42 (s. 39) put an end to the power to revoke the authority of a particular arbitrator after the reference to him had been made a rule of court; and—a liability which existed also under the act of 9 and to Will.

III. c. 15—any person revoking the appointment of an arbitrator after the submission had been made a rule of court might be attached. The Arbitration Act 1889 provides that a submission, unless a contrary intention is expressed in it, is irrevocable except by leave of the court or a judge, and is to have the same effect in all respects as if it had been made an order of court. The See also:

object of this enactment was to See also:save the expense of making a submission a rule of court by treating it as having been so made, and it leaves the law in this position, that while the authority of an arbitrator, once appointed, is irrevocable, there is no power—any more than there was under the old law—to compel an unwilling party to proceed to a reference, except in cases specially provided for by sections 5 and 6 of the act of 1889. The former of these sections deals with the power of the court, the latter with the power of the parties to a reference, to appoint an arbitrator in certain circumstances. See also:Section 5 provides that where a reference is to be to a single arbitrator, and all the parties do not concur in appointing one, or an appointed arbitrator refuses to act or becomes incapable of acting, or where the parties or two arbitrators fail, when necessary, to appoint an See also:umpire or third arbitrator, or such umpire or arbitrator when appointed refuses to act, or becomes incapable of acting, and the See also:default is not rectified after seven clear days' See also:notice, the court may See also:supply the vacancy. Under section 6, where a reference is to two arbitrators, one to be appointed by each party, and either the appointed arbitrator refuses to act, or becomes incapable of acting, and the party appointing him fails, after seven clear days' notice, to supply the vacancy, or such party fails, after similar notice, to make an See also:original appointment, a binding appointment (subject to the power of the court to set it aside) may be made by the other party to the reference. The court may compel parties to carry out an arbitration, not only in the above cases by directly appointing an arbitrator, &c., or by allowing one appointed by a party to proceed alone with the reference, but also indirectly by staying any proceedings before the legal tribunals to determine matters which come within the See also:scope of the arbitration. Where the agreement to refer stipulates that the submission of a dispute to arbitration shall be a See also:condition precedent to the right to bring an action in regard to it, an action does not See also:lie until the arbitration has been held and an award made, and it is usual in such cases not to apply for a stay of proceedings, but to plead the agreement as a See also:bar to the action ( Viney v. Bignold, 1887, 20 Q.B.D. 172). The court will refuse to stay proceedings where the subject-matter of the litigation falls outside the scope of the reference, or there is some serious objection to the fitness of the arbitrator, or some other See also:good reason of the See also:kind exists.

An arbitrator is not liable to be sued for want of skill or for See also:

negligence in conducting the arbitration (Pappa v. See also:Rose, 1872, L.R. 7 C.P. 525). When a See also:building contract provides that a certificate of the architect, showing the final See also:balance due to thecontractor, shall be conclusive See also:evidence of the works having been duly completed, the architect occupies the position of an arbitrator, and enjoys the same See also:immunity from liability for negligence in the See also:discharge of his functions (See also:Chambers v. Goldthorpe, 19or, r Q.B. 624). An arbitrator cannot be compelled to act unless he is a party to the submission. An arbitrator (and the following observations apply mutatis mutandis to an umpire after he has entered on his duties) has power to administer oaths to, or take the affirmations of, the parties and their witnesses; and any person who wilfully and corruptly gives false evidence before him may be prosecuted and punished for See also:perjury (Arbitration Act 1889, sched. i. and s. 22). At any See also:stage in the reference he may, and shall if he be required by the court, state in the See also:form of a See also:special case for the opinion of the court any question of law arising in the arbitration. The arbitrator may also state his award in whole or in part as a special case (lb. s.

19), and may correct in an award any clerical See also:

mistake or See also:error arising from an accidental slip or omission. The See also:costs of the reference and the award—which, under sched. i. of the act, must be in See also:writing, unless the submission otherwise provides—are in the arbitrator's discretion, and he has a See also:lien on the award and the submission for his fees, for which—if there is an express or implied promise to pay them—he can also See also:sue (Crampton v. See also:Ridley, 1887, 20 Q.B.D. 48). An arbitrator or umpire ought not, however, to state his award in such a way as to deprive the parties of their right to See also:challenge the amount charged by him for his services; and accordingly where an umpire fixed for his award a lump sum as costs, including therein his own and the arbitrators' fees, the award was remitted back to him to state how much he allotted to himself and how much to the arbitrators (in Re See also:Gilbert v. See also:Wright, 1904, 20 Times L.R. 164). But in the See also:absence of evidence to show that the fees charged by arbitrators or umpire are extortionate, or unfair and unreasonable, the courts will not interfere with them (See also:Llandrindod See also:Wells See also:Water Co. v. See also:Hawksley, 1904, 20 Times L.R. 241). If there is no express provision on the point in the submission, an award under the Arbitration Act 1889 must be made within three months after the arbitrator has entered on the reference, or been called upon to act by notice in writing from any party to the submission. The See also:time may, however, be extended by the arbitrator or by the court.

An umpire is required to make his award within one See also:

month after the original or extended time appointed for making the award of the arbitrators has expired, or any later See also:day to which he may enlarge it. The court may by order remit an award to the arbitrators or umpire for reconsideration, in which case the reconsidered award must be made within three months after the date of the order. An award must be See also:intra vires: it must dispose of all the points referred; and it must be final, except as regards certain matters of valuation, &c. (see in Re Stringer and See also:Riley See also:Brothers, 19or, 1 K.B. 105). An award may, however, be set aside where the arbitrator has misconducted himself (an arbitrator may also be removed by the court on the ground of misconduct), or where it is ultra vires, or lacks any of the other requisites—above mentioned—of a valid award, or where the arbitrator has been wilfully deceived by one of the parties, or some such state of things exists. An award may, by leave of the court, be enforced in the same manner as a judgment or See also:decree to the same effect. Under the See also:Revenue Act 1906, s. 9, a See also:uniform See also:duty of ten shillings is payable on awards in England or See also:Ireland, and on decreets arbitral in See also:Scotland. Provisions for the arbitration of special classes of disputes are contained in many acts of See also:parliament, e.g. the See also:Local See also:Government Acts 1888, 1894, the Agricultural Holdings (England) Acts 1883 to 1906, the Small Holdings and Allotments Act 1907, the. See also:Light See also:Rail-ways Act 1896, the See also:Housing of the Working Classes Act 1890, the Workmen's See also:Compensation Act 1906, &c. The Conciliation Act 1896 provides machinery for the prevention and See also:settlement of See also:trade dispute:,, and in 1892 a chamber of arbitration for business disputes was established by the See also:joint action of the See also:corporation of the See also:city of See also:London and the London chamber of See also:commerce.

At the time when the London chamber of arbitration 326 was established, there was considerable dissatisfaction among the See also:

mercantile community with the delays that occurred in the disposal of commercial cases before the See also:ordinary tribunals. But the special provision made by the judges in 1895 for the prompt trial of commercial causes to a large extent destroyed the raison d'etre of the chamber of arbitration, and it did not attain any great measure of success. (2) The court or a judge may refer any question arising in any cause or matter to an See also:official or special referee, whose References See also:report may be enforced like a judgment or order to under the same effect. This power may be exercised whether order of the parties See also:desire it or not. The official referees are court salaried See also:officers of court. The remuneration of special referees is determined by the court or judge. An entire action may be referred, if all parties consent, or if it involves any pro-longed examination of documents, or scientific or local examination, or consists wholly or partly of matters of account. Scots Law.—The Arbitration (Scotland) Act 1894, unlike the English Arbitration Act 1889, did not codify the previously existing law, and it becomes necessary, therefore, to deal with that law in some detail. It differs in important particulars from the law of England. Although (as in England apart from the Arbitration Act 1889) there is nothing to prevent a verbal reference, submissions are generally not merely written but are effected by See also:deed. The deed of submission first defines the terms of the. reference, the name or names of the arbiters or arbitrators, and the " oversman " or umpire, whose decision in the event of the arbiters differing in opinion is to be final. Formerly, where no oversman was named in the sub-See also:mission, and no power given to the arbiters to name one, the proceedings were abortive if the arbiters disagreed, unless the parties consented to a nomination.

But under the Arbitration (Scotland) Act 1894, s. 4, where arbiters differ in opinion, they, or, if they fail to agree on the point, the court, on the application of either party, may nominate an oversman whose decision is to be final. The deed of submission next gives to the arbiters the necessary See also:

powers for disposing of the matters referred (e.g. powers to summon witnesses, to administer oaths and to award expenses), and specifies the time within which the " decreet arbitral " is to be pronounced. If this date is See also:left See also:blank, practice has limited the arbiter's power of deciding to a See also:year and a day, unless, having express or clearly implied power in the submission, he exercises this power, or the parties expressly or tacitly agree to its See also:prorogation. The deed of submission then goes on to provide that the parties bind themselves, under a stipulated penalty to abide by the decreet arbitral, that, in the event of the See also:death of either of them, the submission shall continue in force against their heirs and representatives, and that they consent to the See also:registration, for preservation and See also:execution, both of the deed itself and of the decreet arbitral. The power to enforce the award depends on this last provision. Under the common law of Scotland; a sub-mission of future disputes or differences to an arbiter, or arbiters, unnamed, was ineffectual except where the agreement to refer did not contemplate the decision of proper disputes between the parties but the See also:adjustment of some condition, or the See also:liquidation of some See also:obligation, contained in the contract of which the agreement to submit formed a part. And by the Arbitration (Scotland) Act 1894, s. 1, an agreement to refer to arbitration is not invalid by reason of the reference being to a person not named, or to be named by another, or to a person merely described as the holder for the time being of any See also:office or appointment. An arbiter who has accepted office may be compelled by an action in court of session to proceed with his duty unless he has sufficient cause, such as See also:ill-See also:health or supervening See also:interest, for renouncing. The court may name a See also:sole arbiter, where provision is made for one only and the parties cannot agree (Arbitration [Scotland] Act 1894, s. 2) ; and may name an arbiter where a party having the right or duty to nominate one of two arbiters will not exercise it (ib. s.

3). Scots law as to the requisites of a valid award is practically identical with the law of England. The grounds of reduction of a decreet arbitral are "corruption," "See also:

bribery," " false hold " (Scots Act of Regulations 1695, s. 25). An See also:attempt was made to include, under the expression " constructive corruption," among these statutory grounds of reduction, irregular conduct on the part of an arbitrator, with no See also:suggestion of any corrupt See also:motive. But it was definitely overruled by the See also:House of Lords (See also:Adams v. Great See also:North of Scotland Railway Co., 1891, A.C. 31). The statutory See also:definition of the grounds of reduction was intended, however, merely to put an end to the practice which had previously obtained of reviewing awards on their merits, and it does not prevent the courts from setting aside an award where the arbitrator has exceeded his jurisdiction, or disregarded any one of the expressed conditions of the submission, or been guilty of misconduct. A private arbiter cannot demand remuneration except in virtue of contract, or by implication from the nature of the See also:work done, or if the reference is in pursuance of some statutory enactment (e.g. the Lands Clauses [Scotland] Act 1845, s. 32). Judicial References have been long known to the law of Scotland. when an action is in court the parties may at any stage withdrawit from judicial determination, and refer it to arbitration.

This is done by See also:

minute of reference to which the court interpones its authority. When the award is issued it becomes the judgment of the court. The court has no power to compel parties to enter into a reference of this kind, and it is doubtful whether counsel can bind their clients in such a matter. A judicial reference falls like the other by the elapse of a year; and the court cannot See also:review the award on the ground of See also:miscarriage. By the Court of Session Act 1850, s. 50, a provision is introduced whereby parties to an action in the supreme court may refer judicially any issue for trial to one, three, five or seven persons, who shall sit as a See also:jury, and decide by a majority. Law of Ireland.—The Common Law See also:Procedure Act (Ireland) 1856, which is incorporated by s. 6o of the Supreme Court of Judicature Act (Ireland) 1877, and thereby made applicable to all divisions of the High Court of Justice, provides, on the lines of the English Common Law Procedure Act 1854, for the conduct of arbitrations and the enforcement of awards. Irish statute law, like that of England and Scotland, contains numerous provisions for arbitration under special enactments. See also:Indian and Colonial Law.—The provisions of the English Arbitration Act 1889 have in substance been adopted by the Indian Legislature (see Act ix. of 1899), and by many of the colonies (see, e.g., Act No. 13 of 1895, Western See also:Australia; No. 24 of 1898, See also:Natal; c.

20 of 1899, See also:

Bahamas; No. io of 1895, See also:Gibraltar; No. 29 of 1898, Cape of Good See also:Hope: s. 7 of this last statute excludes from submission to arbitration criminal cases, so far as See also:prosecution and See also:punishment are concerned, and, without the special leave of the court, matters See also:relating to status, matrimonial causes, and matters affecting minors or other perons under legal See also:disability; See also:Trinidad and See also:Tobago, No. 35 of 1898). See also:United States.—The common law and statute law of the United States as to arbitration See also:bear a general resemblance to the law of England. All controversies of a civil nature, and any question of See also:personal injury on which a suit for See also:damages will lie, although it may also be indictable, may be referred to arbitration; but crimes, and perhaps actions on penal statutes by common informers may not. The submission may be effected sometimes by parol, sometimes by written See also:instrument, sometimes by deed or deed See also:poll. Capacity to refer depends on the general law of contractual capacity. The law of England as to the capacity to act as an arbitrator and as to objections to an arbitrator on the ground of interest has been closely followed by the See also:American courts. The same observation applies as to the requisites of an award, the mode of its enforcement and the grounds on which it will be set aside. The arbitrator has a lien on the award for his fees; and—a point of difference from the English law—he may sue for them without an express promise to pay (cf. Goodall v.

Cooley, 1854, 29 New Hamp. 48). At common law, a submission is generally revocable at any time before award; and it is also, in the absence of stipulation to the contrary, revoked by the death of one of the parties. Provision has been made in See also:

Pennsylvania for compulsory arbitration by an act of the 16th of See also:June 1836 (see See also:Pepper and See also:Lewis, Pennsylvania See also:Digest, tit. " arbitration "). The rules of court also of many of the states of the United States provide for reference through the intervention of the court at any stage in the progress of a litigation. References f Such submissions are usually declared irrevocable by co r. o the rules providing for them. In addition to voluntary submissions and references by rules of court there are in See also:America, as in the United See also:Kingdom, various statutes which provide for arbitration in particular cases. Most of these statutes are founded on the 9 and ro Will. III., c. 15, and 3 and 4 Will. IV. c.

42, s. 49, " by which it is allowed to refer a matter in dispute (not then in court) to arbitrators, and agree that the submission be made a rule of court. This agreement, being proved on the See also:

oath of one of the witnesses thereto, is enforced as if it had been made at first a rule of court" (See also:Bouvier, Law Dict. s.v. "Arbitration"). Ample provision is made in America for the arbitration of labour disputes. Law of See also:France.—Voluntary arbitration has always been recognized in France. In cases of mercantile partnerships, arbitration was formerly compulsory; but in 1856 (law of the 17th of See also:July 1856) jurisdiction in disputes between parties was conferred on the Tribunals of Commerce (as to which see Code de Commerce, arts. Voluntary sub- See also:missions. Statutory arbitrations. 615 et seq.), and arbitration at the present time is purely voluntary. The subject is very fully dealt with in the Code de Procedure Civile (arts. 1003-1028).

The submission to arbitration (compromis) must, on See also:

pain of nullity, be acted upon within three months from its date (See also:art. 1007). The submission terminates (i.) by the death, refusal, resignation or inability to act of one of the arbitrators; (ii.) by the expiration of the See also:period agreed upon, or of three months if no time had been fixed; (iii.) by the disagreement of two arbitrators, unless power be reserved to them to appoint an umpire (art. 1012). An arbitrator cannot resign if he has once commenced to act, and can only be relieved on some ground arising subsequently to the sub-mission (art. 1014). Each party to the arbitration is required to produce his evidence at least fifteen days before the expiration of the period fixed by the submission (art. 1016). If the arbitrators, differing in opinion, cannot agree upon an umpire (tiers arbitre), the See also:president of the Tribunal of Commerce will appoint one, on the application of either party (art. 1017). The umpire is required to give his decision within one month of his See also:acceptance of the appointment; before making his award, he must confer with the previous arbitrators who disagreed (art. 1018).

Arbitrators and umpire must proceed according to the ordinary rules of law, unless they are specially empowered by the submission to proceed as amiables compositeurs (art. 1019). The award is rendered executory by an order of the president of the Civil Tribunal of First Instance (art. 1020). Awards cannot be set up against third parties (art. 1022), or attacked by way of opposition. An See also:

appeal against an award lies to the Civil Tribunal of First Instance, or to the court of appeal, according as the subject-matter, in the absence of arbitration, would have been within the jurisdiction of the justice of the See also:peace, or of the Civil Tribunal of First Instance (art. 1023). In the manufacturing towns of France, there are also boards of umpires (Conseils de Prud'hommes) to deal with trade disputes between masters and workmen belonging to certain specified trades. Other See also:Foreign See also:Laws.—The provisions of See also:French law as to arbitration are in force in See also:Belgium (Code de Proc. Civ., arts. 1003 et seq.); and a See also:convention (8th of July 1899) between France and Belgium regulates, inter alia, the mutual enforcement of awards.

The law of France has also been reproduced in substance in the See also:

Netherlands (Code of Civil Procedure, arts. 62o et seq.). The See also:German Imperial Code of Procedure did not create any system of arbitration in civil cases. But this omission was supplied in See also:Prussia by a law of the 29th of See also:March 1879, which provided for the appointment, in each See also:commune, of an arbitrator (Schiedsmann) before whom conciliation proceedings in contentious matters might be conducted. The procedure was gratuitous and voluntary; and the functions of the arbitrator were not judicial; he merely recorded the arrangement arrived at, or the refusal of conciliation. This law was followed in See also:Brunswick by a law of the 2nd of July 1896, and in See also:Baden by a law of the 16th of See also:April 1886. In See also:Luxemburg, compulsory arbitration in matters affecting commercial partnerships was abolished in 1879 (law of the 16th of April 1879). A system of conciliation, similar to the Prussian. exists in See also:Italy (laws of the 16th of June 1892, and the 26th of See also:December 1892) and in some of the Swiss cantons (law of the 29th of April 1883). See also:Spain (Code of Civil Proc., arts. 1003-1028; Civil Code, arts. 1820-1821) and See also:Sweden and See also:Norway (law of the 28th of See also:October 1887) have followed the French law. In See also:Portugal, provision has been made for the creation in important See also:industrial centres, on the application of the administrative corporations, of boards of conciliation (decrees of the 14th of See also:August 1889, and the 18th of May 1893).

cited, and the Annuaire de legislation etrangere. (A. W.

End of Article: ARBITRATION (Lat. arbitrari, to examine or judge)

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