' The petitioner filed an application in the Court of the learned Senior Civil Judge, Rawlapindi under sections 8, 14, 20 and 41 of Arbitration Act, read with section 151, C.P.C. Seeking direction to respondents Nos.1 to 3 to file an agreement in the Court for appointment of Arbitrator in accordance with clause 15 of the agreement. On 15-2-1996 separate written statements on behalf of respondents Nos.1 and 3 were filed. On 21-4-1999 the learned trial Court directed filing of agreement. On 17-5-1999, after hearing the learned counsel for the parties, it was observed that the Civil Court at Rawalpindi had no jurisdiction in the matter. Accordingly, the plaint was returned for presentation to the competent Court under the law. Thereafter, the same was filed in the Civil Courts at Islamabad on 24-5-1999.
2. On 1-7-2000 the respondents made statement through their learned counsel for appointment of Mr. Moeen Afzal, Secretary General, Ministry of Finance as arbitrator to decide controversy between the parties. Consequently, Mr. Moeen Afzal was appointed as Arbitrator.
3. On 8-11-2000 on promulgation of Ordinance No.LII of 2000, the file of this case was sent to this Court under section 31 of the Ordinance. It was accordingly registered. On 12-2-2002, a direction was issued by this Court to the Arbitrator to submit his Award in Court on13-5-2002. An extension of two months was granted for submission of Award. On 3-6-2003 the learned Arbitrator had filed his original award dated 13-7-2002 followed by amended award dated 22-8-2002. Notices were issued to the parties vide order dated 3-6-2003 in terms of section 14(2) of the Arbitration Act, 1940.
4. The petitioner on 15-8-2000 filed a petition under section 30 of the Arbitration Act, 1940 against the award, amongst others on the ground that the award announced by the arbitrator is based on misinterpretation of clause' 3 read with clause 11(d) of the sale agreement. The petitioner retained the following assets:- :--
(1) Fixed assets retained by SCCP 46.642
(2) Capital Stock items retained by SCCP1.811
(3) Stores and Spares retained by SCCP41.621
(4) Stock in Trade retained by SCCP 4.726 Total:94.800
5. The petitioner claimed adjustment of this amount in the net worth of the company in view of clause 11 (e)(i) of the agreement. The Arbitrator wrongly refused compensation for the assets against the spirit of agreement particularly clause (3) of the sale agreement. The petitioner claimed adjustment of the compensation of stock in trade, capital stocks, stores and spares retained by SCCP., the break-up of which is given as under. That the Arbitrator wrongly refused to allow adjustment; the petitioner pointed out typographical calculations, errors and omissions in the Award as under:--
(i) Against amount of Rs.6.960 million which represent provision for accrued Interest the buyer has conceded excess provision of Rs.2.053 million as has been mentioned in the Award, therefore, balance amount to be accepted in favour of buyer, works out to Rs.4,907 million and not Rs.4.672 million (conclusion para. 20 refers) as worked out hereunder:-- Rupees in million Disputed amounts 6.960 Excess provision conceded by buyer.2.053 Balance accepted in Buyer's favour4.907 (ii) Arbitrator has allowed 1/3 of the amount of provision for Contingent Liabilities of Rs.236.161 million. This works out to Rs.78.720 million while in the award it has been worked out as Rs.70 million.
(iii) In the 'Conclusion' part of the Award Para.20, following omission/errors have been found:--
(a) Para. 20(ii)--Amount accepted against IBRD Loan is to be corrected as Rs.4,907 million in the light of explanation given above.
(b) Para. 20(iii)--Adjustment of Rs.100 million ' made by Privatization Commission on account of settlement agreement with FL Smith has not been accepted by Arbitrator vide 13 but this has been omitted in 'Conclusion' part of Award and needs to be mentioned after 20 iii(a) and (b).
(c) Para. 20 (iii)-- Adjustment of Rs.143 million made by Privatization Commission by adjusting it against amount of negative movement in net worth has not been allowed by the Arbitrator to privatization Commission. This amount was not part of the total negative net worth movement of Rs.633.175 million as per audited accounts. Therefore, this amount was to be allowed in total and not on 90% basis as has been done in the Conclusion.
(d) Para. 20(iv)-- As per Para. 16, 1/3rd of the amount provision of contingent Liabilities of Rs.236.160 million has been allowed to the buyer. This works out to Rs.78.720 million while in the award it has been worked out as Rs.70 million which needs correction.
6. The learned counsel for the petitioner contends that the findings of arbitrator recorded in paragraph Nos.6, 7 and 8 of the Award are unreasoned, sketchy. Opposed to clause 3 of the sale agreements. No criteria has been fixed by Arbitrator for reaching to his conclusion as mentioned in paragraphs Nos.16 and 17 and that the findings of Arbitrator granting mark up at rate of Rs.16% per annum are not sustainable.
7. On the other hand, the learned counsel for the respondents controverting the arguments of the learned counsel for the petitioner forcefully urged that clause 3 of the sale agreement clearly provided that the sale shall not include the plant and machinery, land, building and structure of the old plant. The area of the old plant was cordoned off by boundary wall. As far contention of the learned counsel for the petitioner objecting interest/mark up at the rate of 16%, it was urged that paragraph No.2 of sub-clause 6 furnish complete answer, wherein it has been laid down that mark up will be payable on the outstanding amount at a rate of 16% per annum. He relies on the case of Messrs Joint Venture KG/Rist through D.P. Giesler G.M. Bongard Strasse 3,4000, Dusseldorf-30, Federal Republic of Germany, CIO 15 Shah Charagh Chambers, Lahore and 2 others v. Federation of Pakistan , through Secretary Food, Agricultural and Cooperation and others (PLD 1996 SC 108); Messrs Khan Brothers and Associates v. Director General Food, Government of Pakistan (1998 CLC Karachi 1671); Zakaullah Khan v. Government of Pakistan through Secretary, Buildings and Roads Department, Lahore (PLD 1998 Lahore 132); Messrs World Circle Limited v. State Cement Corporation of Pakistan Ltd. (1997 CLC Kar. 212); Messrs Quality Builders Ltd. v. Karachi Metropolitan Corporation (1999 CLC 1777 Karachi); Ghee Corporation of Pakistan (Pvt.) Limited v. Broken Bill Proprietary Company Limited through their Local Agents (PLD 1999 Karachi 112) Messrs Income Service v.
Messrs. Sui Gas Transmission (PLD 1993 Karachi 429) to contend that while determining the validity of an award the Court does not act as a Court of appeal. He also relied upon the case of Messrs Abdullah Traders through Partner Mukhtar Ahmad v. Trading Corporation of Pakistan through Chairmanz Attorney, Principal Officer and 2 others (1999 CLC Karachi 2047) to contend that the award cannot be set aside only on the ground that arbitrator has failed to give reasons in detail.
8. I have considered the respective contentions of the learned counsel for the parties and with their able assistance perused the sale agreement and the award filed by arbitrator.
9. In Messrs Joint Venture (Supra), it was held by the Hon'ble Supreme Court of Pakistan that a Court while hearing the objection to the award does not act as Court of appeal and re-appraisal of evidence to find out mistake or infirmity in the award is not permissible. The error or infirmity in award rendering it invalid should be one floating on the face of record on bare reading of the award.
10. In Messrs Khan Brothers (supra), the above principle of law was reiterated with full force. To similar effect are the observations recorded in the case of Zakaullah Khan by a learned Division Bench of this Court, which quoted a passage from Champsey Bhara and Company v. Javrajh Balloo Spinning and Weaving Company Ltd. (AIR 1923 P.C. 66), wherein it was held:-- "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 exceptions 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 questionof 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 basis of the award and which you can then say is erroneous."
' The above settled proposition of law has been followed in the case of Messrs World Circle Ltd; Ghee Corporation of Pakistan (Pvt.); Messrs Income Services, (Supra).
11. In 1999 CLC 2047, it was considered by a learned Judge of Karachi High Court that award could not be set aside merely on the ground that arbitrator had not given sufficient reasons in support of award. Keeping in view the above principles of law I now proceed to examine whether any error or mistake is apparent on the face of record to render it invalid. The first contention of the learned counsel for the petitioner to the effect that the award is unreasoned and sketchy is devoid of any force. The learned arbitrator gave opportunity of hearing to the parties, considered their case in detail, examined the document, and, thereafter recorded finding which contain reasons.
12. Clause 3 of the sale agreement in clear terms provided that plant and machinery or the land, building and structures of the old plant will not be subject of sale and the area of old plant will remain cordoned off by a boundary wall. No violation of clause 3 appears in the award.
13. The contention that no criteria has been fixed by the Arbitrator in allowing reduction in sale price/net worth is also not worthy of merit. Clause 8 of the agreement provided that buyer shall be responsible for payment/discharge of all liabilities including that of old plant. In presence of this clause this clause which bound the buyer for payment/discharge of all liabilities of the Company, the arbitrator liberally granted the relief to the petitioner to which he was not entitled.
14. The learned Arbitrator granted mark up at the rate of 16% per annum on the outstanding amount. This was agreed to by the parties as is evidenced by para. 2 of the agreement signed by the parties. The petitioner, therefore, being bound by the express terms cannot legitimately make any grievance.
15. As a result of the above discussion, no error or infirmity in the award could be discovered.
Resultantly, the objections to the award are rejected.
' The award is made rule of Court.
Award made rule of Court.