Through this common judgment, I intend to dispose of J.M. No.21 of 2004 and Suit No.1232 of 2004 as the award impugned in J.M. No.21 of 2004 is sought to be made rule of the Court in Suit No.1232 of 2004. The facts as they appear from the pleadings of the J.M. No.21 of 2004, the applicants have challenged the award, inter alia, on the ground that the President, Federation of Chambers of Commerce and Industry appointing Arbitration Tribunal had no authofity to constitute the said Tribunal in purported exercise of powers conferred on him under the Resolution dated 1-1-2003 of the Managing Committee of the Federation.
2. According to Mr. Khalid Javed, section 12(1) of the Trade Organizations Ordinance, 1961 (hereinafter referred to as "the Ordinance") provides the Federation of Chambers of Commerce and Industry (hereinafter referred to as "FPCCI") to constitute Arbitration Tribunal comprising of not less than three and more than five members to resolve any dispute between the members, which included the election dispute.
3. It appears that under section 12(1) of the Ordinance, the Federation has framed rules with the approval of the concerned Ministry, section 4 of the said rules speaks of the constitution of a Arbitration Tribunal comprising of members, not less than three or more than 5 in number, to be appointed by the Managing Committee of the Federation. The powers of the Managing Committee are provided under Article 19 of the Memorandum of Articles of Association of FPCCI.
4. Article 19(1) provides that the Managing Committee may appoint any number of sub- committees or special committees, standing committee or expert committees to deal with problems relating to any particular trade or industry on any issue having a bearing on trade, commerce, industry and economy of Pakistan and Azad Jammu and Kashmir. Article 19 consists of ten Sub-Articles. These Sub-Articles further elaborate the powers of the Managing Committee.
5. It has been submitted by the learned counsel for the applicants that Abdul Ghafoor Sajid, applicant No.2, had contested elections for the office of Chairman (Central) of Pakistan Carpet Manufacturers and Exporters Association, Applicant No.1, whereas Aamer Gul Agha, Applicant No.D.3, contested the elections for the office of Vice-Chairman, (Southern) Circle and Shahid Rasheed Malik, Applicant No.4 was member of Election Commission. Learned counsel contends that the Applicants Nos.2 and 3 were declared elected, which elections were approved by the General Body. The respondents, however, had challenged the elections and a Arbitration Tribunal was constituted by the President of the FPCCI to resolve the issue between the parties. The learned counsel further contended that the very constitution of the Arbitration Tribunal by the President, FPCCI, was without jurisdiction inasmuch as the Managing Committee under its Memorandum of Articles of Association did not have the authority to delegate their powers to anyone or more persons in the manner it has been done. The learned counsel for the applicants has submitted that the Managing Committee instead of constituting/appointing the Arbitration Tribunal in terms of Article 19 of the Memorandum of Articles of Association has delegated the authority to the President and the office-bearers of the FPCCI, which Article 19 does not permit.
6. His alternate contention was that the Arbitration Tribunal was not appointed by the President in consultation with the office-bearers in terms of the resolution of the Managing Committee, instead the President unilaterally appointed the Arbitration Tribunal, which has given the impugned award without consulting the office-bearers, which is untenable.
7. The learned counsel has placed on record the Resolution dated 1-1-2003 of the Managing Committee besides the different orders passed by the President appointing the Arbitration Tribunal. The learned counsel contended that any award by such a Tribunal, which is constituted against the language of the statute/resolution is nullity even if objections to the award were not filed within 30 days of the notice of filing of the award. He submitted that the applicants Nos.2 and 3 were not party to the award though they made applications to the Arbitration Tribunal to be impleaded as party to the Arbitration proceedings and their request was turned down.
8. He further contended that the applicants did not have notice of the award being filed in the Court, therefore, they had no notice to the date on which award was filed in Court. According to the learned counsel of the applicants, they acquired knowledge through their counsel, who was present in Court in connection with some other matter that the impugned award has been sought to be made rule of the Court. On acquiring such knowledge, the applicants filed present proceedings. He contended that if the impugned award is made rule of the Court, the applicants Nos.2 and 3 who are the elected office-bearers would suffer and therefore, their right to object to the impugned Award is available. On the analogy of the principle laid down in the case of H.M. Saya and others v. Wazir All Industries Ltd. reported in PLD 1969 SC 65, he submitted that the impugned award, which is sought to be made rule of the Court is liable to be challenged.
9. As against this, Mr. S. Abid Shiraz', learned counsel for the respondents submitted that the applicants, in law, have no locus standi to file these proceedings as they were not party to the arbitration proceedings. His next contention was that the Arbitration Tribunal was properly constituted and he in support of his contention has relied upon Article, 29 of the Memorandum of Articles of Association of FPCCI. He further submitted that the Suit No.1232 of 2004 has been filed in this Court to seek the impugned award to be made rule of the Court, which suit is pending in this Court and objections to the impugned award, if any, could have been filed by the applicants in the said suit. He contended that instead of filing objections to the impugned award in Suit No.1232 of 2004, the applicants have chosen to file these proceedings impugning the same award, which are not maintainable in law.
10. I have heard both the learned counsel. The basic question in these proceedings is as to whether if an award, which is objected to, on the basis of lack of jurisdiction, is filed in the Court to be made rule of the Court and no objection is made or filed against such award by the parties on the ground of non-service of notice or want of knowledge of such award being filed in the Court, the Court, without examining the legality of the impugned award, is obliged to make it rule of the Court.
Normally, in such eventuality after issuance of notices to the parties the award is made rule of the Court. But once it is brought to the notice of the Court that the Arbitration Tribunal, which has given the award, had no authority, in law, to conduct arbitration proceedings in such matter, the Court is obliged to examine the legality of such issue besides the authority of the Tribunal which has given the award irrespective of the ground whether objections to the award were filed by the parties within 30 days or not. The Courts cannot overlook the legality of an Arbitration Tribunal, which has given the award under the garb that the parties have not filed objections to such an award within 30 days and, therefore, the award be made rule of the Court.
11. I am also not persuaded by the arguments of the `learned counsel for the respondents, that the applicants Nos.2 and 3, in law, had no authority to challenge the impugned award as they were strangers to the arbitration proceedings. If the impugned award is made rule of the Court, the applicants Nos.2 and 3 would be adversely effected as the findings of the Arbitration Tribunal pertained to the elections of Federation, which, included the elections of applicants Nos.2 and 3 and, therefore, their right to challenge such award even if they were strangers to the arbitration proceedings cannot be taken away. Where there is a wrong there is remedy for the wrong and in this case the principles laid down by the Honourable Supreme Court in the case of H.M. Saya (supra) would fully apply.
12. I have also examined the provisions of section 12 of the Ordinance, which bars filing of suit between the members in respect of issues covered therein. Therefore, any suit even if filed, would not restrict this Court from passing an order in terms of sections 15 to 18 of the Arbitration Act, 1940. I have also examined the provisions of section 4 of the Rules framed under section 12 of the Ordinance and Article 19 of the Memorandum of Articles of Association of FPCCI, which pertained to the powers of the Managing Committee. There is no provision under Article 19, empowering the Managing Committee to delegate its powers to any person to appoint Arbitration Tribunal. The Resolution dated 1-1-2003 of the Managing Committee authorizing the President and the office-bearers of the Federation to appoint Arbitration Tribunal was unauthorized. Article 19 of the Memorandum of Articles of Association does not permit the Managing Committee to delegate its functions to any person in such manner.
13. For the aforesaid reasons, I am clear in my mind that Article 19 of Memorandum of Articles of Association of FPCCI never authorized the Managing Committee to pass resolution dated 1-1-2003 delegating its powers to the President and office-bearers of the Federation to appoint. Arbitration Tribunal, which has passed the impugned award. The impugned award having been passed against the language of the Ordinance and violative of section 4 of the Rules read with the Article 19 of the Memorandum of Articles of Association, is nullity in the eye of law and is set aside.
14. The Suit No.1232 of 2004, which is filed by the Arbitration Tribunal to make the impugned award as rule of the Court for the aforesaid legal defects cannot be made rule of the Court and as a result of the aforesaid reasoning is also dismissed. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.