' MUHAMMAD AMJAD IQBAL QURESHI, J.-The instant C.M. Has arisen out of Civil Suit No,205 of 2008, titled as "Messrs Adaptive Solutions v. Messrs Utility Stores Corporation", under section 20 of the Arbitration Act, 1940, which is pending adjudication before this Court.
2. Facts as reflected from the contents of instance C.M. Are that in the said civil Suit Mr. Justice (Rtd.) Zia Mahmood Mirza as appointed as sole Arbitrator for making an award, according to the claims of the parties. The said arbitrator, vide letter dated 5-5-2004 sought time for filing of award and informed the learned Civil Court that evidence stood recorded, documentary evidence had been produced, arguments of the parties had been heard, but he even after issuance of repeated remainders, failed to file the award. Therefore, the plaintiff/applicant submitted an application for revocation of the authority of the said learned Arbitrator and for appointment of new Arbitrator.
According to the applicant, no such word "De novo" was mentioned in the said application.
Thereafter, Mr. Justice Muhammad Muzammil Khan, Judge (Rtd.) was appointed as sole arbitrator on the written settlement submitted by the parties, vide order dated 3-7-2008, for conducting de novo arbitration proceedings on all legal and factual matters pertaining to the agreement dated 27-6-1996. Subsequently, the petitioner submitted an application for taking up the proceedings from the stage where the proceedings were left by the former Arbitrator. Mr. Justice (Rtd.)
Muhammad Muzammil Khan in his order dated 18-1-2009 accepted the fact that both the parties had filed pleadings, led oral evidence and proceedings were complete, but he is bound by the direction contained in order dated 3-7-2008 passed by the honourable Chief Justice to the effect that de novo proceedings shall be conducted.
' In response to the notice, the learned counsel for respondent filed the reply to the instant C.M.
Contesting and controverting the pleas taken by the petitioner.
3. Learned counsel for the petitioner/ plaintiff has referred section 12 of the Arbitration Act, 1940 and contended that it has been laid down in the said section that when a new Arbitrator is appointed after replacing the earlier one, he enjoys the like powers to act in the reference and to make an award in the manner as he has been appointed in accordance with the Arbitration Agreement. He argued that the parties have led their oral evidence, cross-examined their witness and filed their documentary evidence, now at this stage after lapse of almost 11 years, it is inconvenient and impossible for the parties to lead the evidence and to file the documents, which they have already filed. The order for de novo proceedings is against the norms of justice, equity and established principles of law and procedure. The word "de novo" was made part of the orders passed by the honourable Chief Justice, Islamabad High Court on the basis of joint request made by the parties, which was the result of fraud and misrepresentation. That due to the word "De novo" the arbitration proceedings cannot be finalized within the stipulated period, as more than 10 months have already elapsed, which is a clear violation of statutory period of 120 days, as given in the Arbitration Act, 1940. Reliance in this regard has been placed upon "Mst. Shamim Akhtar v. Najma Baqai and 3 others 1977 SCMR 409, Agha Muhammad Hassan v. Mehraj Din PLD 1973 Lahore 95, Ch. Ajaib Hussain and another v. Mst. Zareen Akhtar and 11 others 2003 YLR 410.
5.On the other hand, learned counsel for the respondent refuted the arguments of learned counsel for petitioner and argued that there is no patent mistake floating on the surface of record, or any clerical mistake therefore, the review sought in the instant C.M. Is uncalled for. The learned Arbitrator has already decided the issue of de novo arbitration proceedings vide order dated 18-1- 2009, which was never assailed by the applicant before any forum. Moreover, learned counsel for the applicant recorded his statement on 8-2-2009 to the effect that he adopts oral/ documentary evidence produced before the learned Ex-Arbitrator, subject to approval / consent of the respondent. On that applicant started coercing, pressurizing and harassing the counsel for U.S.C. /respondent to give a consenting statement in his favour. Upon instructions from MD, USC, counsel for respondent made a dissenting statement before the learned Arbitrator. The agreement for appointment of the learned Arbitration was executed by the claimant and U.S.C. Without any duress or coercion and was presented consciously by the claimant in the Court in the presence of his counsel. Learned counsel for respondent placed reliance in this regard upon "Faisalabad Development Authority v. R.C.C. Limited through Managing Director 2003 YLR 2377, Ahsan Ali and others v. District Judge and others PLD 1969 Supreme Court 167, Ghulam Nabi v. Farrukh Latif and 2 others 1987 SCMR 608, Abdul Karim Moosa v. Mohini Bai and others 1973 SCMR 233, Quetta Club Ltd.
Quetta Cantt, through its Administrator v. Muslim Khan and 2 others PLD 1983 Quetta 46, Province of Punjab v. Malik Ghulam Qasim 1993 CLC 589, Sardar Habibullah Khan v. Province of West Pakistan and others 1977 SCMR 266 and Dost Muhammad v. Muhammad Ramzan and others. 1979 SCMR 513.
6. Heard the learned counsel for both sides, minutely perused the record, relevant provisions of law and also the case-law quoted by the learned counsel for the parties.
7. The record shows that on 3-7-2008, a petition under section 20 of Arbitration Act, 1940 bearing C.M. No,499 of 2008 in Civil Suit No,205 of 2008 was placed before the then honourable Chief Justice, Islamabad High Court, which was decided in the presence of learned counsel for the petitioners as well as the respondents and the following order was passed:-- 3-7-2008 Ch. Naseer Ahmed, Advocate for the Petitioners.
' Ch. Imtiaz Ahmed, Advocate for the Respondents.
' C.M. No,409/2008.
' Both the learned counsel have submitted a written settlement requesting the revocation of authority of Mr. Justice Zia Mehmood Mirza, J. (Rtd.) as Arbitrator at the risk and costs of the plaintiff and Mr. Justice Muhammad Muzammil Khan, Judge (Rtd.) be appointed as sole Arbitrator to conduct de novo arbitration on all legal and factual matters pertaining to and incidental with the agreement dated 27-6-1996. Order according.
2. Mr. Justice Muhammad Muzammil Khan, Judge (Rtd.) is appointed as sole Arbitrator to conduct de novo arbitration proceedings on all legal and factual matters pertaining to the agreement dated 27-6-1996. The matter is thus, referred to the Arbitration for making an award according to the claims of the parties. Fees of the Arbitrator is fixed at Rs,8,00,000 (Eight Lac), which shall be paid by both the parties equally.
3. C.M. Is disposed of.
' Chief Justice
8. Record further shows that the above said C.M., which was presented for adjudication before the Court, was supported by an arbitration agreement, bearing signatures of one Malih Qamar Zaman, Managing Director, Messrs Adoptive Solutions (Pvt.) Ltd. Islamabad and one Brig. Hafeez Ahmed (Retd.), Managing Director, Utility Stores Corporation on behalf of respondent and their names are also reflected on the said arbitration agreement. The record also shows that after receiving the orders from the Court, the learned Arbitrator sent notices to the parties and requisitioned the relevant record from the office of earlier Arbitrator vide order dated 11-7-2008. Record further shows that after receipt of the relevant record of Arbitration from the earlier Arbitrator, the learned Arbitrator directed the parties to appear before him vide order dated 20-7-2008. It also reflects from the order-sheet maintained by the office of learned Arbitrator that on 2-9-2008, both the learned counsel representing the parties and the representatives of the parties concerned entered appearance before the learned Arbitrator and the following order was passed by the Arbitrator.
' Date 2-9-2008.
' Ch. Naseer Ahmed Advocate along with Malih Qammar-ul-Zaman, Chief Executive of the claimant Firm whereas Ch. Imtiaz Ahmed Advocate has appeared on behalf of Utility Stores Corporation and have examined record receiving from Mr. Justice Zia Mehmood Mirza (Rtd.) Messrs Adoptive Solution do not want to file any fresh claim and would rely on the claim earlier put forth before Mr. Justice Zia Mehmood Mirza, the earlier Arbitrator.
' Both the parties agree that arbitration proceedings may be conducted at Lahore. In view of this case is adjourned to 12-10-2008 at 10-00 a.m. In my Lahore office at 3-Turner Road Lahore for filing of reply/counter claim by Utility Stores Corporation with an advance copy to the claimant.
9. The order further reveals that on 12-10-2008, Mr. Nazir Sheikh, Advocate filed his power of attorney on behalf of petitioners when the learned counsel for the respondent made a request for an adjournment as according to him, he could not prepare the reply and the arbitration proceedings were adjourned to 2-11-2008 for filing of reply and counter claims. Whereafter the learned counsel for the respondent filed reply on behalf of U.S.C. And the proceedings were adjourned for a further date for the purpose of filing rejoinder/replication by the Messrs Adoptive Solutions. It is clear from the order of the learned Arbitrator that the presence of the parties on the said date was as before.
Once again the parties as well as their learned counsel appeared before the learned Arbitrator on 23-11-2008, when the petitioners Messrs Adoptive Solutions requests for an adjournment on the ground that copy of the list of witnesses submitted by U.S.C. Was not provided to them. The order dated 14-12-2008 reads as follows:-- 14-12-2008:- ' Ch. Naseer Ahmed Advocate and Mr. M. Nazir Sheikh Advocate along with Malik Qamar-uz-Zaman Chief Executive of the claimant firm. Ch. Imtiaz Ahmed, Advocate for U.S.C./respondent.
' No evidence was produced by the claimant who instead delivered a miscellaneous application at my home on 11-12-2008 which was ordered to be placed on record for today. Notice of this application along with a copy of the same has been handed over to the learned counsel for the respondent who shall file reply to this application within two weeks by post, with an advance copy to the leamed counsel for USC. Let the case now be taken for arguments on .The aforementioned application on 4-1-2009 at Lahore.
10.Again on 4-1-2009, the matter was heard by the learned Arbitrator and following order was passed: ~ ' 4-1-2009:- ' Presence as before.
' Reply to the application/ Memorandum of the Claimant has been filed. Learned counsel for the Claimant has partly argued the case. Parties' request for another opportunity to complete their arguments on the application. To come up on 18-1-2009 at Lahore.
11. The order passed by the learned Arbitrator on 18-1-2009 reads as follows: ' 18-1-2009:- ' Messrs M. Nazir Shaikh and Ch. Nasir Ahmed Advocates for the claimant.
' Chaudhry Imtiaz Ahmad, Advocate for U.S.C.
' I have heard the learned counsel for the parties and have examined the record.
' This order proposes to decide an application in form of a Memorandum submitted by Messrs Adoptive Solutions/ the claimant, requiring that Arbitration proceedings shall be taken from the stage where those were stopped/ concluded by the honourable erstwhile Arbitrator and that the counter claim put forth by U.S.C, in it's written reply was afterthought and being belated/ time barred, may be rejected summarily, at this stage of proceedings. As the facts go, arbitration proceedings under agreement dated 27-6-1996 were initially conducted^by Mr. Justice Zia Mahmodd Mirza (Retd.) under reference by the Court dated 27-3-1998 where parties filed their respective pleadings; led oral/documentary evidence and the proceedings almost matured for announcement of Award but the Suit file was transferred to the honourable Islamabad High Court, on account of change of pecuniary jurisdiction: A joint petition (CM No,499/08) was filed by the parties before the High Court, praying revocation of authority of the arbitrator (Mr. Justice Zia Mahmood Mirza) at the risk/ costs of the plaintiff and that the undersigned be appointed a sole arbitrator to conduct de novo arbitration on all legal and factual matters pertaining to and incidental to the agreement dated 27-6-1996. This petition was disposed of on 2-7-2008 by the honourable High Court, with following order:- "Mr. Justice Muhammad Muzammil Khan, Judge (Retd.) is appointed as sole arbitrator to conduct de novo arbitration proceedings on all legal and factual matters pertaining to the agreement dated 27-6-1996. The matter thus, is referred to the arbitrator for making an award according to the claims of the parties. Fee of the arbitrator is fixed at Rs,8,00,000 (Eight Lac) which shall be paid by both the parties equally. C. M. Is disposed of. "
' The above reproduced order of his lordship the honourable Chief Justice, Islamabad High Court is unambiguous, as the language used is to conduct de novo arbitration proceedings. According to ordinary dictionary meanings of the Latin word "De novo" are "a new hearing", proceedings from the beginning; afresh over again, once more or a second time". Thus it is clear that I have to undertake these proceedings from the beginning. I had in fact acted accordingly, without any objection from either side and it was only at the evidence stage that instant application was moved, for the decisions, above noted. I cannot sit in judgment/ appeal against the order dated 3-7-2008, conferring authority on me to act afresh as an arbitrator. In this view of the matter, the proceedings will continue and I will record evidence of the parties again. As regards earlier recorded evidence that can be adopted with the consent of the parties which shall be solicited in due course of proceedings, if need be.
' As regards submissions of the learned counsel for the claimant that U.S.C. Did not earlier plead any counter claim which cannot now be taken up or permitted to be raised at this belated stage i.e, after about ten years and the same being barred by limitation be rejected summarily, by taking cognizance as per provisions of section 3 of the Limitation Act, 1908 which has been made applicable by section 37(1) of the Arbitration Act 1940. I am of the view that the counter claim in the form of return of Rs,30,230,381 allegedly released to the claimant in response to advertisements etc. In connection with "Utility Stores Price Club Card Scheme", including salaries of their employees and this stance having been denied by the claimant in its rejoinder besides grading it to be time- barred, this prayer involves determination of mixed questions of law and facts. Presently, these are only claim; reply and rejoinder/ replication on my file and on the basis of those, no summary rejection can be done. I can decide this point after some evidence to this effect is brought on the record. The application/ memorandum in hand is accordingly disposed of.
' This order shall be communicated to the parties, through post.
' Case now to come up on 8-2-2009 for evidence of the claimant, in my Lahore office at 10 am.
' Arbitrator.
12. The plea raised by the learned counsel for the applicant to the effect that the order for de novo proceedings was obtained by way of fraud and misrepresentation does not find any support from the record, as it is quite clear from the record that the parties as well as learned counsel for the parties were present before the then honourable Chief Justice of this Court, when the order of conducting de novo proceedings by the Arbitrator was passed. Since the parties as well as their learned counsel had been joining proceedings before the Arbitrator on a number of dates prior to the date when the matter of de novo proceedings was for the first time objected to by the petitioner. The argument that the petitioners or their learned counsel were not aware of the order passed by the honourable High Court does not appeal a prudent mind, so it goes without saying that the objection regarding de novo proceedings was taken up by the petitioner with the delay of almost six months. The instant application was moved by the petitioner on 22-4-2009 with the following subject:-- ' Petition under section 20 of Arbitration Act 1940 Civil Miscellaneous Review Application under section 151, C.P.C, for modification of the order dated 3-7-2008, passed on C.M. No,499 of 2008, in C.S. No,205 of 2008, for deletion of the
13. It has been prayed in the instant C.M. That while deciding the instant review application this Court by way of exercising inherent powers vested in it, may make the modification of the order dated 3-7-2008 and deletion of word "De novo" as recorded in the order dated 3-7-2008. When confronted with the question whether there is any provision available under the Arbitration Act regarding a review, the learned counsel for the applicants was unable to point out any such provision. Again the question arises as to whether this Court is competent to modify the orders passed by the then honourable Chief Justice, Islamabad High Court, Islamabad, the learned counsel for the petitioner could not give any satisfactory reply on this score even, because there is nothing on the record to suggest that there was any clerical or factual error in the said order justifying modification. It will not be out of place to mention here that the order to the effect of recording de novo evidence passed by the D learned Arbitrator has never been appealed against by the petitioners.
14. The last objection raised by the learned counsel for the petitioner to the effect that de novo proceedings could not be ordered by the Court is also without any force because the parties themselves had entered into an agreement, which was presented before the honourable Court and the Court had ordered for the same in view of the agreement between the parties. Moreover, there is no embargo contained in Arbitration Act from where it can be inferred that no de novo proceedings can be ordered in a matter under arbitration. It has been held in case titled as "Faisalabad Development Authority v. R.C.C. Limited through Managing Director 2003 YLR 2377 that:-- "Parties entered into different agreements for construction works---Agreements contained an arbitration clause---Dispute arose and the matter was referred to two arbitrators who pronounced the award wherein it was stated that opportunities were given to the appellant who failed to file written statement and by applying the provisions of O.VIII, R. 10, C.P.C. The right of defence of the appellant was struck off---Said award was filed for making the rule of Court---Contention of the appellant was that sufficient opportunity of hearing was not given to him---Validity--Appellant was not given proper opportunity of hearing and defence had not been struck off by both the arbitrators and only one arbitrator was not competent to do so---Apparent misconduct in the arbitration proceedings by the arbitrators was committed in Conducting the arbitration proceedings---Such an award could not be sustained---High Court remitted the matter to the arbitrators to hold de novo arbitration proceedings.
15. The judgments quoted by the learned counsel for the applicants are distinguishable from the facts of the instant case and therefore, cannot be placed reliance upon.
16. In view of what has been discussed in the foregoing paragraphs, this civil miscellaneous stands dismissed being devoid of any force.
17. Office is directed to send back the record of the learned Arbitrator for conducting arbitration proceedings in accordance with the order dated 3-7-2008, passed by the honourable Chief Justice, Islamabad High Court, within a period of 120 days of receipt of this order.