This civil revision arises out of an application, under section 5 of the Arbitration (Protocol and Convention) Act, 1937, pending in the Court of Mr. Jahangir Ali Sheikh, Civil Judge First Class, Faisalabad.
2. The application was filed by the respondent, Messrs European Grains and Shipping Limited, which is a company incorporated under the laws of England. The petitioner herein, Messrs Sargroh Oil Industries Limited, who is respondent in the aforesaid application, is a company incorporated under the Companies Act, 1913. The parties entered into a contract whereby the petitioner was to supply certain goods to the respondent. Under the aforesaid contract, any dispute arising between the parties was to be referred to the Grain and Feed Trade Association Ltd., London, England, for arbitration. Accordingly, a dispute having cropped up between the parties was referred to arbitration by the aforesaid Association, which made an award in favour of the respondent and against the petitioner. The petitioner went in appeal before the Board of Appeal of the said Association, which gave an award holding the petitioner liable to pay a sum of $. 5408 with interest at the rate of 10 per cent. The aforesaid amount calculated in Pakistani Currency at the rate of $ 1.00 equal to Rs. 9.80 comes to Rs. 62,273.12. The respondent, therefore, made the aforesaid application, under section 5 of the Arbitration ( Protocol and Convention ) Act, for pronouncement of ,judgment and passing a decree in terms of the award.
3. The petitioner resisted the application on a number of grounds which gave rise to the following issues :
(1) Whether the provisions of Arbitration Protocol and Convention) Act, 1937 are not applicable to the present case ? O. P. P.
(2) Whether the Act of 1937 referred in issue No. 1 above is no longer a good law ? O. P. P.
(3) Whether Pakistan is not a signatory to the convention of 1958 send as such the award made in U. K. Cannot be enforced in Pakistan ? O. P. P.
(4) Whether the award can be enforced in Pakistan ? O. P. P.
(5) Whether the amount of award, which is in dollars cannot be permitted to be converted into Pakistan currency ? O. P. P.
(6) Whether the award does not qualify the terms of foreign award, if so to what effect ? O. P. P.
(7) Whether the arbitrators have misconducted themselves, if so to what effect? O. P. R.
(8) Whether the Board of Appeal has also acted illegally and the decision of the Board of Appeal is of no legal consequence ? O. P. R.
(9) Whether the petition in within time ? O. P. R.
(10) Whether the petition has not been correctly valued for the court-fee, if so what is the correct fee ? O. P. R. s
(11) Whether the petition in its present form is not maintainable ?O. P. R.
(12) Whether the Court has no jurisdiction to try this petition ? O. P. P.
(13) Whether the petition has not been properly presented and instituted? O. P. P.
(14) Whether the petitioner has no cause of action and locus stands to bring the petition ? O. P. R.
(15) Whether the respondent has been improperly described and has been so improperly described intentionally, if so to what effect ? O. P. R.
(16) Whether the award is illegal and void ? O. P. R.
(17) Relief.
After the striking of these issues, the following additional issue was framed by the trial Court : If issue No. 16 is answered in the negative then whether the petitioner is entitled for the relief claimed-O. P. P.
4. The case miss at the stage of evidence when the petitioner made an application for examining their two witnesses, namely, Mr,. M. Anwar and Mr. K. Khalid both residing in London, on commission.
Their request was opposed by the respondent, who also made a separate application praying that the petitioner be directed to confine its evidence within the ambit of sections 7 and 8 of the Arbitration (Protocol and Convention) Act, which read as follows "7. Condition for enforcement of foreign awards.-(I) In order that a foreign award may be enforceable under this Act it must have-
(a) been made in pursuance of an agreement for arbitration which was valid under the law by which it was governed,
(b) been made by the tribunal provided for in the agreement or constituted in manner agreed upon by the parties,
(c) been made in conformity with the law governing the arbitration procedure,
(d) become final in the country in which it was made,
(e) been in respect of a matter which may lawfully be referred to arbitration under the law of Pakistan, and the enforcement thereof must not be contrary to the public policy or the law of Pakistan.
(2) A foreign award shall not be enforceable under-this Act if the Court dealing with the case is satisfied that
(a) the award has been annulled in the country in which it was made, or
(b) the party again whom it is sought to enforce the award was not given notice of the arbitration proceedings in sufficient time to enable him to present his case, or was under some legal incapacity and was not properly represented, or
(c) the award does not deal with all the questions referred or contains decisions on matter beyond the scope of the agreement for arbitration Provided that if the award does not deal with all questions referred the Court may, if it thinks fit, either postpone the enforcement of the award or order its enforcement subject to the giving of such security by the person seeking to enforce it as the Court may think fit.
(3) If a party seeking to resist the enforcement of a foreign award proves that there is any ground other than the non-existence of the conditions specified in clauses (a), (b) and (c) of subsection (1), or the existence of the conditions specified in clauses (b) and (c) of subsection (2), entitling him to contest the validity of the award, the Court may, if it thinks fit, either refuse to enforce the award or adjourn the hearing until after the expiration of such period as appears to the Court to be reasonably sufficient to enable that ,party to take the necessary steps to have the award annulled by the competent tribunal.
8. Evidence.-(1) The party seeking to enforce a foreign award must produce-
(a) the original award or a copy thereof duly authenticated in manner required by the law of the country in which it was made ;
(b) evidence proving that the award has become final ; and
(c) such evidence as may be necessary to prove that the award is a foreign award and that the conditions mentioned in clauses (a), (b) and (c) of subsection (1) of section 7 are satisfied.
(2) Where any document requiring to be produced under subsection (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in Pakistan."
Both the applications referred to above were disposed of by the learned Civil Judge by means of order, dated the 23rd of September 1978. He disallowed the petitioner's application for examination of its two witnesses on commission. He, however, accepted the application submitted by the respondent holding that with a view to enforcing the award in its favour the respondent will fulfill conditions as laid down under sections 7 and 8 of the Arbitration (Protocol and Convention) Act, and the petitioner "can make objection and lead evidence but within the ambit of sections 7 and 8", Feeling aggrieved by the above order of the learned trial Court, the petitioner has come up in revision to this Court.
5. In the impugned order, the learned Civil Judge made reference to the provisions of sections 5, 6, 7 and ;8 of the Arbitration (Protocol and Convention) Act, and then observed asunder : "Reading all these provisions minutely it becomes abundantly clear that burden has been placed, time and again on the party who wants to get the award enforced through Court. It is also clear there from that there is no scope therein that a foreign award can be set aside on the ground of misconduct as provided under section 30 of the Arbitration Act No. 10 of 1940. Thus generally the question of misconduct is not to be an issue in the case of foreign award. From the provisions of clause (b) of subsection (2) of section 7 it also becomes clear that those are the cases which are of purely factual in nature and the rest of the cases are of legal nature or else are partly factual and partly legal. But now the evidence proposed to be given by witnesses Nos. 7 and 8, namely, Muhammad Anwar and M. Khalid as supplied to the Court in the memorandum of evidence on 23-7-78 does not fall within any of these clauses. It is, therefore strictly speaking, not relevant under sections 7 and 8 of Act No. 6 of 1937. Since the evidence is not relevant, therefore, this type of evidence is not necessary, Accordingly the respondent cannot be allowed to lead such type of evidence under the provisions of Order XXVI, rule 5, C. P. C. By issuance of commission, as this Court is not satisfied that the evidence of those persons is necessary. I may mention here at this stage that this Court cannot ignore the fact that the execution of the commission, to those persons in London will go to prolong the proceedings for sufficient time."
6. While admitting this revision petition to a regular hearing, my learned brother Muhammad Afzal Zullah, J., was not inclined to interfere with the order of the learned trial Court refusing commission for the examination of the two witnesses of the petitioner on commission and admitted the revision petition only for the purpose of considering the question as to whether the learned trial Court could refuse to record evidence on the issue already framed by it.
The relevant portions of the admitting note read as follows :- "The learned trial Judge while refusing to examine them on commission has kept it open for the petitioner to produce them in Court and examine them as witnesses. Except for the subject to be discussed in the paragraph next following "qua the necessity", the order of the learned trial Court refusing commission is not such that it should be interfered with in revisional jurisdiction of this Court .
While deciding the application submitted from the respondents side for confirming the present petitioner, when leading, evidence, to the ambit of sections 7 and 8 of the Arbitration (Protocol and Convention) Act, 1937, learned counsel has rightly pointed out, the learned Judge at some places used such language that a genuine apprehension has been entertained by the petitioner that his evidence on vital issues, which have already been framed, has been shut out once for all. Although the learned Judge tried to use such words as 'strictly' and 'generally' and finally left scope open for examination of the witnesses, indicating as if he was giving a prima facie opinion ; the other impression cannot be altogether excluded that the learned Judge might have intentionally decided the question finally because he also used the expression like 'no scope', 'clear' and 'abundantly'. The question whether the learned Judge, if he intended to shut out the evidence, could do so on miscellaneous application particularly when issues had already been framed in connection with which the petitioner has prima facie right to lead evidence, needs consideration."
I will, therefore. Not look into the validity of the impugned order in so far as it relates to the refusal of the trial Court to issue a commission for the examination of the petitioner's witnesses and would simply examine as to whether the restriction imposed by the said Court on the production of evidence by the petitioner is sustainable.
7. Learned counsel for the petitioner contended that with a view to proving issues Nos. 7 and 8, which have been framed on the basis of the pleadings of the parties, the petitioner could' lead evidence regarding misconduct on the part of the arbitrators and the illegalities committed by the Board of Appeal. He maintained that if there was no evidence on those issues it will not be possible for the trial Court to record its findings thereon. He urged that even if the Arbitration (Protocol and Convention) Act (hereinafter referred to as the 1937 Act) was held to be applicable to the proceedings before the trial Court, the petitioner could lead evidence on the issue of misconduct because the award in question cannot be enforced if it offends against the provisions of section 30 of the Arbitration Act, 1940, which reads as under : "30. An award shall not be set aside except on one or more of the following grounds, namely :
(a) that an arbitrator or umpire has misconducted himself or the - proceedings;
(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35 ;
(c) that an award has been improperly procured or is otherwise invalid."
In support of this contention, he relied on the concluding portion of -sub. Section (1) of section 7 of the 1937 Act, which make the following reading : "enforcement thereof must not be contrary to the public policy or the law of Pakistan."
He also placed reliance oil subsection (1) of section 4 of the 1937 Act, which is to the following effect : "A foreign award shall, subject to the provisions of this Act, be enforceable in Pakistan as if it were an award made on the matter referred to arbitration in Pakistan."
It was emphasized by the learned counsel for the petitioner that since the Arbitration Act, 1940 (hereinafter referred to as the 1940 Act) was included in the laws of Pakistan referred to in subsection (1) of section 7 of the 1937 Act, the learned trial Court was not right in taking the view that "there is no scope therein that a foreign award can be set aside on the ground of misconduct as provided under section 30 of the Arbitration Act, 1940 (X of 1940)".
8. On the other hand, learned counsel for the respondent contended that it was only in England the petitioner could challenge the validity of the award in question in accordance with the English law and as the petitioner had failed to do so, the plea of misconduct could not be raised before a Court of Pakistan which was dealing with the question of enforcement of the award. He also submitted that in view of section 47 of the 1940 Act, the provisions of that Act (including section 30 thereof) could not be extended to a foreign award. Section 47 provides as follows : "47. Subject to the provisions of section 46 and save in so far as is otherwise provided by any law for the time being in force, the provisions of this Act shall apply to all arbitrations and to all proceedings thereunder: Provided that an arbitration award otherwise obtained may with the consent of all the parties interested be taken into consideration as a compromise or adjustment of a suit by any Court before which the suit is pending."
It was, however, conceded by the learned counsel for the respondent that if the petitioner felt that the arbitrators had violated the rules of natural justice and had thus been guilty of misconduct, the petitioner could produce evidence in this behalf. He did not say any thing as to why the petitioner should not be allowed to lead evidence on Issues Nos. 7 and 8 which have to be decided by the trial Court.
9. Since the main case is still pending before the trial Court, I would not like to express any opinion regarding the applicability of the 1937 Act o the 1940 Act or both, because the trial Court has yet to decide issues Nos : 1 and 2 which relate to applicability of the 1937 Act. The learned trial Court also should not have, on the basis of a miscellaneous application, gone into the question of the applicability of the 1940 Act to the proceedings before it because if the 1940 Act is held to be inapplicable to these proceedings I would imply (in view of the provisions of section 47 thereof) that even if the 1940 Act is not applicable, the 1937 Act is applicable to the arbitration matter before the trial Court. Thus the recording of such a finding will have the effect of pre judging the main case on Issues Nos. 1 and 2. I, therefore, refrain from giving any finding on the question relating to the applicability of the said two Acts, which shall be decided by the trial Court while disposing of the main case. The opinion already expressed by the learned Civil Judge in this regard appears to be of tentative nature and there will be no bar to his taking a different view if, after hearing the entire case before him, he is inclined to do so.
10. The question relating to the production of evidence by the petitioner' on the issue relating to misconduct does not present much difficulty because the trial Court has already framed an issue in this behalf which is to be~~ proved by the petitioner. The issues noted above have been reproduced from a copy thereof which was placed on record by the learned counsel for the respondent. There is nothing in that copy or in any other document on the record to show that the respondent had raised any objection, to the striking of Issues Nos. 7 and 8. Even after the framing of. The said two issues, if the respondent had felt that they did not arise out of the pleadings of the parties or were not warranted by law, the respondent could make an application, under order At V, rule 5 of the Code of Civil Procedure, for striking out or amendment of, those issues but no such effort was made by the respondent When these issues are very much on the record, the trial Court is bound to decide them. This, however, the said Court will not be able to do in the absence of evidence. The learned Civil Judge was, therefore, not justified it shutting out the petitioner's evidence on the said issues and obliging the petitioner to produce evidence within the ambit of sections 7 and 8 of the 1937 Act. As already stated, it was also conceded by the learned counsel for the respondent that the petitioner could lead evidence relating to misconduct arising out of the non-observance of rules of natural justice by the arbitrators. Obviously, this type of misconduct too does not find mention in sections 7 and 8 of the 1937 Act. I am, therefore, unable to uphold the order of the learned trial Court.
11. In the result, I accept the revision petition and direct that the trial Court shall allow the parties to lead evidence on Issues Nos. 7 and 8 as framed by it. Thereafter, while giving a final verdict in the case, the trial Court will first determine as to what laws will apply to the arbitration matter before it and after recording a finding in this behalf it will make use of the evidence in so far as it will be necessary for the purpose of deciding the aforesaid matter.
12. There shall be no order as to costs.
13. The points involved in Civil Revisions Nos. 1174, 1175, 1176 and 1177 of 1978 are the same as raised in this revision petition. This order shall, therefore, dispose of the said revision petitions as well.
S. A. H.