This is a petition under section 5 of the Arbitration (Protocol and Convention) Act, 1937 (hereinafter referred to as the Act), filed by the petitioners, who have their registered office at Hong Kong, for the enforce--ment of a foreign award. In the above petition the petitioners have prayed for the following reliefs :- "Wherefore, it is respectfully prayed that this honourable Court may be pleased to : -
(a) order that the said award be filed in this honourable Court ;
(b) pronounce the judgment in terms of the said award ;-
(c) award the cost of the application to the petitioner ; and
(d) order any other/further relief as this honourable Court may deem fit.- The facts leading to the filing of the above petition are that by consent No. 2102 dated 26-9-1972 and No. 2106 dated 28-9-1972 the respondents sold to the petitioners 500 and 1000 bales of cotton respectively. It has been averred that the aforesaid contracts were entered into between the parties as per rules and regulations of the Liverpool Cotton Association Ltd. (hereinafter referred to as Association), which inter alia included arbitration. It has been further averred that certain differences arose between the petitioners and the respondents due to the respondents' breaches of the contracts. Consequently, the petitioners referred the dispute in respect of the aforesaid two contracts to arbitration to the aforesaid Association. It has been averred that the said Association made an award on 22-7-1975 in respect of the above two contracts, wherein a sum of U. S. $ 224584 with 10 interest per annum calculating from 5-8-1975 until the date of payment thereof, plus -- 500 towards the fee and expenses of the arbitration have been awarded. It has also been averred that the petitioners have duly complied with the terms of the award but the respondents have failed. To fulfil the obligation under the said award despite of repeated requests It has also been averred that the award was made by an agreed tribunal in pursuance of an agreement for arbitration and is clearly a foreign award in terms of section 2 of the Act. On the basis of the above assertion the petitioners have prayed for the reliefs already quoted hereinabove.
2. The respondents have filed written objections wherein inter alia it has been averred that there was no concluded contract between the parties for the sale of the cotton or that the same were subject to the rules and regulations of the Association. It has bean averred that the question of sale of cotton was at the stage of negotiation which was subject to laws in Pakistan under which the respondents were required to obtain permission from the State Bank of Pakistan. It has been further averred that the State Bank of Pakistan through its letter dated 19-2-1973 declined to accord the necessary permission. It has also been averred that on the alleged dates of contracts, namely, 26- 9-1972 and 28----1972 the respondents' agent Messrs Wang Fu Long Hong Ltd. (hereinafter referred to as the agent) bad no authority to enter into the above contracts. It has also been averred that if it is to be held that there were contracts, the same were subject to laws/ regulations restrictions and, therefore, on refusal of the permission by the State Bank the contracts stood frustrated. It has further been averred that the Association bad no jurisdiction to adjudicate upon the alleged dispute. It has also been averred that the arbitration tribunal failed to decide the material points in issue. It has also been averred that the award in question is not a foreign award within the meaning of the Act. It has further been averred that the alleged award is not enforceable in Pakistan as both the countries, I.e. United Kingdom and Pakistan are not the signatories to the Convention and that the reciprocal arrangements are not provided in United Kingdom. The respondents have also raised some other legal pleas in the above objections.
3. (a) Mr. A. Rauf learned counsel for the respondents in opposition to the above petition has urged the following points
(i) That there was no contract between the petitioners and the respondents,
(ii) that on the alleged dates of the conclusion of the contracts, the respondents' agent had no authority to enter into the contract,
(iii) that for the purpose of entering into a final contract the respondents were required to be equiped with the State Bank's permission which was declined and, therefore, the contracts had become impossible to be performed,
(iv) that the award is not a foreign award within the meaning of section 2 of the Act.
Mr. A. Rauf has also assailed the award on the following additional grounds :-
(v) That as the arbitrators failed to appoint an umpire before entering upon the reference, the arbitration proceedings were illegal and consequently the award stands vitiated,
(iv) that the arbitration tribunal never communicated any claim to the respondents, and, therefore, the respondents were not given fair opportunity to meet the petitioners' case,
(vii) that the arbitration tribunal had committed misconduct by not deciding the real issue in the dispute and not taking into consideration the respondents' contentions,
(viii) that as the award does not disclose the basis upon which the amount of damages has been calculated for the alleged breach of the contracts, it stands vitiated,
(ix) The award is illegal as the arbitrators have awarded interest though there was no agreement to that effect between the parties.
(6) Mr. Hasnain, the learned counsel for the petitioners has refuted the above contentions of the learned counsel for the respondents, which I will deal while discussing the various contentions.
4. (a) Before taking up the above contentions of the learned counsel for the respondents, it will be appropriate to know the scope of the jurisdiction of this Court in relation to a foreign award. In this regard, it may be advantageous to reproduce hereinbelow section 7 of the Act which reads as follows :- "Section 7.--(1) 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 arbitra--tion 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) that award has been annulled in the country in which it was made, or
(b) the party against 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 to 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 competent tribunal."
(b) It may be noticed that subsection (1) of the above quoted section 7 provides that a foreign award may be enforceable if made in pursuance of an agreement for arbitration which was valid under the law by which it was governed and has been made by a tribunal provided in the agreement or constituted in the manner agreed upon by the parties, in conformity with the law governing the arbitration procedure in respect of a matter which may lawfully be referred to arbitration under the law of Pakistan and that the award had become final in the-country in which it was made. Whereas subsection (2) of section 7 provides the following three grounds rendering a foreign award unenforceable,
(a) that the award has been annulled in the country in which it was made,
(b) the party against whom it is sought to be enforced was not given notice of the arbitration proceedings in sufficient time or was under some legal incapacitry,
(c) the award does not deal with all the questions referred to or contains decisions on matters beyond the scope of the agreement for arbitration.
(c) It may be pertinent to refer to section 30 of the Arbitration Act, 1940 which provides the grounds upon which an award given in Pakistan can be set aside. The aforesaid section 30 reads as follows;--- "Section 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 proceeding ;
(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."
It may be observed that the grounds upon which a Pakistani award can be set aside are mostly different from the grounds of attack to a foreign award mentioned in section 7 of the Act inasmuch as under section 30 of the Arbitration Act a Pakistani award can be set aside on the grounds that an arbitrator or an umpire has misconducted himself or that on award has been improperly procured or is otherwise invalid. Whereas these grounds do not find place in section 7 of the Act.
Similarly another ground for setting aside an award mentioned section 30 namely, that an award has been made after the issue of an order by the Court superseding the arbitration or after the arbitration proceedings have become invalid under section 35 of the Arbitration Act, does not find place in section 7 of the Act.
5. Reverting to the first contention that there was no concluded agreement between the parties, it may be observed that Mr. A Rauf has drawn my attention to documents Nos, 14 and 15 on the record which are to the two contracts mentioned by me earlier. The above contracts have been signed by the petitioners as buyers and Messrs Wang Fu Long Cotton Hong Kong Ltd. (i.e. The agents). On the basis of the above signatures it has been urged that the above two contracts were not between petitioners and the respondents. It may be observed that para, 1 of the above contract (which is on a printed form) reads as follows "We beg to confirm having sold you on this date the under-mentioned goods on behalf of Messrs Pir Muhammad Shamsuddin Third Floor Cotton Exchange Bldg., I. I. Chundrigar Road, Karachi, Pakistan."
6. (a) The basic question which requires consideration is as to whether the agents had the authority on the above dates to execute the contracts in question which point is covered under the second contention mentioned hereinabove, which I intend to deal with. Mr. A. Rauf in support of his contention that the agents had no authority on the two dates mentioned in the contracts to make any commitment or to sign the contracts has referred to a telex dated 6-10-1972 which inter alia provides as follows :---- "Trans. T. 951 ; 2500 bales : with reference to conversation (Hong--Kong) : In order to accommodate you ; as promised ; we confirm sale of 2500 bales ; without commission ; please confirm ; acceptance ; formally; The next document which Mr. A. Rauf hasreferred to is the respondents' letter dated 9-10-1972 addressed to Mr. Benjamin of the agent Company. Sub-para. 3 of the above letter is pertinent and it reads as follows;--- "You would recall that during my stay in Osaka you sold 2500 bales L.Ss-R-T-951 shipment during November to April at 22.60 C & F Hong Kong which was below limit. The sale could not be confirmed. However, in order to accommodate you I have conveyed acceptance of these 2500 bales without commission. Please convey your acceptance immediately."
On the basis of the above two documents, it was urged by Mr. A. Rauf that merely an offer was made by the respondents on the above two dates which was subsequent to the execution of the contracts and, therefore, on the dates when the two contracts were executed by the agents they were not authorised to make any firm commitment. In furtherance of his above contention, he has also referred to the copy of form E. P. C. Filed by the respondents in the State Bank of Pakistan (document No. 3) in which the date of contract given in para. 5, is 6-10-1972.
(b) On the other hand, Mr. Hasnain the learned counsel for the petitioners has drawn my attention to para. 2 of the respondents' letter dated 19-4-1975 addressed to their arbitrator, in which it has been stated that the respondents' director was in Japan/Hong-Kong during September 1972, where the agents made an offer for a total of 2500 bales T/951 at 20.60 cent per Lb. On the basis of the above statement it was urged by him that when the two contracts were executed, I e. On 26th and 28th September, 1972. The respondents' director was in Japan/Hong-Kong and that if the above statement is to be read with the respondents' telex dated 6-10-1972 and the letter dated 9-10-1972 referred to hereinabove, it will be clear that the respondents made firm commitment in September, 1972. It was also urged by him that the aforesaid telex had confirmed the sale of 2500 bales which had already taken place. It was also urged that the words "please confirm acceptance formally" were redundant and of no significance. Mr. Hasnain has also invited my attention to another telex dated 10-4-1974 whereby the respondents informed the petitioners that the paper for export was not approved by the State Bank on the ground that the price was low. It was also stated in the aforesaid telex that the shipment was not effected and that the agents were intimated accordingly and were requested to advice them. He has also referred to para. 6 of the written objections to the petition, which reads as follows;---- "By their letter dated 20-2-1973, the agents Messrs Wang Fu Long Cotton Hong Kong Ltd. Were informed by respondent that the E. P. C. Forms submitted to State Bank of Pakistan were rejected and returned by the State Bank of Pakistan on the basis of low price. It was also advised to convey this to the relevant buyers."
Mr. Hasnain has further contended that the contracts were acted upon by the parties inasmuch as the petitioners opened letters of credit, which fact has been admitted by the respondents in their letter dated 29-5-1975 addressed to their arbitrator Messrs James Platt & Co. Ltd. (document No. 18) and that the respondents filed E. P. C. Form for the permission in the State Bank of Pakistan.
(c) In my view from the respondents' telex dated 6-10-1972 and their letter dated 9-10-1972 addressed to their agents, it is clear that in fact the above two documents contained a confirmation of the commitment already made by the respondents while their director Mr. Maqbool Ahmed was in Japan/Hong-Kong in September, 1972. In the E. P. C. Form in para. 3 Messrs Wang Fu Long Cotton, Hong Kong, have been shown as the agents. In the respondents' telegram dated 10-4-1974 referred to hereinabove (document No. 5), it has been inter alia stated that the respondents intimated to their agents about the refusal of the State Bank of Pakistan to accord approval to the contract. It has also been stated that the agents were advised to convey this information to the petitioners. In para. 6 of the respondents objections quoted hereinabove, it has been clearly admitted that Messrs Wang Fu Long Cotton Hong Kong Ltd., were acting as the respondents' agents and that after the rejection of the E. P. C. Form by the State Bank of Pakistan they were advised to convey this to the relevant buyers. There is no doubt that Messrs Fu Long Hong Kong Ltd., were acting as the agents of the respondents. It is also clear that the aforesaid company was a standing agent for the respondents inasmuch as the two contracts executed between the petitioners and the respondents are on the printed form, para. 1 of which mentions that they were confirming and selling cotton on behalf of Messrs Haji Pir Muhammad Shamshuddin, Third Floor, Cotton Exchange Bldg.,
1. I. Chundrigar Road, Karachi (Pak.), i.e. The respondents. It may also be observed that the respondents had authorised their agent to make commitment for 2500 bales to the various purchasers and not only 1500 bales which were the subject-matter of the two contracts in question. This fact is borne out from the E. P. C. Form (document No. 5) wherein para. 7 the quantity mentioned is 2500 bales, 2 more or 2 % less. This is corroborated by para. 6 of the respondents, objections to the present petition quoted hereinabove, wherein as mentioned hereinabove, it has been stated that the respondents advised their agents to convey the refusal of the State Bank of Pakistan to concur its approval to the E. P. C. Form to the relevant buyers. In my view the discrepancy in the date of the contracts is not material. In the two contracts in question (documents Nos. 4 and 5) the dates mentioned are 26-9-1972 and 28-9-1972 and whereas in the E. P. C. Form the respondent gave the date of contract as 6-10-1972. The respondents had given 6-10-1972 as the date of the contract on the basis of their telex dated 6-10- 1972 (document No. 1) referred to hereinabove. Since the respondents had authorised their agents to make commitment in September, 1972 and as the aforesaid telex dated 6-0-1972 was in fact a confirmation of the above commitment, in my view the agents were competent to enter into the two contracts in question on 26-9-1972 and 28-9-1972.
(d) Mr. Hasnain the learned counsel for the petitioners in the alternative has urged that even if the agents did not have the requisite authority on 26-9-1972 and 28-9-1972 to conclude the above two contracts, the respondents by their aforesaid telex dated 6-10-1972 and the letter dated 9-10-1972 had ratified the aforesaid acts of their agents. I am inclined to agree with the above contention of the learned counsel for the petitioners. Even if it is to be conceded that the agents did not have the requisite authority on the aforesaid two dates, in my view, the respondents had ratified the aforesaid telex contracts through their above telex dated 6-10-1972 and the letter dated 9-10-1972.
(e) It was urged by Mr. Hasnain that even otherwise, as the agents in question were a standing agent for the respondents, it would be presumed that they had the requisite authority from the respondents to enter into the above two contracts. In support of his above contention he has referred to the case of Sarshar All v. Roberts Cotton Association Ltd. And another (PLD 1972 SC 244), wherein it was held that according to section 237 of the Contract Act, 1872, if an agent has apparent authority to enter into a particular contract on behalf of the principal the contract is valid even though in fact he has no such authority. It was further held that any term in a contract of agency which places restriction on the authority of the agent is unavailing against the parties who are not aware of such term if circumstances are such which conferred an apparent authority on the agent to act on behalf of the principals. In my view the above contention need not be examined in detail as I have held that the two contracts in question were binding for the foregoing other reasons.
7. (a) Reverting to the third contention of Mr. Abdul Rauf that for the purpose of entering into a final contract the respondents were required to be equiped with the State Bank of Pakistan's permission which was declined and, therefore, the contracts had become impossible to be performed, it may be observed that though before the arbitrators this plea was taken by the respondents through their letters, but it appears that no document in A support of the above plea was filed. However, before this Court the respondents while filing other documents have also filed a cyclostyled memorandum dated 15-6-1973 from the Senior Deputy Director, Exchange Control Department, State Bank of Pakistan in which reference to export S. Nos. S-48/3461, 65, 45, 157 and 112 has been made and para. 18 is tick marked which provides as follows :- "The price obtained by you is low, we therefore, regret our inability to register the sale."
It was urged by Mr. Hasnain that this document cannot be taken into consideration not only for the reason that it was not filed before the arbitrators but also because that it does not contain any reference to the two contracts in question. I will advert to this aspect a later on, but the basic question which requires consideration is, as to whether even if it is to be conceded that the State Bank of Pakistan had declined to grant permission what would be its effect, i.e. As to whether it would attract the doctrine of frustration as provided for under section 56 of the Contract Act, 1972. It may be pertinent to refer to para. 1 of the respondents' letter dated 19-4-1975 addressed to their arbitrator (document No. 13) on the above point, which reads as follows :- "Para. 1 it is well known fact and must also be in the best knowledge of L. C. A. That, although not repeated at the time of sales and/or not stated in the contracts : yet all sales of Pakistan raw cotton were subject to the approval of State Bank of Pakistan."
In the above para. The respondents have impliedly admitted the fact that at the time of entering into the two contracts in question the petitioners were not told nor it was incorporated in the two contracts that the same were subject to the approval of the State Bank of Pakistan.
Ms. A. Rauf has referred to subsections (5) and (6) of section 12 of the Foreign Exchange Regulation Act, 1947 which read as follows;---- Section 12 (1) .---------------
(2) .----------------------------
(3) . --------------------------.
(4) .-------------------------
(5) Where in relation to any such goods the value as stated in the invoice is less than the amount which in the opinion of the State Bank represents the full export value of those goods, the State Bank may issue an order requiring the person holding the shipping documents to retain possession thereof until such time as the exporter of the goods has made arrangements for the State Bank or a person authorised by the State Bank to receive on behalf of the exporters payment in the prescribed manner of an amount which represents in the opinion of the State Bank the full export value of the goods.
(6) For the purpose of ensuring compliance with the provisions of this section and any orders or directions made thereunder, the State Bank any require any person making any export of goods to which a notification under subsection (1) applies to exhibit contracts with his foreign buyer or other evidence to show that the full amount payable by the said buyer in respect of the goods has been, or will within the prescribed period be, paid in the prescribed manner."
(b) On the basis of the above-quoted two subsections it was urged by the learned counsel for the respondents that under subsection (5) the State Bank was competent to order the withholding of export of the goods in respect of which it was of the view that the value stated to the invoice was less than the amount representing the full value of the goods. Under sub-section (6) the State Bank has been authorised through a notification to require any person making any export of goods to make an application with the requisite documents and information in respect of the goods to be exported. Though the respondents have not produced the original or the photostat copy of any notification but they have placed a photostat copy of a notice to the exporters dated 17-11-1950 issued by the Deputy Controller, State Bank of Pakistan which provided that as from the date to be notified it would be necessary for the exporters to produce the authority for inspecting the relative approved copy of the form to the custom with the G. R. P. X. Companies when exporting cotton and again to the authorised dealer in foreign exchange at the time of negotiation of the documents covering the relative shipment.
(c) On the basis of the above section and aforesaid circular, it was urged by Mr. A. Rauf that since it was a legal requirement to obtain permission of the State Bank of Pakistan and as the permission was not granted, the two contracts in question stood frustrated. In support of his above contention he has referred to the case of Bengal Oil Mills Ltd. v. Dada & Sons (PLD 1964 Kar. 18), the case of Messrs Jatoi Cotton Ginning and pressing Factory v. Messrs Zainab Usman (PLD 1965 Kar. 22) and the case of Yousuf v. Hashim Bhai & Co. And others (PLD 1966 Kar. 456). On the other hand Mr. Hasnain has urged. That as it was not provided in the contracts that the same were subject to the approval of the State Bank of Pakistan, the doctrine of frustration was not attracted to in the instant case. His further contention was that there was no prohibition to export the cotton and that under subsection (5) of section 12 quoted hereinabove, the respondents were obliged to arrange remittance for the deficit foreign exchange to Pakistan because of their accepting the low price. In support of his aforesaid first contention he has relied upon the case of Messrs Belgamwalla Cotton Ginning and Pressing Factory, Karachi v. Lalchand (PLD 1961 Kar. 1), the case of Messrs Badrinarain Agarwalla v. Messrs Pak Jute Balers Ltd. (PLD 1966 Dacca 164), the case of Messrs Ha/1 Muhammad Zakaria & Co. v. The Province of West Pakistan (1969 SCMR 428), the case of Partabrnull Rameshawar v. K. C. Sethia ((1951) 2 All E L R 352), and the case of Peser Casidy Seed Company Ltd. v. Osunstukkukauppa I. L. ((1957) 1 W L R 273).
(d) Reverting to PLD 1964 Kar., it may be observed that the facts were that after the conclusion of the contract the Government had fixed the rates of cottonseed under the Martial Law Regulation which were less than the contracted rate. It was held by a learned Single Judge that the contract was frustrated by virtue of section 56 of the Contract Act.
(e) In PLD 1965 Kar. Which is a judgment of the Division Bench, the aforesaid view was upheld and it was held that upon fixation of price of the cottonseed under the Martial Law Regulation, which was less than the agreed price, the contract stood frustrated.
(f) Reverting to PLD 1966 Kar. It may be stated that the facts were that certain truck chassis were imported by the vendor not on commercial licence but against special licence granted under Export Incentive Scheme. The vendor sold the aferesaid chassis to the purchaser in advance in bona fide belief that he was competent to deliver the chassis on arrival to any person of his own choice. However, on the arrival of the aforesaid truck chassis the Controller-General acting under Essential Commodities (Control and Distribution) Order, 1953, directed the vendor to deliver the chassis to a person other than the. Purchaser, it was held by a learned Single Judge that the contract had become impossible to be performed, in view of the above intervening act on the part of the Controller-General.
(g) In my view neither the aforesaid 1964-65 Karachi cases wherein on account of the fixation of the price under the Martial Law Regulation, it was held that the contracts stood frustrated as the prices of the contracts were more than the price notified under the Martial Law Regulation, have any application to the instant case, nor the above 1966 Karachi case wherein the vendor was incapacitated to deliver the chassis on account of the order passed by the Controller-General in-- asmuch as in the instant case, it is an admitted position that the export of cotton at the relevant time was not prohibited nor the price of cotton was fixed under any law as to render the contracts in question impossible to be performed.
(h) Referring to PLD 1961 Kar. It may be observed that in the above case the facts were that a vendor sold certain quantity of cottonseeds to the purchaser, the vendor was unable to effect the delivery of the goods an account of the alleged non-availability of the railway wagons for the despatch of the goods. Non-availability of the wagons was not due to the dearth of wagons but due to the introduction of the Government of a system of priority of goods-wise, which system was in existence at the time of the conclusion of the contract and at the time of performance it was held by a Division Bench that the provisions of section 56 of the Contract Act, 1874 were not attracted to and the vendor was liable for the breach of the contract.
(i) Reverting to PLD 1966 Dacca, it may be stated that the facts were that the vendor sold certain quantity of jute for export. At the time of the above contract Government circular requiring the registration of exporters was already in existence and known to the vendor, the vendor failed to supply the goods and his plea that the contract could not be fulfilled for want of registration was rejected and it was held that section 56 of the Contract Act had no application to the said case.
(j) As regards 1969 SCMR 428 it may be observed that the facts were that a firm gave its tender for the purchase of mutter dal to the then Government of Sind for export. The aforesaid firm committed breach in as much they failed to export the contracted mutter dal. It was urged by the purchaser that as after the conclusion of the contract a ban for the import of mutter dal was imposed by the Governments of India and Ceylon, the firm was unable to export the aforesaid mutter dal. It was further urged that the contract stood frustrated under section 56 of the Contract Act. The Supreme Court of Pakistan was pleased to hold that the purchaser failed to advance any evidence to show that they could not export the contracted mutter dal to other foreign countries other than India and Ceylon. It was further held that section 56 of the Contract Act was not attracted to the case.
(k) Reverting to 1951 All England Law Reports, it may be stated that an Indian Company entered into a contract to export jute from India to Italy. The export was only permitted under licence subject to quote. It was not expressed in the contract that it was subject to quota, but the condition governing the sellers ability to perform the contract under quota system was known to both the parties. The Indian vendor was unable to fulfil the contract on the ground that they could not get the requisite licence as they did not have the requisite quota to Bator the contracted quantity. The House of Lords of England upheld the judgment of Court of Appeal of England, wherein it was held that the Court would read an implied term into contract only where it was clear that both the parties intended that term operate. It was further held that although both the parties knew that the contracts could only be made out of the seller's quota, the question whether the quota would suffice for the purpose dependant on matters concerning the conduct of the seller's business which was peculiarly within their knowledge as opposed to that of buyers. It was held that the vendor had no defence to the breach.
(l) Referring to 57 Weekly Law Reports,. It may be observed that a seller carrying on business in Finland sold to an English company a quantity of ants eggs, F. O. E. Hailsinki "delivery prompt as soon as export licence granted". It may be stated that prior to the conclusion of the contract the buyer was assured that obtaining a licence would be a pure formality. A Division Bench of the Queen's Bench, while considering an award in respect of the dispute arising out of the aforesaid contract held that on the construc--tion of the contract and in the circumstances there was an absolute warranty on the part of the seller that they would obtain an export licence and that they would use all due diligence to do so. It was further held that as the seller failed to obtain export licence and to export the goods, they were liable to pay damages.
(m) Mr. Hasnain the learned counsel for the petitioners has also referred to a book by the name of "The Export Trade Law and Practice of Interna--tional Trade, VIth Edition by Clive M. Schmitthoff " where the learned author has made distinction between the contracts where a contract does not provide any term to the effect that it was subject to licence, or subject to quota or a similar term, making it conditional and a contract which contained the aforesaid condition. While relying upon the various cases the view of the learned author was that in the absence . Of any condition subject to the aforesaid condition, the vendor would have no defence for the breach. It has also been observed that even where aforesaid condition is provided, I.e. Subject to the licence or quota, ere., such a clause will not give complete protection but the protection will be available to a seller only if he can show that although the used due diligence and took all reasonable steps, be was unable to obtain the licence or to comply with the Government regulation or that he could do so only on prohibitive terms which he could not reasonably be expected to accept.
(n) In my view the rulings cited and the aforesaid book referred to by Mr. Hasnain supports the case of the petitioners inasmuch as the following principles are deducible from the above-cited and discussed cases and the aforesaid book "(i) that if an exporter as required to fulfil certain legal requirements before exporting the goods to a, foreign country and if those restric--tions/requirements were in force at the time of the conclusion a contract which does not provide that the contract is subject to the condition of the fulfilment of the above requirements, in such a case the vendor cannot plead frustration of the contract on the ground that the authority declined to grant the requisite permission or that the vendor could not comply with the legal requirements without his fault.
(ii) that even where a contract is made subject to obtaining of a licence or subject to quota or subject to any other similar term, it is obligatory on the part of a vendor to prove that as a reasonable person he has acted diligently and has taken all possible steps to fulfil his obligation in order to plead successfully the above condition in defence in an, action for the breach of the contract."
(o) In the instant case, it is an admitted position that the contracts do not provide any condition to the effect that the same were subject to the approval of the State Bank of Pakistan and, therefore, the respondents cannot plead frustration on the ground of the alleged refusal of the Stat Bank of Pakistan to accord approval to the two contracts in question. Furthermore, the respondents are unable to satisfy me on the question that they had acted diligently and had taken all reasonable steps with the object to get the requisite approval of the State Bank of Pakistan. It may be observed that the memorandum dated 15-6-1973 of the Senior Deputy Director. State Bank of Pakistan (document No. 4) referred to hereinabove, is dated 15-6-1973 whereas the respondents in para. 6 of their objections to the above petition have averred that by their letter dated 20-2-1973 the agents Messrs Wang Fu Long Cotton Hong-Kong Ltd., were informed by the respondent that E. P. C.
Forms submitted to the State Bank of Pakistan were rejected and returned by the State Bank of Pakistan on the basis of low price. The latter assertion clearly indicates that the memorandum in question does not relate to the two contracts in question. The above inference is also supported from the fact that the aforesaid memorandum does not contain any reference to the contracts under reference. If the State Bank of Pakistan had returned the E. P. C. Forms before 20-2-1973 as has been asserted in para. 6 of the respondents' objections, there was no occasion for the State Bank of Pakistan to issue the aforesaid memorandum on 15-6-1973. It is also significant to note that under the two contracts the delivery was November/December, 1972. It is not understandable as to how the State Bank of Pakistan would send intimation on 15-6-1973 for the rejection of E. P. C. Forms.
It may be noticed that the respondents had not produced before the Arbitration Tribunal any evidence to prove that they had acted diligently and had taken all possible steps which a reasonable person would have taken in the similar circumstances. The respondents bad not even produced the aforesaid memorandum of the Senior Director of the State Bank of Pakistan before the Arbitration Tribunal. It is further significant to note that the respondents note that the respondents did not send any intimation to the petitioners before their telex dated 10-4-1974, which was after nearly I J years from the due date of the delivery of the contracted goods; nor the respondents informed the petitioners that according to the State Bank what would have been the reasonable price for the contracted goods. In my view even if it is to be held that the two contracts were subject to the permission of the State Bank of Pakistan, the respondents have failed to discharge the burden that they had acted diligently and had taken all reasonable steps which a reasonable vendor in the similar circum--stances of the case would have taken. Furthermore, it is clear from the respondents' aforesaid telex dated 6-10-1972 and letter dated 9-10-1972 that the respondents deliberately accepted low price of the contracted cotton, it is very much doubtful as to whether the respondents can plead the low price in defence in an action for the breach of the contract.
(p) It may also be observed that section 56 of the Contract Act, comes into play when there is physical impossibility on account of intervening act over which the vendor bad no control and which he could not have avoided with all due diligence. In the instant case, the requirement to obtain the approval of the State Bank to a contract for export was in existence at the time when the two contracts in question were concluded as pointed out hereinabove and, therefore, this was not a requirement which was introduced after the conclusion of the contracts in order to attract section 56 of the Contract Act. Furthermore, the Courts have consistently made a distinction between a physical impossibility and a commercial impossibility. In the latter case the consensus of view is that the doctrine of frustration is not attracted to. In the instant case the respondents have not even attempted to show what would have been the reasonable price of the cotton in question which would have been acceptable to the State Bank.
(q) For the foregoing reasons I am of the view that the respondents cannot press into service the doctrine of frustration in the instant case. I may also observe that the question as to whether the contracts stood frustrated was a question within the domain of the Arbitration Tribunal. Even erroneous view of the Arbitration Tribunal on the above question will not furnish a ground to refuse the enforcement of the award as it has become final according to English law.
(r) Reverting to the second contention that the respondents could have performed their contracts by arranging the deficit foreign exchange as per requirement of section 12(5) of the Foreign Exchange Regulation Act, it will suffice that in view of the foregoing discussion on the other contentions, this contention does not require any detailed examination, particularly when it is not known what account of foreign exchange was involved.
6. (a) Reverting to the fourth contention of the learned counsel for the respondents that the award in question is not a foreign award within the meaning of section 2 of the Act, it may be observed that Mr. A. Rauf has relied upon section 2 of the Act which defines a foreign award. It may be advantageous to reproduce hereinbelow the aforesaid section 2 which reads as follows :- "Section 2.-In this Act "foreign award" means an award on differences relating to matters considered as commercial under the law in force in Pakistan made after the 28th day of July, 1924-
(a) in pursuance of an agreement for arbitration to which the protocol set forth in the First Schedule applies, and
(b) between persons of whom one is subject to the jurisdiction of some one of such powers as the Central Government, being satisfied that reciprocal provisions have been made, may, by notification in the official Gazette, declare to be parties to the Convention set forth in the Second Schedule, and of whom the other is subject to the jurisdiction of some other of the powers aforesaid, and
(c) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made, may, by like notification, declare to be territories to which the said Convention applies, and territories to which the said convention applies, and For the purposes of this Act an award shall not be deemed to be final if any proceedings for the purpose of contesting the validity of the award are pending in the country in which it was made."
(b) On the basis of the clause (b) of section 2 quoted hereinabove, it was urged by Mr. A. Rauf that in order to attract the above section, it is necessary that in 'the country in which the foreign award was given should have reciprocal provision for enforcement of Pakistani awards. It was further urged by him that England does not have any reciprocal arrangement for the enforcement of Pakistani awards and, therefore, the requirements of the Act are not fulfilled and the award in question cannot be enforced in Pakistan. In support of the above contention Mr. A. Rauf has referred to the case of Messrs Barlas Brothers (Karachi) & Company v. Messrs Yangtze (London)
Ltd. (PLD 1959 Kar. 423) and the case of Messrs Yangtze (London) v. Messrs Barlas (Karachi) (PLD 1961` SC 573) and case of Messrs Dalmia Cement Ltd. v. National Bank of Pakistan ((1973) 3 All E L R 183).
(c) Reverting to the Karachi case, it may be observed that in the above case a Division Bench of the erstwhile High Court of West Pakistan (Karachi Bench) set aside the judgment of a learned Single Judge and held that the award given in England could not be enforced in Pakistan as Pakistan had not notified England as a Power which had made reciprocal provision and that the notification issued by the Government of India before Partition of India could not have been pressed into service as Pakistan was a separate sovereign State. The above judgment of the Division Bench was upheld I by the Supreme Court which is reverted in 1961 S. C. Mentioned hereinabove. It may be observed that after the above Supreme Court judgment, Ordinance LIII of 1962 was promulgated on 6-6-1962, whereby inter alla section 2 of the Act was amended with retrospective effect namely, w.e.f. 15-8-1947 and inter alia it was provided that for removal of doubt, it was declared that any notification issued under section 6 by the late Government of India before 15th August, 1947 and notified on that day for the purpose of enforcement of foreign awards in British India, declaring any party to the said convention or any territory to be the territory to which the contention applied, shall be deemed to be a notification by the Central Government for the purpose of enforcing foreign awards in Pakistan. In view of the above Ordinance the effect of the above 1959 Karachi case and 1961 SC case was nullified, inasmuch as the notification which was issued by the late Government of India before Partition, was made operative with retrospective effect through Legislation.
(d) It was urged by the learned counsel for the respondents that the above Ordinance violates the provisions of the Act inasmuch as it purports to enforce foreign awards of a country which does not have reciprocal arrangement for the enforcement of Pakistan awards. In support of his contention that England does not have any reciprocal arrangement for the enforcement of Pakistani award Mr. A. Rauf, the learned counsel for the respondents has referred to section 35 of the English Arbitration Act, 1950 which deals with foreign awards. It was further urged by the learned counsel that the "Russel on Arbitration" 18th Edition, p.445, which contains discussion on the aforesaid section 35, does not mention the name of Pakistan as one of the countries of which award can be enforced in England. He has also referred to the above case of Messrs Dalmia Cement Ltd. v.
National Bank of Pakistan mentioned hereinabove, in which Justice Kerr while dealing with the award arising out of the dispute between Dalmia Cement Factory Ltd., and National Bank of Pakistan was pleased to observe that His Majesty had not declared the Presidents of India and Pakistan to be the parties of the Geneva Conven--tion on the execution of foreign arbitral awards, although under section 18(1) of Indian Independence Act, 1947, section 1(1) of the Indian (Consequential Provision) Act, 1949, and section 1(I) of the Pakistan (Consequential Provision) Act, 1956 had continued in force the Arbitration (Foreign Award) No 1 Order of 1938, declaring His Majesty to be a party to the convention in relation to the territories of India and Pakistan.
It was on the basis of the above factual position that England had not made any provision for the enforcement of Pakistan awards in England, it was urged that the basic requirement of section 2 of the Act was not fulfilled and, therefore, British award cannot be enforced with the aid of the provisions of the Act.
(e) Ire my view no exception to Ordinance LIII of 1962 referred to herein above, can be taken as Mr. A. Rauf was unable to point out that the above Ordinance has violated any Constitutional Provision or was enacted by the authority not competent to enact. It is the privilege or prerogative of the Government of Pakistan to decide as to whether the award given in a particular foreign country should be enforceable in Pakistan or not notwithstanding that the country in which the award has been given as not made any reciprocal arrangement for the enforcement of Pakistan awards as contemplated in section 2 of the Act. The Government of Pakistan has expressed its intention not through a notification but it has been manifested through an enactment and, therefore. I cannot decline to enforce the instant award on the ground that, in England no reciprocal provisions have been provided for the enforcement, of Pakistan awards. It may be pertinent to mention that this aspect was adverted to in the aforesaid S. C. Of 1961, namely, Yangtza (London) Ltd. v. Barlas Brothers (Karachi) at p. 583 wherein Hamoodur Rahman, J. (as his Lordship then was) was pleased to observe as follows:- "In this connection it might also be pointed out that for determining if the conditions mentioned in section 2 of the Act have been fulfilled it is neither necessary nor proper for the national Courts to enter upon any investigation as to whether reciprocal provisions have in fact been made in the country where the award sought to be filed was made for the enforcement of awards made in Pakistan. In matters pertaining to international arrangements the Courts should act in aid of the executive authority and should neither say nor do anything which might cause embarrassment to that authority in the conduct of its international relations. Thus if the notification contemplated under the Act had been issued the national Courts would have been bound to hold that the conditions prescribed for treating an award as a foreign award had been fulfilled and would not have been entitled to go behind the notification and investigate whether reciprocal provisions did in fact also exist in the notified country."
(f) It is clear from the above-quoted para. Of the above judgment that I cannot enter upon any investigation on the question as to whether reciprocal provisions for the enforcement of the Pakistan awards have in fact been made in the country of which the award is sought to be filed in Pakistan for enforcing it. It was also observed that it is a matter pertaining to international arrangements and the courts should act in aid of the executive authority and should neither say nor do anything which might cause embarrassment to the authority in the conduct of its international relations. I cannot' question the wisdom which prompted the Government of Pakistan to cause the enactment of the aforesaid Ordinance LIII of 1962.
In view of the above discussion I hold that the award in question is a foreign award and is enforceable in Pakistan.
9. Reverting to the fifth contention of Mr. A Rauf that as the arbitrator had failed to appoint an umpire before entering into the reference and, therefore, the arbitration proceedings were illegal and consequently the award stands vitiated. Reliance was placed on By-law 3040) of the Liverpool Cotton Association By-laws (hereinafter referred to as the by-laws) which provides that such difference shall be referred to the arbitration of two disinterested members one to be appointed by each party in dispute and such arbitrator shall have power to appoint an umpire. It further provides that the umpire before giving his decision shall be acquainted with the views of the arbitrators but shall be in no way bound by their views in making his award. It may be observed that the respondents have not specifically raised the 'above plea and, therefore they cannot be permitted to raise a plea which depends on a question of fact. The petitioners were entitled to have notice of the above plea and to refute the same in their rejoinder. Furthermore, no such plea was raised by the respondents before the two arbitrators though the documents filed by the respondents show that the respondents were communicating with their arbitrator about the dispute in question. In my view any irregularity in the appointment of an arbitrator or an umpire should be pointed out at the earliest opportunity by a party who is aggrieved by such irregularity. If the party does not raise any objection about the irregularity in the appointment of an arbitrator or about non-appointment of an umpire he shall be deemed to have acquiesced to the aforesaid irregularity as to constitute estoppel against him after giving of an award. Furthermore, in the instant case the award was given by the two arbitrators unanimously and, therefore, the alleged irregularity, if any, did not affect the award in question.
10. Reverting to the learned counsel for the respondents' contention that the Arbitration Tribunal had not communicated any claim to the respon--dents and, therefore, the respondents were not given a fair opportunity to meet the petitioners' claim, it will suffice to say that the documents filed by the respondents clearly indicate that the respondents' arbitrator was corresponding with them and that they had submitted their defence to the claim. In this regard a reference can be made to the documents Nos. 11, 13, 15, 17, 18, 20, 21, 22 and 24, a perusal of which will show that it was never urged by the respondents that they had no knowledge about the petitioners' claim. In my view the respondents cannot urge that they were unaware of the petitioners' claim. The petitioners' case was that the respon--dents had committed breach of the two contracts by not supplying the contracted goods and, therefore, the respondents were liable to pay damages for the breach of the contracts. The question as to how much amount the petitioners were entitled to recover on account of the above breach was to be determined by the arbitrators who were experts in the cotton trade.
11. (a) Reverting to the 7th contention of the learned counsel for the respondents that the Arbitration Tribunal had committed misconduct inasmuch as it had not decided the real issue and had not taken into consideration the respondents' case, it may be observed that in support of the above contention Mr. A. Rauf has drawn my attention to para 4 of the award which narrates the respondents' plea that there was no concluded contract. His submission was that without deciding the above plea which was the basic issue, the arbitrators proceeded in awarding the amount of damages in para 6 of the award. In support of the above contention Mr. A. Rauf, the learned counsel for the respondents has referred to the case of Haji Habib Haji Pir Mohamad v.
Bhikamchand and Jankilal Shop and others (AIR 1954 Nag. 306), the case of Khiaram v. Lalchand Hiranand (AIR 1930 Sind 103).
(b) In the former case (i. e. 1954 Nag.) it was held that the arbitrator is not required to give his award point by point raised by the parties. However, where the defendant raised a specific issue about the legality of the contract of agency between the parties that issue was one of the matters in dispute and the arbitrator should have decided the same.
(c) In the second case of 1930 Sind, the dispute was between the partners. It was referred to the arbitration. The question in issue before the arbitrator was as to who was entitled to use moulds.
The arbitrators instead of deciding the above issue ordered that both the parties should use the moulds. It was held by the Sind Chief Court that the award was bad because of the technical misconduct on the part of the arbitrators inasmuch as they did not decide the real question in issue between the parties.
(a) In my view the above two cited cases are not applicable to the instant case inasmuch as that by awarding damages for the breach of the contracts, the arbitrators have held that the two contracts in question were legal and binding on the parties. The mere fact that they have not expressly said so in the award would not make any difference. In the case of Muhammad Saghir Bhatti & Sons v. Federation of Pakistan and another (PLD 1958 SC (Pak.) 221), it was held by the Supreme Court that an arbitrator is not bound to state his reasons for the award. Furthermore, in the case of Messrs Pakistan Builders C., Karachi v. Pakistan (PLD 1961 Kar. 365), A. S. Farooqui, J.
Was pleased to hold that an arbitrator is not bound to give reasons for his decision nor he is bound by any technical rule or procedure and that he need not record separate findings on the points on which the parties are at issue and that what is to be seen is as to whether the arbitrator has given an intelligible award which determines the rights of the parties in relation to the subject-matter of the reference. In the instant case, it cannot be urged by the respondents that the award given by the arbitrators is not intelligible nor it can be contended that it does not decide the dispute between the parties. As pointed out by me earlier that the question before the arbitrators was as to whether the respondents were liable to pay damages for the breach of the two contracts or whether they were not liable inter alia on the ground that there were no concluded contracts. By holding that the respondents are liable to pay damages for the breach of the contracts, the arbitrators in fact held that there were concluded and enforceable contracts.
12. (a) Referring to the learned counsel for the respondents' 8th conten--tion that the arbitrators while awarding the amount of damages have not given the basis upon which the same have been granted, it may be observed that a perusal of the award shows that the arbitrators have given the basis in para 6 of the award upon which the amount has been calculated. Even otherwise, there is no legal requirement that the arbitrators should give the basis of the calculation of the amount of damages. In this regard reference can be made to the case of Messrs Moosa Umer & Co. Ltd., Karachi v. Messrs H. E. Dossa & Co. Ltd. Arid another (PLD 1971 Kar. 899), wherein inter alia it was urged that the arbitrator committed misconduct inasmuch as he awarded damages for the breach of contract of sale on the basis of re-sale price instead of on the basis of the market rate on the date of the breach. The above contention did not find favour with their Lordships of the Division Bench and it was held that at the most it would constitute a technical defect. Their Lordships were pleased to refer to the case of Mahindra Sing v. Kamla Singh Dar and another (AIR 19441' C 83), wherein their Lordships of the Privy Council were pleased to observe as follows :-.
"True the decision he gave was not one that a Court may have given, nor was it one that perhaps would have been given by an arbitrator who was also a lawyer, but for better or worse they chose to submit their dispute to a relative whom they trusted and who was not a lawyer, and he has given just the sort of the award that might be expected from a lay arbitrator in the circumstances in their Lordships opinion there is no ground for impugning the validity of this award and they will humbly advise His Majesty that this appeal should be dismissed with costs."
Relying upon the above dictum of the Privy Council their Lordships of the Division Bench in the aforesaid Karachi case of 1971 were pleased to hold that even though the petitioner had not awarded damages upon the settled principle of law the award cannot be challenged on the ground of the legal misconduct.
(b) It was also urged by Mr. A. Rauf in continuation of his above contention that there was no evidence before the arbitrators on the question of the market price on the dates of the alleged breach of the contracts. It may be observed that the respondents have not raised any such plea in their objections to the petition. Be that as it may, it is an admitted position that the two arbitrators in question were experts in the cotton business being members of the will reputed Liverpool Cotton Association Ltd., England. They were to act as the arbitrators under the by-laws of the Association for the reason that they were experts in the cotton trade. The market price of the cotton on the material dates must have been within their knowledge and, therefore, even if it is to be conceded (for which there is no basis to infer) that there was no evidence before the arbitrators on the question of the market rates, in my view the arbitrators being the experts could rely upon their expert knowledge on the question of the market rates. In this regard reference can be made to the case of Bijoy Sing v. Bilasroy & Co. (AIR 1952 Cal. 440), wherein a Division Bench of the Calcutta High Court quoted with approval a passage from 55 C W N 147 at page 157, wherein it was held that when the arbitrators who are experts in the trade can decide the matters which are within their experts knowledge without evidence but the disputed question of fact cannot be decided evidence. The above ruling supports the view which, I am inclined to take.
13. (a) Reverting to the last contention that the award is illegal as the arbitrators have awarded interest in the absence of an agreement to that effect between the parties. In support of the above contention Mr. A. Rauf has referred to section 7(1), clauses (c) and (e) of the Act which provide that in order to make a foregoing award enforceable, it must have been made in conformity with the law governing arbitration procedure and that it should have been in respect of the matter, which may lawfully be referred to arbitra--tion, under the law of Pakistan and should not be contrary to the policy or law of Pakistan. It was urged that as in Pakistan the arbitrators are not entitled to grant interest in respect of the period prior to the award in the absence of an agreement, the award in question is hit by the above provision of the Act. In support of his contention that an arbitrator had no power to grant insterest, Mr. A. Rauf has referred to the case of Messrs A. Z. Company v. Messrs Mould Bux Muhammad Bashir (PLD 1965 SC 505), the case of Province o/' West Pakistan: v. Messrs Asghar Alt (PLD 1968 Kar. 961) and the case of Paracha Textile Mills Ltd. v. Manikram Chamandas (PLD 1977 Kar. 37).
(b) In the aforesaid Supreme Court case of 1965, it was held that the arbitrator acting under the Karachi Cotton Association By-laws were not competent to grant interest for the period to the date of the award in the absence of an express or implied contract or of usage of trade to the contrary.
It was further held that the Karachi Cotton Association By-law 162 empowers an arbitrator to award interest from the date of the award and as such the arbitrators acted within their power in granting future interest on the amount of damages awarded by them.
(c) Referring to the Karachi case of 1968, it may be observed that a Division Bench of the erstwhile High Court of West Pakistan (Karachi Bench) while construing the provision of section 80, Negotiable Instruments Act and section 1 of the Interest Act, 1839, was pleased to hold that interest can only be granted when there is a stipulation for it or where there is no stipula--tion where mercantile usage is pleaded or where interest is payable under any statute for example under section 80 of the Negotiable Instruments Act.
(d) Referring to 1977 Karachi case, it will suffice to observe that in the above case the arbitrator granted interest from the date of the award. The objection to the grant of interest was rejected by a learned Single Judge of this Court and reliance was placed on the aforesaid Supreme Court case of 1965.
(e) The ratio decidendi of the above Supreme Court case is that an arbitrator is competent to grant interest if it is so provided in the agreement or under any law or by-law. It may again be noticed that on the basis of By-law 162 of the Karachi Cotton Association, it was held by the Supreme Court that as the above by-law empowers the arbitrator to award interest from the date of the award the interest in respect of the period subsequent to the award was legal but interest for the period prior to the date of the award was not legal. It was also observed that it was for the Karachi Cotton Association to provide a by-law covering the period prior to the date of the award.
In the instant case the arbitration had taken place under the Liverpool Cotton Association By-laws.
By-law 3 provides that every contract which may be subject to by-laws and/or rules of the Association or subject to Liverpool Arbitration is to be considered and given effect to as a contract made in England and in accordance with the Laws of England and is to be deemed in all respects save as provided in para 4 to be subject to these by--laws and rules of the Association etc. The two contracts in question provided that the contracts were subject to the rules and regulations of Liverpool Cotton Association Ltd., Liverpool, England, By-law 312(2) of the by-laws in question provides that arbitrators or umpire hearing the appeal may be if he thinks fit award interest on the whole or any part of any sum awarded for the whole or any part of the period between the date of the breach of contract or the date on which the cause of action on which the award is based arises and the date of the award and also interest on the amount of the award from its date to the date of payment thereof. In view of the above by-law, it cannot be urged that the two arbitrators in the instant case had no power to grant interest. As a matter of fact the aforesaid 1965 SC case quoted hereinabove, supports the present award inasmuch as in the above case the granting of interest by the arbitrator of the Karachi Cotton Association for the period from the date of the award was upheld by the Supreme Court on the basis of By-law 162 of the Karachi Cotton Association By-laws.
It was also observed that it was for the association to provide a by-law for awarding interest for the period to the date of the award.
(f) Mr. Hasnain, the learned counsel for the petitioners has drawn my attention to para 580 at page 303 of the Halsbury's Laws of England, Vol. III, IVth Edition, wherein it has been stated that an arbitrator or umpire has rower to award interest on the amount of any debt or damages for the whole or part of the period between the date when the cause of action arose and the date of the award. Reference has been made to the provisions of Law Reforms (Miscellaneous Provision) Act, 1934, and to its amendment under the Administration of Justices Act, 1969.
In my view in the presence of an express provision in the form of by-laws of the Association, namely, By-law 312(2) referred to hereinabove, there is no need to refer to Halsbury's Laws of England on this point. For the foregoing reasons the last contention of the learned counsel for the respon--dents also fails.
14. Before parting with the above discussion I may observe that most of the contentions advanced by the learned counsel for the respondents do not strictly fall within the scope of section 7 of the Act but since the same were canvassed at the Bar I have dealt with the same.
In view of the above discussion I grant the present petition and order that the award be filed and I accordingly pronounace the judgment in terms of the said award, but there will be no order as to costs of this petition.