'MS. RUKHSANA AHMAD, J.---This suit has arisen out of an application under sections 30 and 33 of the Arbitration Act, 1940, filed by the defendant raising objections to Award submitted by the Sole Arbitrator under section 14(2) of the ibid law for making the same as rule of the court on 4-6-1999.
2. Brief facts of the case are that the defendant National Refinery Limited required Steel Drums for filling asphalt and therefore they entered into an agreement with the plaintiff Mehran Metal Container Private Limited for the supply of the same. In this respect an agreements dated 20-3- 1990, 23-12-1993 and a supplementary agreement dated 20-8-1996 were executed between the parties. The terms and conditions for the supply of the steel drums were contained in the agreement. The plaintiff apparently set up a Steel Drums Manufacturing Factory at Karachi Industrial Area, for the supply of the steel drums. After the execution of the agreement the plaintiff contacted with Foreign Supplier for the supply of 4000 M.T. Steel Sheet on set specification and sought the approval of the defendant as per the supplementary agreement. This approval was given with the condition that the procurement time schedule shall remain uninterrupted. Further correspondence took place between the parties for further import of steel sheet, a dispute apparently occurred in respect of the payment of customs duties etc. On the import of 4000 M.T.
Sheet, which resulted in the termination of the Supplementary Agreement by the defendant Pakistan Refinery Ltd. Problems further arose as regards the clearance of the goods which were lying at port and the releasing of the shipping documents. Ultimately suits were filed in the High Court and the same were withdrawn on referring the matter to Arbitrator which was appointed with the consent of the parties.
3. The learned Arbitrator has conducted the arbitration proceedings in accordance with the Arbitration Act and after conclusion of the evidence and hearing the parties has passed the Award on 12-10-1998 whereby the Arbitrator had held that after adjustments: Claimant's claim allowed was Rs. 13,06,18,463-00 Less respondent's claim allowed wasRs.7,53,77,618-00 Net payable to the Claimant. Rs.5,52,40,845-00 '(Rupees Five Crore Fifty Two Lacs Forty Thousand Eight Hundred Forty five only).
'Thus, the amount of Rs,5,52,40,845 was to be paid to the plaintiff/claimant by the defendant/ respondent within 30 days of the Award. Learned Arbitrator thus through a J.M. Under section 14(2) of the Arbitration Act, 1940, sought the same to be made Rule of the Court. The same was objected to by the defendant, as stated above and the defendant filed H.C.A. No,237 of 1999 and the learned Division Bench vide order dated 14-10-2003 disposed of the appeal and remanded the case to the learned Single Judge for haring of the objections.
4. In concise the objections raised by the defendant to the Award are that the award was announced on 12-10-1998 in the absence of the defendant and without any notice. It is further submitted that the award was filed on 31-10-1998 while unattested copy of the same was supplied on 13-11-1998. It is further stated in the objections that the learned Arbitrator has not taken into consideration the reply statement filed by the defendant and has allowed the claim of the plaintiff despite the fact that the same do not tally with the supporting documents. It is further pleaded that the arguments were not valid and binding as the same were procured by exercising political pressure upon the defendant. It is further pleaded that the learned Arbitrator has wrongly held that the agreement could not be terminated as the L.C. Was opened by the concurrence of the defendant so also that the party could not terminate the agreement before the imported sheets were exhausted. The defendant has also assailed the Award by raising objections as to allowing the claim of the plaintiff in respect of difference in figures, the liquidated damages, the arbitration charges, short receipt of drums, warehousing charges, manufacturing charges aid cost.
5. On the other hand, the plaintiff has supported the Award and has refuted the objections of the defendant, as stated above, by filing objections to the application under sections 30 and 33 of the Arbitration Act, filed by the defendant.
6. The learned counsel for the defendant in support of his objection's says that the LC was opened by the plaintiff without concurrence of defendant. No clearance was given, this has not been entertained by the Arbitrator. It is further contended by the learned counsel for the defendant that there were three suits pending between the parties and they were all withdrawn unconditionally.
Therefore, Order II, rule 2, C.P.C. Would come in way of claim as there was no evidence. Next the learned counsel has agitated that in Para 53 of the Award the Arbitrator has stated that the LC opened with defendant's concurrence while that was not the case, as no clearance was given, and as such the Arbitrator concluded without evidence and without any substance while giving the Award. The Arbitrator has assumed the losses of the plaintiff himself as no evidence was considered or based upon while the Arbitrator awarded liquidated damages at Rs,20 (M). Again there was no proof of business loss to the tune of Rs,12 (M) special damages were again not established by the Arbitrator while observing in para 105 of the Award that the claim of manufacturing charges is unjustified and has just presumed again otherwise and allowed a sum of Rs,3.5 (M). General damages claim has also been granted totaling Rs,40 (M) without any detailed discussion or break up being given as such the Award was argued to be defective and liable to be set aside. The learned counsel has fortified his above arguments with citation of the case laws being PLD 1985 SC 69, PLD 1996 SC 108, 1992 CLC 1138, AIR 1952 Calcutta 440, PLD 1978 Kar.
827, 1987 CLC 383, 2006 SCMR 614, 2006 MLD 907, PLD 1996 SC 737, PLD 1997 Queeta 87, 2001 MLD 1955 and 2008 CLD 85.
7. In reply learned counsel for the plaintiff has contended that the objections are not maintainable under section 33 of the Arbitration Act, 1940 no application challenging the existence or validity of an award or for having its effect determined shall be entertained by the Court unless the appellant has deposited in the Court the amount which he is required to pay under the Award or has furnished security to the satisfaction of the Court for payment of such sum of the fulfilment of any other obligation by him under the award. He contended that thus in view of the fact that' the respondent has challenged the validity of the Award seeking its effect to be determined by this Court and neither has deposited the amount of the Award nor furnished security for the same the objections should be dismissed. He further contended that the objections are filed by a person who has not been able to produce any power of Attorney or Board Resolution in his favour. In support of this he has placed reliance on 2005 CLD 1330. Learned counsel has further argued that it is a settled principle of law that the Court while examining the validity of an Award does not act as a Court of appeal and the scope for setting aside the Award is very limited i.e, the misconduct, the Award has been made after the court has suspended the same or the same having become invalid under section 35 of the Arbitration Act and if the award has been improperly procured or otherwise invalid. According to learned counsel none of these ingredients could be proved by the defendant in his objections and that no ground as provided under section 30 of the ibid law for setting aside the Award is attracted. He further contended that while hearing objections to an award Court cannot undertake reappraisal of evidence and the Court can C only interfere if there was error apparent on the face of record. As regards ground of perverse, learned counsel contended that such perversity in reasoning must be substantiated with reference to material considered by Arbitrator in the Award, which has not been done by the defendant in the instance case. Learned counsel further contended that the Award is in consonance with fact and law and it is a speaking order with detailed reasoning on each and every issue. He further contended that the Award in substance would generally oust jurisdiction of Court except for purpose of controlling arbitrators and preventing misconduct and for regulating procedure after award and finality would be attached to Award passed in accordance with decision of Arbitrator. He further contended that mistake as to incorrect calculation of damages/losses suffered by the defendant would not materially affect the decision made by the Arbitrator. The defendant was given full opportunity to present his case. He further contended that only question of law can be agitated under section 30 of Arbitration Act. 1940 and High Court may not agree with the arbitration on any point but cannot impose its judgment over judgment of arbitrator. In support of his contention he has placed reliance on PLD 2006 Karachi 216, 2002 CLC 492 Karachi, 1999 CLC 1698 Karachi; 1998 CLC 1671 Karachi, PLD 1996 SC 108, PLD 1998 Karachi 79, 1999 CLC 1777 Karachi. On factual aspects of the matter learned counsel has contended that the learned Arbitrator has taken each and every issue in his award and has given a detailed and elaborate finding to the same, which is also evident from the fact that the learned Arbitrator has not accepted all the claims of the plaintiff and some of them have been rejected.
8. I have heard the learned counsel appearing for both the parties and with their assistance have gone through the Award and other material placed before the Court and am inclined to agree with the arguments advanced by the learned counsel for the plaintiff who has substantiated the same with the relevant case laws which are reproduced as under:-- '2005 CLD 1330 (D.B decision of this Court, 2002 CLC 492 Karachi, 1999 CLC 1671 Karachi, PLD 1996 SC 108', 1993 CLC 804 Lahore, PLD 1998 Karachi 79 and 1999 CLC 1777 Karachi.
'In the case reported in 1999 CLC 1698 Karachi it has been held"- "Court was competent to interfere where there was an error apparent on the face of the award. In order to find such an error it was not permissible to go through the evidence produced before Arbitrator-Where there was no error apparent on the face of the award objections filed by the plaintiff were liable to be dismissed.
'In the case reported in 1998 CLC 1671 Karachi it is observed:-- "Court while hearing objections to award could not undertake reappraisal of evidence recorded by arbitrator invalid -- must appear on the face of award and should be discovered by reading the same -where reasons recorded by the arbitrator were impugned as perverse, such perversity in reasoning must be substantiated with reference to material considered by arbitrator in award...
Court while hearing objections against award was not legally competent to reappraise award or to assess and examine evidence to determine whether another possible conclusion could be drawn therefrom."
'In case reported in PLD 1996 SC 108 it has been held that: "The Court while examining the validity of an Award does not act as a Court of appeal. Therefore, a Court hearing the objection to the Award cannot undertake a reappraisal of the evidence recorded by the arbitrator in order to discover the error or infirmity in the Award. The error or infirmity in the Award which rendered the Award invalid must appear on the face of the award and should be discoverable by reading the award itself. Where reasons recorded by the arbitrator are challenged as perverse the perversity in the reasoning has to be established with reference to the material considered by the arbitrator in the award."
'In the case reported in 1993 CLC 804 Lahore it has been held as under:-- "Evidence of witnesses of appellants militate against plea of misconduct of arbitrators.. Award shown in depth study of the relevant record and the issues along with implications arising ex contract between the parties.... Arbitrators had made exhaustive appraisals of respective claims of the parties and determined them on basis of documents and evidence presented to them...Every claim of respondent was dissected and discussed threadbare and out of them some claims were even rejected.. Award would be upheld where arbitrators had given fair and proper opportunity to both the parties to establish their respective cases and had adequately considered and decided every item of claim made by the respondent/ claimants. No misconduct was established against the Arbitrator.
'In case reported in PLD 1998 Karachi 79 it has been held by this Court that:-- "Extent-while grounds for setting aside award to be found in section 30 of Arbitration Act, 1940, sections 15 and I6 of the Act lay down circumstances under which award might be corrected and modified or remitted for consideration-Arbitration award in substance would generally oust jurisdiction of Court except for purpose of controlling Arbitrators and preventing misconduct and for regulating procedure after award- Court would have no right to review or reappraise evidence considered by Arbitrator on merits- -Finality would be attached to decree passed in accordance with decision of Arbitrator.
'Incorrect calculation of damages/ losses suffered by defendant-Such mistakes by arbitrator would not materially affect decision made by arbitrator-Jurisdiction vested in Court to modify/correct award containing mistake in calculation of damages suffered by defendant need not be withheld for technical reasons which would only give rise to multiplicity of litigation and further delay in resolution of dispute between parties which ought to be avoided as far as permissible under law. "
'In the case reported in 1999 CLC 1777 Karachi it has been held that:- " Record and proceedings before arbitrator had shown that arbitrator had judiciously proceeded with the task assigned to him and both the parties were provided adequate opportunity to put up their case before him. Allegation that arbitrator had misconducted himself or proceedings, thus, was without any basis-Award given by Arbitrator was valid in circumstances. High Court while hearing objections under S.33 of Arbitration Act, 1940 does not sit as a Court of appeal and has no jurisdiction to interfere with the award on merits-High Court may not agree with the arbitration on any point but cannot impose its judgment over judgment of arbitrator, save for the reasons given and circumstances stipulated under sections 15 and 30 of Arbitration Act, 1940-Only a question of law can be agitated under section 30 of Arbitration Act, 1940-Basis of assessment of damages was a question of fact and wrong basis of assessment could not be made a ground to attack award given by arbitrator."
'The plaintiff has also shown this Court that the Arbitrator has not allowed certain claims of the plaintiffs while rejecting them and the defendant had filed counter-claim as well and approximately 130 (M) was allowed to the defendant in support of his claim. Though as to the contention of the plaintiff that defendant was liable to first deposit in the Court the amount which he is required to pay under the Award as per Section 33 of the Arbitration Act, 1940 but the proviso pertaining to such condition has been omitted vide Arbitration (Amendment) Ordinance, 1977 (Ordinance XXVII of 1977) and thus the objection is void in view of the above.
'In conclusion to my findings above, I am of the view that the objections of the defendant merit no consideration and are dismissed and the award dated 4-6-1999 is made Rule of the Court.
Award made rule of Court.