' The instant F.A.O. Has been directed against the order dated 4-4-2000 passed by Civil Judge 1st Class, Rawalpindi dismissing the petition of the appellant filed under section 14(2) read with section 17 of the Arbitration Act to make the award as rule of the Court.
2. Facts giving rise to the present F.A.O. Are to the effect that the appellant had entered into an agreement with the respondent for the execution of the work laying of cable in street light on the road from G.P.O. To Water Tank in Murree and work order had been issued by the respondent to the appellant vide Work Order No,97 dated 24-7-1989. The project was to be completed by the appellant within a stipulated period of 30 days and according to the instructions of the Engineer Incharge, the appellant had completed the work to the satisfaction of the Engineer and after the completion of the Project, the Chairman, Municipal Committee vide a letter No,129-G dated 18-6- 1990 directed the appellant to remove the cable and lay the cable approved by the consultant, as a result of which, the appellant had completed the demand of the Municipal Committee, replaced the cables and sustained a huge loss. The appellant had applied to the Municipal Committee/respondent for compensation of the loss. His request was declined by the respondent.
Therefore, he invoked the Arbitration Clause No,24 of the agreement before the Superintending Engineer Of the Local Government for arbitration and settlement of the dispute of compensation of loss caused to the appellant by the respondent. The Arbitrator, Superintending Engineering, Local Government and Rural Development Punjab, Lahore issued notice to the respondent who filed objections denying the claim of the appellant wherein, the respondent had taken the stand that the standard of the cable was specifically provided in the estimate as well as in the work order and the firm/appellant was to lay the cable manufactured by the following firms:--
(i) Pak Cable. (ii) Newage. (iii) Pioneer. (iv) Golden.
' And further averred that the consultant Messrs Shaheen Engineering Corporation had no authority to change the specification and the contractor/appellant had deliberately laid down the cable manufactured by a firm which was not specified in the estimate. Being substandard material/cable, it was not accepted and the appellant was directed to replace the same. The contractor had sufficient choice to provide cable of specified firms. Contractor took shelter of the consultant just to provide substandard material for undue profiteering.
3. The Arbitrator after hearing the objections of the parties and affording an opportunity to adduce their evidence oral as well as documentary in support of their respective contentions passed the award in favour of the appellant. One of the claim of the appellant was that the respondent withheld his security in spite of the expiry of specified period.
4. The appellant after the announcement of the award by the Arbitrator filed an application under section 14(2) read with section 17 of the Arbitration Act to make the award as rule of the Court. The process was issued by the Court to the respondent who contested the application filed by the appellant and filed objections against the award. The. Court after recording the evidence of the parties vide its order dated 31-10-1995 made the award dated 17-7-1993 as rule of the Court to the extent of appellant's claim No,5 only. With regard to the other claims, the Court rejected the award.
Feeling aggrieved, the appellant filed a F.A.O. No,80 of 1995 which was heard by a learned Single Judge of this Court who vide his judgment dated 3-11-1996 accepted the appeal set aside the order dated 31-10-1995 of the trial Court, remanded the case for decision afresh. After the remand of the case, the learned trial Court passed the impugned order dated 4-4-2000 rejecting the application filed by the petitioner and accepting the objection petition of the respondent. This order has been impugned now.
5. The learned counsel for the appellant contended that the trial Court while examining the legality of the award has acted as a Court of appeal and reappraised the evidence recorded by the Arbitrator. Further contended that law leans in favour of upholding the award and not vitiate the same. He relied on cases of Ashfaq Ali Qureshi v. Municipal Corporation, Multan and another 1984 SCMR 597, Lahore Development Authority v. Messrs Khalid Javed & Co. 1983 SCMR 718, Zaka Ullah Khan v. Government of Pakistan through Secretary, Building and Roads Department, Lahore PLD 1998 Lah. 132 and Messrs Alpha Insurance Co. Limited v. Messrs Ch. Nizam Din & Sons and another 2001 CLC 289.
6. On the other hand, the learned counsel for the respondent. Vehemently opposed the arguments of the learned counsel for the appellant and supported the order of the trial Court contending that Arbitrators deciding disputed question of fact must go into evidence when nature of dispute requires and without recording the evidence, the decision of the Arbitrator is an illegal which vitiates award. He relied on the case of Amin Jute Baling Co. Limited v. Aminpur Union Cooperative Multipurpose Society Ltd. PLD 1961 Dacca 102.
7. I have heard the arguments of the learned counsel for the parties and perused the record.
8. The case of the appellant is that the cable manufactured by the specified firm in the estimation at the time of completion of the work was not available and the appellant had informed the Municipal Engineer and who vide, a letter dated 29-7-1989 in response to the letter of the appellant dated 27-7-1989 had directed the appellant and changed the specification in whose direction, the appellant had laid the cable. The relevant letter issued by the Shaheen Engineering Corporation, the consultant of the respondent is reproduced as under:-- "Subject: Laying of cable. Dear Sir, ' Reference to your Letter No, S.M.I./87081/89-7, dated 27-7-1989, though you have not submitted the supporting documents from any manufacturer, but on the basis of our own enquiry from the listed Manufacturers hereby allow you to purchase the cable from any other Manufacturer of repute. The cable should be of the standard to meet with as specified in the clause (13) of the Specifications as mentioned in the Tender Document, which reads:--
13. Cables
(i) The cable shall be copper conductor, single or multicore as indicated in the bill of quantities and shown on drawing.
(ii) The cable shall be of 600/1000 volts grade.
(iii) PVC insulated and PVC sheathed. The thickness of PVC insulation and sheath shall confirm to BS 6748:1976 and manufactured in accordance with BS 6346:69.
(iv) The conductor shall be stranded plain anealed copper wire of high conductivity complying with BS 6360:1969.
' Hope the abovementioned specifications shall be strictly observed and quality of cable be maintained throughout the contract.
' This approval stands only for the one contract awarded to you so far vide Work Order No,97, dated 24-7-1989 issued by the Municipal Committee, Murree.
' Thanking you. Yours faithfully, for Shaheed Engineering Corporation."
9. The ,respondents had produced Naveed Ahmad R.W.1 and Shakil Anjum, R.W.2. Both the witnesses were the employees of the Municipal Committee, Murree. R.W.2 had admitted in his cross- examination that the consultant had issued a letter Mark "C" to the Chairman, Municipal Committee, Murree and the same was replied by the Chairman to the consultant through letter Mark "D". He also admitted that after the approval, the cable was removed. It has also been admitted that respondent participated in the arbitration proceedings and no objection against the proceedings of the arbitration was raised before any authority. The R.W.2 also admitted that Arbitrator had not made any hurdle in their way.
10. It is admitted fact that there is an arbitration clause in the agreement. The relevant clause (24) with regard to the arbitration is reproduced as under:-- "Clause 24. Except where otherwise specified in the contract, the decision of the Superintending Engineering of the Circle of the Building and Roads Branch of the Public Work Department for the time being shall be final, conclusive and binding on all parties to the contract upon all questions relating to the meaning of the specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship, or materials used on the work or as to any other question, claim, right, matter, or thing whatsoever, in any way arising out of, or relating to the contract, designs, drawings, specifications, estimates,\ instructions, order or these conditions, or otherwise concerning the works, or the execution of failure to execute the same, whether arising during the progress of the work, or after the completion or abandonment, thereof of, the contract by the contractor shall be final conclusive and binding on the contractor.
11. In view of the arbitration clause reproduced above, it is manifestly clear that the S.E. Building was appointed as sole Arbitrator but vide modification dated 2-10-1991, the Superintending Engineer, Local Government and Rural Development, Punjab, Lahore was nominated as the Arbitrator. The Arbitrator from the evidence of the parties found that there was a chain of correspondence on the record showing the appointment of the consultant by the Municipal Committee. The Arbitrator had also observed that before laying of cables, other than specified on the work order, got tested by the consultant thrice and after having satisfied, the Contractor was allowed to lay the cable which was laid under the supervision of the Committee and remained intact till such time when it was ordered to be replaced by new one. Resultantly, the contractor was forced to suffer losses by replacing the cable.
12. The main stress of the respondent before the Arbitrator and before the learned Civil Judge was that Shaheen Engineering Corporation have not been engaged by the respondent as a Consultant.
Their stand is belied from letter Mark-C which was written by the Consultant Shaheen Engineering Corporation to the Chairman, Municipal Committee; Murree which is reproduced as under:-- "Subject: Testing of cable 19/083 two core PVC/PVC 600/1000V .
' Dear Sir, ' Please find enclosed herewith the test result/laboratory report for the subject mentioned cable, laid at Bank Road, Murree, by Messrs S.M.I. Brothers (Pvt.) Ltd., Lahore.
'As per laboratory report the results are satisfactory. For reference we have already sent you the requirements of the standard required alongwith the reports of Hall Road and View Forth Road, Murree.
' Thanking you and assuring you our best of cooperation at all the times.
' Yours faithfully, ' For Shaheen Engineering Corporation."
' Mark-D is another letter dated 15-1-1990 written by the Chairman, Municipal Committee, Murree to the appellant wherein it is admitted that the Shaheen Engineering Corporation was the Consultant of the respondent. Another letter dated 10th May, 1990 issued by Shaheen Engineering Corporation to the Central Testing Laboratories, Lahore with regard to the testing of L.T. Cable 'size 19/083-two core, PVC/PVC Flote, 600/1000 Volts Grade. For ready reference, the same is also reproduced are as under:-- ' Subject Testing of L.T. Cable Size 19/083-two core, PVC/PVC Flot 600/1000 volts grade.
' Dear Sir, ' We are sending herewith a sealed sample of subject mentioned cable, sample is 20 meters in length, for following tests;
(1) High voltage test at 300D volts to prove 600/1000 volts grade.
(2) PVC insulation and sheath thickness.
(c) Conductor stranded plain anealed copper size and No, conducto Rs, ' We being the honourary Consultants have received samples from our client Murree Municipal Committee for test and approval. The samples bears the identification mark: "Bank Road Murree".
' The work executed by Mess Rs, S.M.I. Brothers (Pvt.) Ltd., Lahore.
' The testing fee whatsoever shall be paid by our representative, the bearer of this letter and sample.
' Requesting you for an early action in this regard and thanking you.
' Yours faithfully, ' For Shaheen Engineering Corporation."
13. The series of letters and correspondence is sufficient to infer that the Shaheen Engineering Corporation had been employed by the Municipal Corporation, Murree as its Consultant. No one on behalf of respondent has entered appearance before the trial Court to state that the payment of amount of bills to the appellant was verified by him or that he had checked the standard of work at site. The Site Engineer has not been produced by the respondent to establish the fact that the Shaheen Engineering Corporation was not the Consultant or the Site Engineer engaged by the respondent. The respondent had not denied the fact that the payment to the appellant against his running bills were made on the test report by the Site Engineer, Shaheen Engineering Corporation.
From the perusal of the letter written by the Chairman Municipal Committee, Murree, (Mark-D) to the appellant, it reveals that the Shaheen Engineering' Corporation has been engaged by the respondent as a Consultant. Therefore, according to the contract, the specification could be changed by the Site Engineer and no other. Site Engineer the Consultant was deputed by the respondent for checking the project given to the appellant. The test report was also obtained from the Test Laboratory through the Consultant Shaheen Engineering Corporation. It is very strange that if the Shaheen Engineering Corporation, the Consultant of the respondent was not the 'Site Engineer then who was the Site Engineer at the site. R.W.2 has admitted in his cross-examination that he is not an Electrical Engineer.
14. During the arbitration proceedings, the respondent/Municipal Committee, Murree or his representative has not raised any objection on the conduct and manner of the Arbitrator. It is admitted from the statement of R.W.1 that they have fought their case vehemently before the Arbitrator who after hearing and recording the evidence produced by the respondent had passed the award.
15. Subsection (2) of section 14 of the Arbitration Act, reveals that the Court at the request of any of the party to the arbitration agreement or any person claiming user such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award.
Section 17 of the Act had further provided that where the Court sees no cause to remit the award or any of the matters referred to arbitration for consideration or to set aside the award, the Court shall, after the time of making an application to set aside the award has expired, or such application having been made. After refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess, of, or not otherwise in accordance with the award.
16. Now the question arise as to whether the Civil Court was competent to set aside the award.
Making, award rule of the Court, the Court has to examine the validity of award to be carefully examined within a limited scope and from contents Of award itself, without going deeply through evidence recorded by Arbitrator or undertaking reappraisal thereof to discover any error or infirmity in the award if it was intended to ascertain whether any error was apparent on the face of award or that any intentional disregard of law had taken place, every reasonable and lucid intendment should be rendered as far as possible, in favour of the award rather then in vitiating the. Same --- Arbitrator being forum of first instance to appraise evidence his finding need not be set aside simply on basis of meritless formal objection. Reference in this context can be made to the case of Altaf Hussain v. Duty Free Shop (Pvt.) Limited 2000 YLR 2021.
17. The Arbitrator Judge of all matters arising in dispute whether of facts or law---Court not to act as a Court of appeal sitting in judgment over award and not to proceed to scrutinize award in order only to discover an error for purpose of setting it aside --- Error must be apparent on face of award and not latent. An award can be set aside on one of the following grounds:-
(i) - that an Arbitrator or umpire has misconducted himself;
(ii) that an Arbitrator or umpire has misconducted the proceedings;
(iii) that the award is made after the proceedings had become invalid under section 35;
(iv) that the award is made after the award is superseded; .(v) that the award is improperly procured; and (vi) that the award is otherwise invalid.
' The learned counsel for the respondent has not been able to bring its case in any of the above standard laid down by the apex Court in case of Ashfaq Ali Qureshi v. Municipal Corporation, Multan (supra).
18. The Arbitration is a settlement of controversies/disputes by one or more persons chosen by the parties themselves. The person so chosen are known as Arbitrator/Arbitrators/Umpires. The object of the arbitration proceedings is to curtail period of litigation to encourage resolution of conflict through Judges of their own choice; that Arbitrators are not strictly bound by rules of technicalities embodied in Procedural Laws as well as Qanun-e-Shahadat/Evidence Act; that the Courts are given role to see that these Judges decide causes strictly in accordance with law, in exercise of their supervisory power contained in sections 14 to 17, and sections 30 and 33 of the Arbitration Act.
Thus, it is clear that the role of the Courts, in the scheme of Arbitration Act is of supervisory character and is not akin to appellant power under the Code of Civil Procedure.
19. In a very famous case titled as Champsey Bhara & Co. v. Jivraj Balloo Spinning and Weaving Company Ltd. AIR 1923 PC 66, it has been held that:-- "Where a cause of matters in difference is referred to an arbitrator, whether a lawyer or a layman, he is constituted the sole and final Judge of all questions both of law and of fact. The only exception to that rule are cases where the award is the result of corruption or fraud and one other, which though it is to be regretted is now firmly established viz. Where the question of law necessarily arises on the face of the award or upon some paper accompanying and forming part of the'award. An error in law on the face of the award means that you can find in the award or a document actually incorporated thereto as for instance, a note appended by the Arbitrator stating the reasons for his judgment some legal proposition which is the bases of the award and which you can then say is erroneous."
' This. View was further affirmed in the case of Saleh Mahmood Dossal v. Seth Nathoomal AIR 1927 PC 164; and this view has been followed in case of Suleman Haji Muhammad & Co. v. State Bank of Pakistan PLD 1960 (W.P.) Kar. 78 and has observed in case of Ashfaq Ali Qureshi v. Municipal Corporation, Multan and another 1985 SCMR 597.
20. The law would lean in favour of upholding of award and not vitiate the same which has followed in case of Zaka Ullah Khan v. Government of Pakistan (supra) and Messrs Alpha Insurance Co.
Limited v. Messrs Ch. Nizam Din & Sons and another (supra).
21. The contractor/appellant claimed compensation for loss caused by replacement of the cable, was referred to the Arbitrator, who found that the replacement of cable under the direction of the respondent had caused loss to the Contractor and that the Messrs Shaheen Engineering Corporation was the Consultant of the respondent. Therefore, he after hearing the objections of the respondents and recording his oral as well as documentary evidence, passed the award in favour of the appellant. The trial Court while setting aside the award has not taken into consideration the above settled proposition of law laid down by the superior Courts and passed the order in violation of settled provisions under sections 14(2), 17, 30 and 33 of the Arbitration Act.
22. In view of the above discussion, the order passed by the learned Senior Civil Judge, Rawalpindi calls for interference. Resultantly, this F.A.O. Is accepted and the order dated 4-4-2000 passed by the trial Court is set aside and the application filed by the appellant under sections 14(2) and 17 of the Arbitration Act is accepted and the objection filed by the respondent is dismissed and the award passed by Arbitrator S.E. Engineering Local Government and Rural Development, dated 17-7- 1993 is made rule of the Court.