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PLD 2006 Lahore 314

WATER AND POWER DEVELOPMENT AUTHORITY, WAPDA HOUSE, LAHORE

CitationPLD 2006 Lahore 314
CourtLahore High Court
Judge(s)Sayed Zahid Hussain
ResultAppeal dismissed

' SYED ZAHID HUSSAIN, J.---The dispute having arisen between the parties was referred to arbitration of two arbitrators nominated by the parties who gave their award dated 30-7-2002. The respondents Nos. 1 and 2 made an application under section 14(2) and section 17 of the Arbitration Act, 1940 for making the same a rule of Court whereas the appellants filed objections seeking the setting aside of the award. By means of order dated 27-3-2004, the objections were dismissed whereas the award was ordered to be made rule of Court by the trial Court. This is appeal under section 39 of Arbitration Act, 1940 thereagainst.

2. The order of the trial Court is sought to be assailed primarily on the ground that since the arbitrators had failed to render their award within the statutory period of four months, the same was invalid and that the award was liable to be set aside as the arbitrators had committed misconduct in non-considering the necessary documents while rendering the award. The learned counsel relies upon Ghulam Abbas v . Trustees of the Port of Karachi PLD 1987 SC 393; Ghasilal Todi v. Biswa nath Kerwal and others AIR 1964 Cal. 466; Messrs Bombay Ammonia Pvt. Ltd. v. Union of India AIR 1987 Delhi 148; Kuldip Kumar Suri v. Delhi Development Authority and others AIR 1995 Delhi 82.

' The learned counsel for the respondents on the other hand supports the order passed by the trial Court and contends that the findings on the respective issues recorded by the Court are amply justified by law inasmuch as that the parties had been taking part in the proceedings before the Arbitrators and they were estopped to raise objections later on. It is contended that the award is based on due consideration of all the relevant facts which contains reasons and has rightly been ordered to be made a rule of Court by the trial Court. Places reliance upon WAPDA and others v.

Messrs Khanzada Muhammad Abdul Hague Khan Khattak and Co. PLD 1990 SC 359, Lahore Development Authority v. Messrs Khalid laved & Co. 1983 SCM R 718, Ashfaq Ali Qureshi v. Municipal Corporation, Multan and another 1985 SCM R 597 and Zakaullah Khan v. Government of Pakistan through Secretary Buildings and Roads Department, Lahore PLD 1998 Lahore 132.

3. The respective contentions have been considered in the light of the material on the record.

Insofar as the challenge to the award on the grounds, of limitation that the same was rendered beyond four months time therefore, it was invalid is concerned, it does not hold good in view of the fact that both sides had continued to take part in the proceedings before the arbitrators and did not raise any objection whatsoever to the continuation of the proceedings beyond the period of four months. Their conduct amounts to waiver and acquiescence, in WAPDA and others v. Messrs Khanzada Muhammad Abdul Hague Khan Khattak and Co. (supra) such an objection to the award was repelled by the Hon'ble Supreme Court by observing that "Reading section 3, implied Condition No,3 in the First Schedule to the Arbitration Act and section 28 thereof together, the position of law appears to be clear that the parties are free to enlarge the time for making the award with their mutual consent as with the consent of all the parties, a term can be incorporated in the arbitration agreement giving powers to the arbitrator to enlarge the time for making the award. By Condition No,3 in the First Schedule, statutorily an implied term is incorporated in the agreement that the award shall be made within four months after entering upon the reference. By this statutory provision, the term is to be taken as an integral part of the arbitration agreement and is subject to alteration with the consent of the parties like any other term of a contract. If that were not the intention of the Legislature, section 28(2) would not make valid a provision in the arbitration agreement empowering the arbitrator or arbitrators to enlarge the time for making the award with the consent of the parties. If the parties after the expiry of the four months submit themselves to the jurisdiction of the arbitrator and take part in the proceedings enabling him to make an award, it cannot be said that the arbitrator acted without jurisdiction. In such a contingency, the principles of waiver and estoppel would apply with full force. The appellant thus cannot succeed on this point as the finding recorded by the trial Court qua issue No,5, is consistent with the law on the subject.

The reliance of the learned counsel for the appellant upon the precedents cited by him in view of the Supreme Court judgment referred to above, is inapt.

4. In order to examine the tenability of objections to the award I have perused the award as also the record of the trial Court. It appears that after the award was rendered by the arbitrators (who were nominees of each of the parties) a completely new case was sought to be set up through the objection petition. The learned trial Court however, framed several issues, onus whereof was upon the appellant. Muhammad Naeem, Executive Engineer (0.W.1) was produced by the appellants who had candidly stated that he did not appear before the arbitrators. The worth of his statement thus is quite understandable. No other evidence was produced before the Court. Suffice it to observe that the Court while considering objections qua an award is not supposed to sit as a Court of appeal over the award rendered by the arbitrators and is expected to lean as far as possible in favour of upholding the award in view of the consistent view of the superior Courts. Reference in this context may be made to Zakaullah Khan v. Government of Pakistan through Secretary Buildings and Roads Department, Lahore PLD 1998 Lah.

132. The perusal of the award in this case shows that the arbitrators have attended and adverted to all aspects of the matters while considering the respective stances of the parties and rendered the award, which contains adequate reasoning for their conclusions. Mere bald assertion that the arbitrators committed misconduct cannot be entertained without there being any cogent evidence and proof, to that effect. As mentioned above no evidence in support of the objections to the award worthy of credence had been produced by the appellant. It may be observed at this juncture that in Lahore Development Authority v. Messrs Khalid Javed & Co. 1983 SCM R 718 it was observed that "it was a matter of some regret that when an award is given by the Arbitrators, who are persons of their own choice and the award made is in a proceeding conducted in a forum desired by them but which is not wholly in accord with their point of view the Department of Government concerned instead of accepting the said award with good grace rushes to the Court with frivolous objections to prevent it from becoming the rule of the Court and when these objections are overruled resort is taken to filing appeal upon appeal right up to the Supreme Court which not only results in further financial loss to the Department and further delay in the settlement of the rightful claim of the private party but also in the unnecessary waste of the valuable time of Courts which could be spent far more usefully in attending to other more meritorious cases".

In the facts and circumstances of the case I have not been able to persuade myself to interfere with the order passed by the trial Court. The appeal is accordingly dismissed with no order as to costs.

Cited by 2 cases

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