GULZAR AHMAD, J.--- This is an application under Sections 4, 5 and 6 of the Arbitration (Protocol and Convention) Act, 1937 for making a foreign award the rule of the Court.
The brief facts of the matter are that the defendant has chartered plaintiff vessel "Iran Abad" vide charter-party dated 25.1.1996 on an amended Gancon for carrying cargo of minimum of 13.000 metric tons of rice from Karachi to Jakarta Indonesia as per terms and conditions set forth in the said charter-party which also contained arbitration clause 41 as follows:- "Clause 41. -- In the event of any dispute, both parties will endeavor to resolve matter amicably. If Arbitration is necessary then same to be held in. London with each party appointing one. Arbitrator and the two so appointed to appoint an umpire. English Law to apply."
It is stated that the charter party was acted upon which gave rise to dispute and plaintiff making claim which was not paid by the defendant. The plaintiff, therefore, invoked the arbitration clause through its letter dated 11.8.1999 and notified that Mr. Robert Gaisford as Arbitrator appointed by it and called upon the defendant to appoint its Arbitrator. The defendant however, failed to make the appointment. A second and final notice dated 26.8.1999 was sent by the plaintiff to the defendant calling it to make appointment of its Arbitrator within 7 days, falling which the Arbitrator appointed by the plaintiff will enter reference and decide the matter as a sole Arbitrator under Section 17 of the English Arbitration Act, 1996. The defendant still did not appoint its Arbitrator. The plaintiff thereupon requested its Arbitrator to proceed as a Sole Arbitrator and the said Arbitrator initiated the Arbitration proceeding. It is stated that the plaintiffs as well as the Arbitrator repeatedly asked the defendant to appear and produced its defence but the defendant failed to appear before the Arbitrator and to produce its defence. A peremptory order dated 19.10.1999 was passed by Arbitrator allowing the defendant to file its defence by 26.10.1999 failing which the matter would be decided on the basis of the record made available to the Arbitrator. Still the defendant did not file its defence before the Arbitrator. The Arbitrator then proceeded with the arbitration, examined the evidence produced by the plaintiff and thereafter gave a Final Award dated 15.11.1999 in favour of the plaintiff in the sum of US$ 177,928.46 plus interest at the rate of 7.5% per annum, prorata compounded at quarterly rest from the date of award till payment. A sum of pounds sterling 1.350.00 plus interest at 7.5% per annum prorata compounded at quarterly rest from the date of payment by the plaintiff till date of reimbursement as full cost of Arbitration. Upon the making of the award the solicitors of the plaintiff called upon the defendant to make payment of the award amount but the defendant failed to do so. Consequently, the suit therein has been filed for making the foreign award rule of the Court. The defendant has filed its objection to which the plaintiff filed its reply. Learned counsel for the parties have submitted their respective note of arguments, I have considered the arguments of the learned counsel and have gone through the record.
The first submission of the learned counsel for the defendant is that in terms of Section 2 of the Arbitration (Protocol and Convention) Act, 1937 (to be called the Act), Pakistan is not a party to the convention as notification in that respect has not been issued nor it is shown that reciprocal arrangement under the protocol has been made by Government of England and that Section 2(2) of the Act does not remedy this defect. On the other hand, learned counsel for the plaintiff has submitted that while dealing with foreign award under the Act, only objections that are available to the defendant are enumerated in Section 7 of the Act and in this respect has relied upon the case of M/s. European Grain and Shipping Ltd. Vs. M/s. Polycham Company Ltd. (PLD 1990 Kar. 254), A.
Merdith Janes Co.
Ltd. Vs. Crescent Board Ltd. (1999 CLC 437), Petrocon (Pvt.) Ltd. Vs. Hyderabad Development Authority, Hyderabad (1990 M LD 1675) and Raffi Brothers and Coney Ltd. Vs. Muhammad Ameer Muhammad Bashir Ltd. (1987 CLC 83).
It may be observed that though notification in terms of clause (b) of sub-section (1) of Section 2 of the Act was not issued but by Ordinance (LIII of 1962), sub-section (2) was added to Section 2 which declared that any notification issued under this section by late Government of India before the 15th day of August, 1947 and in force on that day for the purpose of enforcement of foreign awards in British. India declaring any power to be a party to the said convention or any territory to be the territory to which the convention applies shall be deemed to be a notification issued by the Federal Government for the purpose of enforcement of foreign awards in Pakistan. This very aspect of the matter came to be considered by this Court in the case of Nan Fung Textiles Ltd. Vs. H. Pir Muhammad Shamsuddin (PLD 1979 Kar. 762) wherein it was dealt as follows:--
(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 by the Supreme Court which is reported 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 alia 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 convention 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 S.C. 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) (e) In my view no execution to Ordinance (LVIII of 1962) referred to hereinabove, 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 has 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 provision 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, Yangtze (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 not 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 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."
The rule laid down as above was also followed by this Court in the case of Cogetex S.A. Vs. Mayfair Spinning Mills Ltd. (2004 CLD 1023).
2. As regards the second submission of the learned counsel for the defendant that the plaintiff claim before the Arbitrator was time-barred as the charter-party was a contract of affreighment as provided in the Carriage of Goods by Sea Act (British) and claim rough to have been made within one year from discharge of cargo. Reply of the learned counsel for the plaintiff is that the claim in question will be governed by Section 5 of Limitation Act (English) which provides period of six years for filing of claim from the date of cause of action and not the limitation period provided in the Carriage of Goods by Sea Act (British). It may be noted that the relevant provision referred to by learned counsel for the defendant is contained in Article III, Rule 6 to the Schedule of the Carriage of Goods by Sea Act, 1971 which provides that if action is not brought within one year of delivery of good or the date when they should have been delivered, the carrier is discharged of all liabilities. Article IV, Rule 1 of this Act provides that defences and limits of liability provided for in these Rules shall apply in any action against .Carrier in respect of loss for damage to goods covered by a contract of carriage whether the action founded in contractor in tort. The rules laid down in this Act deals with carrier's liability in respect of loss or damage to goods covered by a contract of carriage. The case in hand is not of carrier's liability in respect of loss or damage to goods but is between the parties to charter-party and is in respect of shifting expense, freight, demurrage etc. Arising out of a charter-party.
3. On the other hand Section 5 of the Limitation Act, 1908 which is an English Act provides that an action founded on a simple contract shall not be brought after the expiration of six years from the date of which the cause of action accrued. In the present case the charger-party is a simple contract and is dated 25.1.1996 and the plaintiff gave notice of appointment of Arbitrator on 11.8.1999 and the award was given on 5.11.1999. It is clear that the plaintiffs claim was not time- barred.
4. As regards the third submission of the learned counsel of the defendant that the suit is not maintainable as the award filed is not duly authenticated. In this respect the learned counsel for the defendant has referred to the provision of Section 8(1) of the Act and Rule 297 of the Sindh Chief Court Rules (O.S.) and has submitted that the award is liable to be returned under sub-Rule (2) of the same Rule. Sub-section (1) of Section 8 of the Act provides that the parties seeking to enforce a foreign award must produce the original award or copy thereof duly authenticated in manner required by the law of the country in which it was made. Rule 297(1) of the Sindh Chief Court Rules inter alia provide that the parties seeking to enforce a foreign award shall produce with his petition.
The document specified in Section 8(1) of the Act and where such document is in foreign language a translation thereof into English certified in the manner prescribed in sub-section (2) of the said Section 8. The perusal of these provisions shows that the parties seeking to enforce a foreign award must produce the original award or copy thereof duly authenticated in the manner required by the law of the country in which it was made. Thus the party has to either produce the original award or authenticated copy of the award in the manner as provided in it. In the case in hand, the Plaintiff has filed the original award as Annexure 'A' to the application which fact is not disputed. The only objection is that the plaintiff has not filed the authenticated copy of the award. In my respectful view, the provision of Section 8 of the Act provides for producing either the original award or its authenticated copy. By producing the original award, the plaintiff has fulfilled the condition laid down in Section 8 of the Act.
5. As regards the next submission 'of the learned counsel for the defendant that the Arbitrator had no jurisdiction or that it is contrary to the law and public policy in Pakistan and that the Arbitrator is guilty of misconduct. It may be noted that the defendant in the first place did not defend the proceeding before the Arbitrator and consequently did not took the objection that the Arbitrator had no jurisdiction to Arbitrate in the matter.
Secondly, no reason is assigned for questioning the jurisdiction of the Arbitrator. The existence of arbitration clause in the charter-party, dispute having arisen, notice of dispute, appointment of Arbitrator, making of claim to Arbitrator and Arbitrator issuing various notices, fax and letters to the defendant who choosing not to defend and award being given are not disputed. There is a bare assertion of the defendant in its objections that the award is without notice to it but the notices, letters and fax of various specific dates as mentioned in the award are not denied to have been received by the defendant. In arguments, the plea of award being without notice is even not raised by the defendants counsel. Bare assertion that the Arbitrator had no jurisdiction to arbitrate is not sufficient unless some plausible ground is given to substantiate this plea. No material in this respect is urged before me. Similar is the case with regard to the objection that the award is contrary to law and public policy of Pakistan. No law or public policy is cited before me to show that the award violates them.
6. As regards the argument with regard to misconduct by the Arbitrator, it may be noted this it is based upon the merit of the award. It is already noted above that the arbitration agreement between the parties was subject to the English Law and the question as to whether the Arbitrator has misconducted is squarely within the domain of the Appellate Court in England. Before me application is made for the enforcement of the award and not to examine the merits of the case on which award is made. In any case this objection is beyond the scope of Section 7(2) of the Act. The other submission that the Court can examine misconduct by Arbitrator on the basis of Section 7(3) of the conditions specified in clauses (a), (b) and (c) of sub-section (1) or existence of conditions specified in clauses (b) and (c) of sub-section (2). The precise of objection of the defendant is that the Arbitrator has failed to give effect to clause 21 of the charter-party inasmuch as he has given award not only of shifting expense of the vessel from one berth to another at Karachi Port but has also awarded for the time spent in doing so while the said clause specifically provided "if second berth used either end, shifting expenses on charters' account but time for owners account". The other objection is that the Arbitrator has awarded demurrage incurred at Indonesia without ascertaining the actual cause of incurring of demurrage nor there was evidence to account for the delay.
7. So far the first objection is concerned, suffice to note that the plaintiff claim before the Arbitrator was in respect of shifting expense only and the Arbitrator has awarded this expense by specifically referring to expenses towards pilot age, tug and launch services. There is no word in the award regarding claim of time spent and no award is made on it. As regards the other objection, in my respectful view, it has to do, with the merit of the case. This Court while considering the enforcement of award merely acts as an executing Court and while doing so it cannot go behind the award and sit as an Appellate Court and make reappraisal of evidence. Admittedly the award could have been challenged by way of an appeal in the High Court of England. This was not done.
Consequently, the defendant by its own conduct allowed it to become final in terms of clause (d) of Section 7(1) of the Act.
8. For the foregoing reasons, I find no merits in the objection of the defendant. There is nothing to show that the award does not fulfil the conditions as provided in Section 7(1) of the Act or there is anything to the satisfaction of the Court in terms of Section 7(2) of the Act that the award is not enforceable. The award is, therefore, made rule of the Court.
Award Made Rule of Court.