' ZAFAR AHMED RAJPUT, J.--- This High Court Appeal under sections 39 and 15 of the Arbitration Act, 1940 ("the Act of 1940") is directed against the Judgment and Decree dated 17.11.1998 and 14.05.1999, respectively passed in Suit No, 308 of 1998 whereby, while rejecting the objections raised by the appellants/defendants, the learned Single Judge of this Court made the Award dated 25.08.1997 rule of the Court.
2. Precisely stating facts of the case are that the appellants/defendants, a Private Limited Company, entered into a General Sales Agency Agreement, dated 22.02.1993 ("the GSA Agreement") with the respondents/plaintiffs, a Russian International Airlines, to act as its General Sales Agent (GSA) in Pakistan. On 19.10.1994, the respondents terminated the GSA Agreement, following which the appellants filed Civil Suit No,252/1995 in the original side of this Court, inter alia, averring therein that the appellants were appointed by the respondents as their GSA throughout Pakistan for the period of one year commencing from 22.03.1993 to 22.03.1994, which was automatically extendable for one year unless terminated by the respondents by giving 30 days prior written notice. It was the case of the appellants that pursuant to the GSA Agreement, the appellants invested heavily in buying offices, arranging the fixtures and furniture and decorating them for the promotion of respondents' airline business, but the respondents violated the terms of the GSA Agreement from the very beginning inasmuch as it started issuing ticket stock to another concern, namely, M/s. Mercury in Pakistan in spite of objections raised by the' appellants; however, the appellants observed in good faith and with diligence the 'terms and conditions of the GSA Agreement. Hence, the appellants instituted the aforementioned civil suit claiming therein a "token" amount of Rupees Thirty-Five Million for damages to its reputation hi addition to the claim for the specific performance of the GSA Agreement and injunctive relief restraining the respondents from entering into a contract/agreement or appointing any other GSA.
3. The respondents resisted the claim of the appellants on all fronts and took up the plea that the Investment Promotion Bureau (IPB), Government of Pakistan granted permission to appellants on 22.03.1993 to operate as GSA for respondents, so also the Civil Aviation Authority (CAA) issued NOC on 27.03.1993, but later on IPB cancelled the permission on 20.05.1993 and CAA also withdrew its NOC; thereafter, the respondents lost their entitlement to continue as their GSA, but by suppressing the cancellation and withdrawal of the permission and NOC by IPB and CAA, respectively, the appellants continued to act as GSA and failed to render accounts for 38 Air Tickets issued to it. The appellants also failed to account for the sales for the period July 1994 to October 1994. Denying any cause of action in favour of appellants to maintain the suit, the respondents pleaded that the civil suit was actuated by vexatious motives and mala fide intention of avoiding the payment of outstanding amount. The respondents filed an application under Section 34 of Act of 1940 in the said suit on 07.08.1995.
4. The respondents/plaintiffs also filed Civil Suit No,569/1995 against the appellants/defendants in the original side of this Court claiming for the tickets sales and damages alleging therein that the very opening words and the concluding ones of the GSA Agreement showed that it was subject to the approval of the concerned authorities of the Government of Pakistan and it was agreed and understood all along that it was the responsibility of appellants to obtain the necessary and requisite permission from the State authorities of Pakistan. It was the case of the respondents that as long as appellants had the permission and the authority to act as GSA, the respondents fully cooperated with them but it was a shock to respondents to learn from a letter dated 24.08.1994, issued by the CAA, the permission had been cancelled and the appellants were acting as GSA without any authority. It was the claim of the respondents that the appellants failed to account for and pay under the GSA agreement a sum of Rs,11,016,260.60. Apart from the amount due in respect of 38 tickets not account for. The amount due was also to be converted into US Dollars at the prevalent rate on November, 22, 1994. Rupees Ten million was also claimed as damages to the reputation to the respondents.
5. Application under Section 34 of the Act of 1940, filed in Suit No, 252 of 1995, was allowed on 17.12.1995 and the suit was stayed. Subsequently, the Suit No,569 of 1995 was also stayed, vide order dated 11.01.1996. Consequently, the respondents appointed Mr. Justice (R) Abdul Rahim Kazi as Arbitrator and sent the requisite notice to the appellants, who replied by their letter, dated 12.02.1996, stating therein that they would revert in this regard. Since the appellants did not respond, the respondents approached the Director General of the International Air Transport Association (IATA), by invoking Article 14.4 of the GSA Agreement. The appellants; thereafter, were approached by the IATA, who responded by their letter, dated 25.04.1996, but failed to appoint their Arbitrator. Consequently, on 13.08.1996, IATA appointed Dr. Parvez Hassan as an Arbitrator on behalf of the appellants. The two Arbitrators then met on 30.08.1996 and appointed Mr. Justice (R) Shafiur Rehman as Umpire. The proceedings of the arbitration then commenced and were attended by the appellants regularly on 14.11.1996, 19.12.1996 and then on 09.01.1997 when the appellants filed their reply to the statement of the respondents. Thereafter, the appellants continued to attend the hearing before the Arbitrators on 06.02.1997, 27.02.1997, 14.03.1997 and; then, they ceased appearing before the Arbitrators.
6. In the two suits, the following issues were framed in the presence and with the consent of the parties.
Suit No, 252/1995 Gerry's International v. Aeroflot
(i) Which of the parties was responsible for securing the permission from the Investment Promotion Bureau/ Government of Pakistan?
(ii) Whether permission granted by Investment Promotion Bureau/ Government of Pakistan was withdrawn by letters dated 20.05.1993 and 25.10.1993?
(iii) Whether the letters dated 20.05.1993 and 25.10.1993 issued by the IPB were received by Gerry's. If so, whether Gerry's brought them to the notice of Aeroflot?
(iv) Whether any expenses were incurred by Gerry's on office etc. And on newly appointed staff. If so, whether Aeroflot is liable to reimburse any such expenses?
(v) Whether customary binding assurance was given by Aeroflot to Gerry's that General Sales Agreement would be renewed from year to year. If so, its effect?
(vi) Whether expenses, if any, incurred by Gerry's on advertising, salaries of staff, if any, exclusively employed for Aeroflot are to be reimbursed by Aeroflot?
(vii) Whether Gerry's representatives were called to Moscow by Aeroflot. If so, how many times, what expenses were incurred thereon and who is responsible to reimburse them and to what extent?
(viii) Whether Aeroflot permitted other travel agents in Pakistan during the currency of GSA with Gerry's to sell tickets in Pakistan. If so, was it a violation of GSA with Gerry's? If so, to what amount, if any, Gerry's is entitled by the way of loss of commission etc.?
(ix) Did Gerry's send a reply dated 09.10.1994 to Aeroflot as stated in para 13 of their claim statement?
(x) Whether Aeroflot was allowed to conduct its business in Pakistan. If so, from which date and for what period?
(xi) Whether the termination of GSA by Aeroflot was in accordance with the agreement?
(xii) Whether Gerry's sold Aeroflot's tickets. If so, for what amount. Whether any amount is outstanding and payable by Gerry's on account of such sales of tickets?
(xiii) What should be the costs of suit and arbitration and which of the parties, and to what extent, is liable to pay the same?
(xiv)What should be the terms of the award?
Suit No,569/1995 Aeroflot v. Gerry's International
(i) Which of the parties was responsible for securing the permission from the Investment Promotion Bureau/ Government of Pakistan?
(ii) Whether permission granted by Investment Promotion Bureau/ Government of Pakistan was withdrawn by letters dated 20.05.1993 and 25.10.1993?
(iii) Whether the letters dated 20.05.1993 and 25.10.1993 issued by the IPB were received by Gerry's. If so, whether Gerry's brought them to the notice of Aeroflot?
(iv) Whether the permission granted by IPB was received on 21.12.1993. If so, its effect?
(v) Whether ticket stocks as alleged in the claim/plaint were received by Gerry's from Aeroflot?
(vi) Whether Gerry's sold tickets of Aeroflot. If so, for what amount?
(vii) What is the amount outstanding against Gerry's on account of ticket sales?
(viii) Whether the termination of GSA by the Aeroflot is in accordance with the agreement?
(ix) What is the net amount payable by Gerry's to Aeroflot on account of outstanding tickets sales?
(x) What if any is the reduction in load factor of Aeroflot and what is the loss suffered by Aeroflot on account of reduction in load factor?
(xi) Whether acts of Gerry's are likely to have impaired reputation of Aeroflot. If so, to what extent?
(xii)Whether either party is entitled to cost and expenses including legal expenses of this arbitration?
(xiii) Whether Aeroflot is entitled to foreign exchange losses on account of the delays in payment of amounts due to it from Gerry ' s?
(xiv) What should be the terms of the award?
7. The Arbitration Tribunal made the following Award on 25.08.1997, holding the appellants liable to pay the amount to respondents:
1. That M/s. Gerry's International will pay the following sums to M/s. Aeroflot:
(a) Rs,100,16,260.60 on account of reimbursement of Aeroflot Tickets sold.
(b) Rs,1,76,12,400.00 being 60% of claim on account of reduction in load factor of M/s Aeroflot.
(c) Rs,48,74,406.00 on account of conversion of amount at serial No, (a), which is equivalent to U.S. Dollars 324,316.00 at the then conversion rate of 33.88242 to a dollar and profitability on the dollar account at the rate of 5.375% per annum for the period 22.11.94 to 22.08.97 (US$ 47.950.00), the resultant dollar amount reconverted to Rupees at the current rate of Rs,40 to a dollar.
' The total of above conies to Rs,32.503.066=60 only.
' That, M/s., Gerry's International will also bear the entire costs of the Arbitration Proceedings including that of M/s. Aeroflot. So far M/s. Aeroflot have borne the brunt of expenses necessarily incurred to enable the proceedings in the matter and have also paid the professional fees of the Umpire partly and borne his expenses in addition to the payments made to their nominated arbitrator toward fees and expenses. The break-up is as under:
(a) Rs,5,00,000.00 towards 50% of the fees of the Umpire (Mr. Justice (R) Shafiur Rehman).
(b) Rs,29,003.00 towards expenses of Mr. Justice (R) Shaflur Rehman.
(c) Rs,5,00,000.00 towards fees of Arbitrator Mr. Justice (R) Abdul Rahim Kazi.
(d) Rs,88,238.00 towards expenses of Mr. Justice (R) Abdul Rahim Kazi.
(e) Rs,27,616.00 Hire charges towards Rent for Conference Hall paid by M/s. Aeroflot.
(f) Rs,3,00,000.00 Professional fees of Advocate of M/s. Aeroflot.
(g) Rs,59,845.00 towards expenses (Air passage and Hotel) of Advocate of M/s. Aeroflot.
(h) Rs,15,000.00 Court Fees Stamps.
(i) Rs,10,000.00 Documentation Charges.
' The total of the above amount comes to Rs,I5,29,702.00 3 That, M/s. Gerry's International will also pay the fees and expenses incurred by their Arbitrator Dr. Parvaz Hassan as under: ' Rs,750,000.00 Towards the fees of Arbitrator (Dr. Parvez Hassan)
' Rs,73,403.00 Expenses incurred by Dr. Parvez Hassan ' The total of the above amount comes to Rs,823,403.00 ' M/s. Gerry's International will also pay a sum of Rs,5,00,000=00 being the remaining 50% of the fees of Umpire Mr. Justice (R) Shafiur Rehman.
5. M/s Gerry's international will bear their own costs.
' The total of the amount at Items Nos.I to 4 above comes to Rs,35,356,171.60 which M/s. Gerry's international are liable to pay and from these amounts a sum of Rs,34,024,768.60 (shown at Items Nos.1 and 2) will be reimbursed to M/s. Aeroflot as they have paid this amount. Amounts at Items Nos.3 and 4 will be reimbursed to Dr. Parvez Hassan and Mr. Justice (R) Shafiur Rehman respectively.
8. Arbitrators filed the award in the Court on 17.03.1998 for making the same rule of the Court. The appellants being aggrieved by the Award filed objections to the Award in terms of sections 30 and 33 of the Act of 1940 seeking setting aside the Award mainly on the grounds that they (appellants) were meant to be the exclusive agent of the respondents but the respondents did not terminate the earlier bilateral agreement executed between them and Pakistan International Airlines (PIA), dated 03.12.1963 and, therefore, the GSA Agreement was illegal. The second objection of the appellants related to the fees of the Arbitrators to which, according to them, they never agreed being exorbitant. Furthermore, the appellants claimed that they had not taken part in the arbitration proceedings and yet the Arbitrators have given the Award.
9. The learned Single Judge of this Court finding no merit in the objections raised by the appellants to the Award directed the Award to be made rule of the Court, vide Judgment and Decree dated 17.11.1998 and 14.05.1999, respectively which have been assailed by the appellants in this High Court Appeal.
10. The counsel for the respondents waived the notice of the appeal on 24.11.2000 and; thereafter,, the respondents filed Cross-Objections to the appeal under Order XLI, Rule 22, C.P.C., on 12.12.2000, praying therein for the dismissal of the appeal and sought directions to the appellants to pay to the respondents, besides the amount awarded by the arbitrators:-
(i) Interest at the rate of 15% from the date of Award to the date of realization of payment.
(ii) Amount on account of difference in the US Dollar exchange rate between 25.08.1997 to the date of realization of the awarded amount.
11. Mr. Shahan Karimi, learned counsel for the appellants, has contended that the impugned judgment and decree is bad in law and on facts of the case. He has further contended that respondents had already entered into a similar General Sales Agency Agreement with PIA, which contains Exclusion Clause that restricts the respondents from appointing any other GSA in the territory, or any part thereof, of the General Sales Agent (PIA) and this fact was not in the knowledge of appellants at the time when they entered into GSA Agreement with respondents, therefore, in the circumstances, the GSA Agreement was void, as the agreement with PIA was already subsisting on 22.02.1993, when the former was signed. He has further contended that under the circumstances the appellants challenged the existence and validity of the arbitration agreement and Award under section 33 of the Act of 1940, as the same was void ab initio on the ground of uncertainty and that there was in fact no contract owing to mutual mistake as contemplated by section 20 of the Contract Act, 1872. In support of his contentions, the learned counsel has relied upon the case of (i) Tarsem Singh v. Sukhminder Singh (1998 Supreme Court Cases 471), (ii) Khardah Company Ltd. v. Raymon & Co. (India) Private Ltd. (AIR 1962 Supreme Court 1810), (iii) Waverly Jute Mills Co. Ltd. (in CA Nos. 389 and 390 of 1960)
2. Kelvin Jute Co. Ltd, in C.A.
Nos.391 and 392 of 196 (sic) v. Raymon & Co. (India) (Pvt.) Ltd. (in all appeals) (AIR 1963 Supreme Court 90), (iv) Messrs.. Combined Enterprises v. Water and Power Development Authority, Lahore (PLD 1988 Supreme Court 39), (v) The Union of India v. Shri Om Prakash (AIR 1976 Supreme Court 1745) and (vi) S. Sibtain Fazli v. Star Film Distributors and Muhammad Ali Khan (PLD 1964 Supreme Court 337).
12. Mr. Shahan Karimi, has further maintained that there is an error on the face of the record because the dispute was decided without going into the evidence of both the parties and it is a well settled principle of natural justice that a party should not be condemned unheard; furthermore, Article 10-A guarantees right to fair trial. He has also maintained that since the Award does not set out the. Reasons, it is liable to be remitted under section 26-A of the Act of 1940. The learned counsel in this regard has referred the case of (i) Amin Jute Baling Co. Ltd. v. Aminpur Union Cooperative Multi-purpose Society Ltd. (PLD 1961 Decca 102), (ii) Syed Sibte Raza and another v. Habib Bank Ltd. (PLD 1971 SC 743), (iii) Bijoy Singh v. Bilasroy and Co. (AIR 1952 Calcutta 440), (iv)
Messer Jaffer Bros. Ltd. v. Islamic Republic of Pakistan and another PLD 1978 Karachi 585), (v) M/s Emirates Airlines v. Daoud Shami etc. (PLD 2003 Lah. 358) (vi) Government of Pakistan v. Al-Farooq Roller Flour Mills Ltd. (2000 MLD 1130) and (vii) Umar Din v. Shaikh Bibi (2009 SCMR 29).
13. It has also been argued by Mr. Shahan Karimi that the appellants at all times protested against the fee of the arbitrators, which was too high to be paid by the appellants and the correspondence in relation to the fees was only communicated to the appellants after the first date of hearing before the arbitrators, and the same was not fixed by any agreement between the parties and, the arbitrator or umpire. Learned counsel has further argued that the appointment of an arbitrary by the Director General of the IATA was contrary to the law and also in violation of the agreement between the parties as, under Article 14.2 of the GSA Agreement, firstly an effort had to be made for the appointment of a single arbitrator, but no effort was made to have the matter resolved by a single arbitrator. He has also added that under Article 14.4 of the GSA Agreement, the Director General of the IATA was authorized to appoint an arbitrator for the appellants only however, he did not have the authority to settle the fees of the arbitrator appointed by him. The letter dated 13.8.1996 written by IATA to respondents shows that the appointment was not made under the Act of 1940. In these circumstances, it cannot be said that the arbitration was conducted in accordance with the law.
14. Conversely, Mr. Jawaid Asghar Awan, learned counsel for the respondents, has supported the impugned Award, judgment and decree and has contended that though the respondents, prior to entering into GSA Agreement with the appellants, had entered into an agreement with PIA in 1963, but that agreement with PIA has no impact on the GSA Agreement and this issue was neither raised by the appellants in the pleadings of their civil suit nor was an issue before the arbitrators; therefore, the appellants cannot be allowed to raise it subsequently in their application under sections 30 and 33 of the Act of 1940. He has further contended that section 20 of the Contract Act, 1872 has no application at all in this case as no party was/is under a mistake as to a matter of fact essential to the agreement and the appellants has no ground to challenge the existence and validity of the arbitration agreement and Award under section 33 of the Act of 1940. He has also contended that an award can be set aside only if there is an error of law on the face of the record.
In support of his contention, Mr. Awan has relied upon the case of The Upper Ganges Volley Electricity Supply Co. Ltd. v. The UP. Electricity Board (AIR 1973 Supreme Court 683).
15. Mr. Awan has further contended that the appellants themselves choose to remain absent from subsequent proceedings after framing of issue and failed to lead evidence in support of their case.
He has further added that it has been proved through evidence before the Arbitrators that permission to act as GSA by the appellants was withdrawn by the IPB and the NOC was cancelled by the CAA and the appellants with mala fide intention concealed this fact from the respondents and in any case the appellants failed to pay sale proceeds in respect of tickets sold by it. The respondents produced before the Arbitrators complete sales record and audited copies of sale coupons and it was after evaluation of record that the Arbitrators reached to the conclusion for making the Award.
16. As regard fees and appointment of arbitrator by IATA, Mr. Awan has contended that the fee considering the stature of the Arbitrators is not excessive. He has added that on 04.02.1996 the respondents sent a notice to appellants informing it that the respondents has appointed Mr. Justice (R) Abdul Rahim Kazi as the sole arbitrator and in the alternative to appoint its nominee arbitrator but the appellants through letter dated 12.02.1996 showed its disagreement to the appointment of Mr. Justice (R) Abdul Rahim Kazi as arbitrator and promise to revert very soon.
However, after waiting for more than one month, the respondents in accordance with Article 14 of the GSA Agreement approached the Director General IATA to nominate arbitrator on behalf of appellants, who had failed to nominate its nominee arbitrator and since the appellants for months together did not respond to IATA, the IATA appointed Dr. Parvez Hassan as nominee arbitrator on behalf of appellants, which is in accordance with arbitration agreement and section 40 of the Act of 1940. Thus, it is the appellants who frustrated the efforts for the appointment of a single arbitrator, though the respondents took the efforts to have the matter resolved by a sole arbitrator.
17. Mr. Awan, while referring the Cross-Objections filed by the respondents, has contended that the respondents had claimed in its objections filed to the application of appellants under sections 30 and 33 of the Act of 1940, the interest at the rate of 15% per annum from the date of the suit till the date of recovery of the amount awarded by the Mbitrators, but the learned Single Judge in his judgment failed to take notice of this fact and, consequently, interest could not be granted to respondents. He has further contended that the Arbitrator can award past interest only, however, the Court can order for the future interest, particularly when respondents' money blocked for many years and value of money gone down. He has in this regard relied upon the case of (i) Sujant Sing v. Seth Mohinder Paul (AIR 1964 Punjab 395), (ii) Muhammad Saleem Butt v. Messrs. Trading Corporation of Pakistan, Karachi (1986 CLC 254), (iii) Mackinnon Mackenzie & Co. v. The Secretary to the Government of Pakistan, Ministry of Labour, Manpower and Overseas Pakistanis Labour Division and 2 others (PLD 1986 Karachi 21) (iv) Dampskibsselskabet Norden Aktieselskale, Copenhagen K.
Denmark v. Ahmed Shipping Lines Limited (PLD 1983 Kar. 247) and (v) Province of Balochistan and another v. Malik Hail Gul Hassan (PLD 1982 Quetta 52).
18. Mr. Shahan Karimi, while refuting the contentions of learned counsel for the respondents, has contended that the Award is itself liable to be set aside, and the respondents are not entitled to interest prayed for in cross objections.
19. We have heard the learned counsel for the parties at length and have also considered the facts and circumstances of the case as borne out by the pleadings and have gone through the material available on record and the decision relied upon by them.
20. In order to appreciate the contentions of the learned counsel for the parties, we deem it appropriate to reproduce hereinafter the relevant Articles 14 and 19 of the GSA Agreement, sections 29, 30 and 33 of the Arbitration Act, 1940 and section 20 of the Contract Act, 1872, as under:-
1. GSA Agreement: ARTICLE 14 -- Arbitration Clause.
14.1 In the event of any dispute concerning ,the interpretation or application of this Agreement or concerning any right or obligation based on or relating to the Agreement, such disputes shall be referred to and finally settled by Arbitration in accordance with the procedure set forth below.
14.2 If the parties hereto agree to the appointment of a single Arbitrator, the Arbitrator Tribunal shall consist of him alone.
14.3 If they do not so agree, the Arbitrator Tribunal shall consist of three Arbitrators. Each party shall appoint one of the three Arbitrators and the Arbitrators so appointed shall appoint one of the third, who shall act as Chairman.
14.4 If a Party has notified the other Party or its appointment of an Arbitrator and the other Party fails to appoint an Arbitrator within fifteen days/15 days/ of such notification, the First Party may apply to the Director General of IATA who shall then appoint to an Arbitrator on behalf of the Party which has failed to do so.
14.5. The third Arbitrator shall be appointed by the Director General of IATA if the two Arbitrators fail to agree on his appointment within thirty (30) days ARTICLE 19 Execution and termination.
19.2 Either party hereto shall have the right to terminate this agreement by prior notice in writing to that effect sent to the other party's Head Office by registered mail, and this agreement shall come to an end on the thirtieth day after receipt of such notice of termination. Upon termination of this Agreement, all unused forms of traffic documents and other properties of the Principal shall immediately be returned to the Principal.
2. Arbitration Act, 1940
29. Interest on awards- Where and in so far as an award is for the payment of money the Court may in the decree order interest, from the date of the decree at such rate as the Court deems reasonable, to be paid on the principal sum as adjusted by the award and confirmed by the decree.
30. Grounds for setting aside award.- An award shall not be set aside except on one or more of the following grounds, namely:
(a) that an arbitrator or umpire has misconducted himself or the proceedings;
(b) that the award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35;
(c) that an award has been improperly procured or is otherwise invalid.
33. Arbitration agreement or award to be contested by application. Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient, it may set
3. Contract Act, 1872 Agreement void where both parties are under mistake as to matter of fact. Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void.
' Explanation - An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement is not to be deemed a mistake as to a matter of fact.
21. It is an admitted position between the parties that after execution of GSA Agreement on 22.03.1993, the appellants were granted permission on even date by the IPB to operate as GSA for the respondents and the CAA also issued NOC to appellants in this connection on 27.03.1993, but later on IPB cancelled its permission on 20.05.1993 and CAA also withdrew its NOC, but the appellants continued to act on behalf of the respondents, and when this fact came into the knowledge of respondents through letter, dated 24.08.1994, issued by the CAA advising the respondents to instruct the appellants to stop its operation as GSA for the respondents, the respondents terminated the GSA Agreement on 19.10.1994 by invoking its Article 19.1.
22. Now, reverting to the contention of the learned counsel for the appellants with regard to the execution of Sales Agency Agreement with PIA by the respondents, it may be observed that at no point of time it was the case of the appellants. The appellants having filed Civil Suit No,252/1995 for specific performance, damages and injunction by claiming rights under the GSA Agreement are estoppel from asserting that the agreement was/is void under section 20 of the Contract Act, 1872.
The plea of mistake of fact was neither pleaded by the appellants in the said suit nor even in arbitration proceedings before the arbitrators and, thus, the question of mistake of fact cannot be allowed to be raised first time-in the objections to the Award, filed by the appellants under sections 30 and 33 of the Act of 1940. Therefore, the learned Single Judge has rightly observed that: "... The existence or otherwise of such agreement would not render the arbitration agreement void.
The fact remains that there was general agency agreement between the parties and they had acted upon it for a long time. It is not the defendants' case that there was no agreement. Since the GSA did exist and the arbitration agreement being a part of it, it is obvious that the arbitration agreement would not become void regardless of the fact whether there was or not earlier agreement between the Aeroflot and PIA."
23. As regards the contention of learned counsel for the appellants that the award was made by the Arbitrators without going into the evidence of both the parties and that the Award does not set out the reasons, it may be observed that when the proceeding of the arbitration was commenced, the appellants attended the proceeding regularly on 14.11.1996, 19.12.1996 and then on 09.01.1997 when the appellants filed reply to the statement of respondents; thereafter, the appellants continued to attend the hearing before the Arbitrators on 06.02.1997, 27.02.1997 and 14.03.1997 and thereafter the appellants ceased appearance before the Arbitrators. So much so, appellants failed to lead any evidence in support of their pleadings, as such, the appellants were all the time aware of the arbitration proceedings and if they had chosen to remain absent in subsequent proceedings before the Arbitrators, then the Arbitrators had no choice but to proceed in the .Absence of appellants. It may further be observed that the Award has been given by the Arbitrators by assigning reasons to the Issues framed, which does qualify as speaking award.
24. So far as the contention of learned counsel for the appellants is concerned with regard to the fee of the Arbitrators, it may be examined that the Court can interfere in the question of fees of Arbitrators under Section 38 of the Act only if such fees are exorbitant. In this particular case it may be seen that the Arbitrators and the Umpires are retired Judges of the High Court and the Supreme Court of Pakistan, therefore, the fees charged by the Arbitrators appears to be quite reasonable. As regards taking effort for appointment of sole arbitrator, the arguments advanced by the learned counsel for the respondents are considerable that it was in fact the appellants who frustrated the attempt of respondents for resolving the dispute through sole arbitrators.
25. The respondents in their cross-objections have claimed interest at the rate of 15% from the date of Award to the date of realization of the amount on account of difference in US Dollar exchange rate between 25.08.1997 to the date of realization of the awarded amount. The Arbitrator does not enjoy the power of the Court and as such cannot award future interest because it is only a Court, which can award such interest vide Section 29 of the Act read with Section 34 of C.P.C. It may be noted that the respondents had claimed aforementioned interest in their reply to the application under Sections 30 and 33 of the Act filed by the appellants in Suit No,308 of 1998; however, there appears no discussion or findings on it in the impugned Judgment and Decree; hence the respondents have filed cross-objections for the said relief. We are of the view that since the respondents' money remained blocked for more than 20 years and as the value of money has considerably devalued, the respondents deserve at least to be marginally compensated in all fairness.
26. So far as the case-law cited by the learned counsel for the appellants, the same are distinguishable from the facts of this case.
27. We, therefore, dismiss this High Court Appeal being devoid of any merit; however, accept the cross-objections and allow interest at the rate of 6% per annum from the date of Award to the date of realization of the decretal amount payable to the respondents by the appellants Rs,32,503,066.60. The Decree shall accordingly be modified to this extent the circumstances of the case, we leave the parties to bear their own cost of the appeal as well as the cross-objections.