SHAKIL-UR-REHMAN KHAN, J.---- I intend to decide the instant civil revision along with C.R. No.25012 of 2019 and C.R. No.25014 of 2019 as common question of law arise out of these matters and the parties to these petitions are also common. Moreover , through all these petitions the orders dated 12-02-2019 have been challenged.
2. It transpires from the record that the respondent in all these three petitions was given the following three contracts for construction of the following balance works of UET at Sub-Campus, Narowal:- 1) Boys Hostel; 2) Electrical Engineering Departments; and 3) Mechanical Engineering Department.
After having entered into the above three contracts, disputes arose between the parties and finally the said contracts were rescinded. The respondent filed a petition under Section 20 of the Arbitration Act, 1940. The respondent through his above noted application raised as many as 15 matters to be referred to arbitration. The petitioners were summoned by the learned lower Court and accordingly they filed their reply with the contention that the matter be referred to arbitration. Accordingly , the parties were directed to submit the names of the arbitrators. The respondent nominated one Muhammad Saeed Akhtar as the arbitrator on its behalf and the petitioners nominated one of its Project Directors as their arbitrator . Subsequently , the petitioners submitted an application under Section 151 of the Code of Civil Procedure, 1908 against the nomination made by the respondent, with the contention that under the provision of clause 65 of the contract, the contractor/respondent was bound to nominate his arbitrator from one of the Project Directors of the Universi ty. It was further contended that the contractor was to nominate its Project Director , other than the In-charge Project Director . Accordingly , it was their stance that the nomination of Muhammad Saeed Akhtar as the arbitrator of the contractor/respondent be cancelled and a Project Director of the University be appointed as its arbitrator . The learned Court after having heard the arguments of both the sides dismissed the application of the petitioners through the impugned orders in all the three matters, all dated 12-02-2019.
3. Learned counsel for the petitioners has raised points relating to the factual matrix and the background of the three contracts and highlighted the 'alleged' defaults of the respondent. It would be apt to note here that I have deliberately not referred to the same, least it may prejudice the case of either of the parties, during the course of arbitration which is yet to take place betw een the parties and also in view of the order that I intend to pass in these matters. Moreover , the issue before this Court in these matters relates to only one issue, that is, the appointment of an arbitrator by the respondent under clause 65 of the contracts entered into, by and between the parties.
4. In order to resolve the controversy it is necessary to consider the relevant provision of clause 65 (d), which provides as follows:- "In case the amount of the claim referred is over half a million rupees, the dispute shall be referred to the award of two arbitrators, to be appointed from the Project Directors of the department, other than the Project Director in-charge of the work, one to be nominated by the Vice-Chancellor of the University and the other by the contractor . In the case of the said two arbitrators not agree ing, the case shall be referred to the award of an umpire who shall be a professor of the University not below the rank of full professor to be appointed by the Vice-Chancellor . The decision of the two arbitrators/umpire, as the case may be shall be final and binding on the parties concerned. Where the matter involves claim for the payment of recovery or deduction of money only, the amount, if any, awarded in the arbitration shall be recoverable in respects of the matter so referred."
5. Learned counsel for the petitioners after referring to the above noted clause of the contract stated that one arbitrator was to be appointed by the Vice-Chancellor of the University and the other by the contractor/respondent from the Project Directors of the University . He further explains that the Project Director so nominated by it had to be anyone other than the one who was In-charge of the said project. He furthe r states that the nomination of Muhammad Saeed Akhtar as arbitrator is in clear violation of the above noted clause of the contract, therefore, it had to be cancelled. He further explains that through the impugned orders, all dated 12-02-2019 the learned lower Court rejected the request of the petitioners and appointed the nominee of the respondent as its arbitrator . He points out that the impugned orders dated 12-02-2019 are illegal and are liable to be set aside. The learned lower Court committed an illegality as well as an irregularity while passing the said impugned orders and failed to appreciate the relevant clause of the contract entered into by the parties. In order to strengthen his arguments he has referred to the cases reported as Muhammad Anwar and others v. Mst. Ilyas Begum and others (PLD 2013 SC 255), Bank of Punjab and another v. Haris Steel Industries (Pvt.) Ltd. and others (PLD 2010 SC 1109), Malik Shahid Mehmood v. Malik Afzal Mehmood and others (2011 SCMR 551), Syed Mahmood Akhtar Naqvi and others v. Federation of Pakistan and others (PLD 2013 SC 195) and E.A. Evans v. Muhammad Ashraf (PLD 1964 SC 536 ).
He adds that the respondent had willingly and with his free consent entered into the agreements with the petitioners. It is a leading construction company and has wide experience. He further states that by virtue of the above noted Ouse, no principle of natural justice has been defeated, nor it has caused any prejudice to the contractor/respondent. He explains that the format of the agreement/contract is being followed by the provincial government since many years and there has been no change in the said format. In this view of the matter , he states that while setting aside the impugned orders dated 12-02-2019, the respondent be directed to appoint its arbitrator from amongst the Project Directors of the University/petitioners, other than the In-charge Project Director of the works.
6. A plain reading of the impugned orders dated 12-02-2019 depicts that both the parties had agreed upon referring the disputed matters to the arbitrators but the only controversy between them was and still is, the nomination of the arbitrators by them. The learned lower Court after having heard the learned counsel for the parties and also taking into consideration clause 65 of the contract, as well as the provisions of Section 20 of the Arbitration Act, 1940 and also relying upon the case reported as Allied Engineering Consultants (Pvt. ) Ltd. v. Messrs Sui Gas Transmission Company Ltd. (1989 CLC 1143), concluded that, in order to provide equal justice, an opportunity to redress the grievance of both the parties, it is necessary that neutral arbitrators be appointed from the nominations of both the parties, so that none can be prejudiced to defend its cause. Accordingly , the objection raised by the petitioners on the nomination of Muhammad Saeed Akhtar was turned down.
7. The question regarding the appointment of arbitrator , under an identical situatio n came before this Court in the case titled as M.A. Ghani Soofi & Sons v. The Federation of Pakistan reported as (PLD 1957 (WP) Lahore 363), wherein the appellant had entered into an agreement with North Western Railway for execution of some earth work and under para 46 of the general conditions of the contract provided that in case of any dispute the matter shall be referred to the arbitration of a Railway Engineer to be nominated by the Agent of the Railway Administration. Subsequently , certain claims were raised by the appellant which were turned down by the Railway Administration and the appellant claimed that the matter be referred to arbitration. The Railway Administration refused to appoint an arbitrator on the ground that there was no "dispute" between the parties, within the terms of the agreement. The appellant, therefore, approached the Court through an application under section 20 of the Arbitration Act, 1940. The learned lower Court referred the matter to arbitration and also directed the parties to propose the names of two arbitrators, one by each under another arbitration clause, that is, Condition No.14 of the contract. Under this Condition No.14 one arbitrator was to be named by each party . On the other hand, under para- 46 the arbitrator was the Railway Engineer to be appointed by the Agent. Accordingly , an application was submitted before the learned Civil Judge for reviewing his order , which was accepted and para-46 was substituted instead of para-14 and it was directed that the matter be referred to the arbitration of the Railway Engineer to be nominated by the said Agent. This Court while dismissing the appeal held that the appellant never objected to any part of para-46 as invalid. It was further noted that it was bound by its pleadings and that it will not be proper to consider the contention of the appellant with respect to the unenforceability of the said clause. However, it was also observed as follows:- "I must state that I do not agree that in all cases the fact that the interest of the arbitrator was known to the party that now impeaches his appoin tment would debar all objections being taken by that party . Even though a party has for some reason accepted such a person as an arbitrator , we may relieve him of the consequences of the act if not to do so would be opposed to public policy . It is essential that private tribunals like Courts should give the parties the essence of justice and it is not at all desirable that they should act as arbitrators in circumstance which may throw doubt on whether the matter has been decided justly and fairly , the limitations of that rule. At the same time it may be possible to avoid a reference to an employee by finding in the words of section 20(4) that "sufficient cause" exists I am conscious of the agreement that the fact that the person named as arbitrator had an interest cannot invalidate an agreement, there being no statutory bar to such an agreement. But I am of the opinion that the absence of a statutory bar does not exclude the application of a rule of public policy though it is not necessary to state the extent or for not making a reference. This would not, however , affect cases where an award has already been made. I think the proper course would be an amendment of the Arbitration Act so as to add a provision allowing the Court a discretion to revoke even a valid submission if the circumstances justify it, like the one that exists in the Englis h Arbitration Act. In our Arbitration Act, as it stands at present, although there is provision for the revocation of the authority of an arbitrator in section 6(2), there is no similar provision for revoking a subm ission altogether . Position in England was the same before the Arbitration Act (English) was amended in 1934. In the Act of 1934, however , they introduced section 14(1), the effect of which is that the Court is able to grant relief even in a case wher e the interest of the arbitrator was known to the parties at the time they entered into an agreement and to allow the submission to be revoked altogether ."
8. In the case reported as News Publication (Pvt.) Ltd. and 4 others v. National News Agency and another (1999 PLC 1613) , the question before the Court was that whether a party to the dispute could be appointed as an arbitrator . It was held that appointing such a person as an arbitrator and referring to him the dispute between the parties would amount to making him a judge of his own cause which would be nothing but a mockery of justice. He being a party to the suit as a contesting defendant shall not be able to act fairly, justly , independently and without bias. While dismissing the appeal the decision of the learned Trial Court whereby it had refused to appoint the said person as the arbitrator for the resolution of the dispute between the parties was upheld. It is further noted that in the case reported as Rasheeda Begum v. Ch. Muhammad Anwar and others (PLD 2003 Lahore 522), amongst other questions, the issue of appointment of a party as an arbitrator came under consideration. On this particular issue it was held as follows:- "9. Now coming to the question if the parties to a dispute can validly; appoint anyone of them as an arbitrator . Suffice it to say that under general rule, if the parties out of their free-will and consent appoint a third person knowingly fully well his relations with anyone of the party to the dispute, such arbitration agreement and the award pronounced thereupon shall not be invalid on the principles of bias. But it is a fundamental rule of natural dispensation of justice, that no person shall be a Judge in his own cause. For example, if there is a dispute only betw een two persons and both entered into an agreement for resolution of dispute by one of them, it is inconceivable that such an agreement shall be an arbitration agreement.
Because according to the definition of the arbitration agreement in the Act, the basic object and the spirit underlying seeking the resolution of a dispute inter se the parties through arbitration is by making the reference to a natural and impartial third person. It may be pertinent to state here that under the law, the arbitration is in the nature of quasi judicial forum of the parties' own choice but with all the requisites and traits, recognizing the right of every litigant party , to seek, as far as possible the resolution of his dispute from an independent and impartial forum. This necessarily excludes a party to the dispute to be that forum, on the maxim, nemo debet esse judex in propria causa (no one can be a Judge in his own cause), which has been explained in the judgment reported as Fazal Din, alias Mina and 2 others v. Commissioner , Peshawar Division and another (PLD 1968 Peshawar 30) and the following paragraph of the dictum reads as follows:- "It is well-settled law that no one can be a Judge in his own cause and this is based on the principle nemo. debet esse judex in propria causa; The doctrine of bias is one of the important principles of natural justice.
In respect of judicial or quasi-judicial tribunals (a) no man shall be a Judge in his own cause and (b) justice should not only be done, but manifestly seem to be done. The same principles apply also to administrative authorities though they are not in the Courts of justice but perform quasi-judicial functions inasmuch as they may have to decide the rights of others."
Applying the above rule to the facts of the present case, it is manifest from the record and the award itself, that Muhammad Asghar was a party to the dispute, thus irrespective whether the dispute was also amongst other brother and sisters also yet having personal interest in the cause, he could neither have been validly appointed as an arbitrator , nor could have made a valid award. It may be relevant, to mention here that Muhammad Asghar in the award has allocated, a share to himself. This error from the bare reading of the award is floating on the face of the award, thus notwithstanding if the objections were not filed by the appellant the Court should in the exercise of its suo motu jurisdic tion have refused to make the award rule of the Court."
9. Keeping the above principles in view as well as the provisions of Article 10-A of the Constitution of the Islamic Republic of Pakistan, 1973, it is imperative to note a few admitted facts between the parties, the same being that the respondent is the second contractor brought in by the petitioners/ University for completion of three contracts pertaining to the Boys Hostel and two Departments of its sub-campus at Narowal. All three contracts have been rescinded by the University . In such circumstances a huge amount of public money is involved and in view of the delay , price escalation, wastage of valuable time of the students and loss of public money are only a few features which immediately come to the mind of any man of ordinary prudence.
10. Another important aspect of the matter in hand that the respondent in his application under Section 20 of the Arbitration Act, 1940 pointed out that besides direction and directive of the Government of Pakistan and Pakistan Engineering Council, to use the new version of the contracts harmonized with PPRA Rules, the officials just to fulfill the thrust of their ill intent used the old version and that the Vice-Chancellor of the University as well as the Project Director remained directly party to all the matters, sitting in negotiations and will be biased while deciding the questions of arbitration hence it is in the interest of justice, fair play and equity that an independent arbitrator be appointed for deciding the matters raised through the said application. The response submitted by the petitioner University to these paras was nothing but vague and did not address the issues raised by the respondent through its application under Section 20 of the Arbitration Act, 1940. Furthermore, when the petitioner University raised the objections through its application before the learned lower Court, regarding the nomination of Muhammad Saeed Akhtar as the arbitrator of the respondent, the respondent through its reply , clearly expressed its fear of an unjust decision from the petitioner University and it was submitted that either the arbitrator be nominated by both the parties independently or an arbitrator be appointed by the said learned court, independently . It was again pointed out that the petitioners/University and its allies deliberately used the old version of the contract which is obsolete and a notification has been issued by the Government of Pakistan not to use the old version but the use of old version shows that mala fide of the petitio ners just to fulfill the thrust of their ill intent. It is in this background that it may be noted that, it cannot be held in all cases and circumstances thereof that the named arbitrator would not be authorized to arbitrate between the parties. However , in special circumstances, as noted above in this case, the respondent cannot be directed to nominate one of the employees of the petitioners University , as its arbitrator .
11. I have also gone through the judgments relied upon by the learned counsel for the petitioners. In all these cases the principle of law was stated to be that where the law requires an act to be done in a particular manner it has to be done in that manner alone and such dictates of law should not be termed as technicality and also that nobody could be allowed to do indirectly what the law barred him from doing directly . No doubt these principles of . law are accepted norms, however , the facts and circumstances of the instant case, as noted herein, have no application of these principles. The learne d trial Court was fully empowered, in view of the governing provisions of the Arbitration Act, 1940 to pass the impugned orders all dated 12-02-2019.
12. For what has been discussed above, the impugned order dated 12-02-2019 has been passed strictly in accordance with law and therefore, are not liable to be interfered with. Accordingly , these civil revision are dismissed as no illegality or irregularity has been pointed out.