ARBAB MUHAMMAD TAHIR,J.:- This Regular First Appeal under Section 39 of the Arbitration Act, 1940 (hereinafter referred to as "the Act") is directed against order and decree dated 14.03.2015 passed by the learned Civil Judge-West, Islamabad through which, the learned Civil Court made Award dated 15.10.2014 (hereinafter referred to as "the Award") as a Rule of Court and passed an order and decree in terms thereof in the following terms:- "... therefore, the award is made rule of the Court and suit is decreed that the plaintiff is entitled for Rs.43,38,161/- along with interest at the prevailing bank rate from the date of decree of this court with no order as to costs. Decree sheet be prepared accordingly...."
02. The essential facts forming background of the present appeal are that on 01.05.2007 a Contract for Provision of Security Guards (hereinafter referred to as "the Contract") was entered into between Pakistan Telecom Mobile Limited (hereinafter referred to as "the appellant") and M/s Safety & Security Services (Pvt.) Limited (hereinafter referred to as "the respondent") for provision of security guards completely from ex-servicemen as per the demand of appellant. Since respondent No.2 (Pakistan Telecommunication Company Limited) has been impleaded as a proforma respondent and no specific relief has been sought against it, hence, the said respondent need not be referred to. The Contract was entered into between the parties in consideration of the payments that were to be made by appellant to respondent according to the provisions set-forth in the terms and conditions described in Annexure-A attached with the said Contract. The Contract was valid with effect from 01.05.2007 to 30.04.2008 and thereafter was to be renewed/extended from time to time subject to mutual understanding between the parties. That performance of respondent was poor and the Security Guards deployed by it were also not performing their duties diligently, thus, on 09.10.2009, appellant informed the respondent that it is not willing to renew the Contract and on 19.03.2010 a notice for termination of the same was given to respondent. That aggrieved by said termination, respondent filed a suit for recovery of Rs.11,838,161/- against appellant. That appellant filed an application under Section 34 of the Act praying inter alia for stay of proceedings and for dispute to be referred to arbitration since the Contract contained an arbitration clause. That appellant's said application was by learned civil court and proceedings in the suit were stayed and matter was referred to arbitration. That the entire amount that was claimed by respondent was Rs.11,838,161/-. That learned Arbitrator entered upon the reference and announced the Award on 15.10.2014 thereby allowing respondent's claim to the tune of Rs.43,38,161/- along with interest at the prevailing bank rate from the date of award till realization of the amount. However, rest of respondent's claim was declined. The said Award was filed in the Court. Appellant filed objections to the said Award, which were turned down.
Consequently, the Award was made a Rule of Court in the above-mentioned terms. Hence, this appeal.
03. Learned counsel appearing on behalf of appellant has argued that the details qua a sum of Rs.43,38,161/- was neither mentioned by respondent in its plaint nor in the written claim submitted by it before learned Arbitrator. That Contract executed between the parties was initially for a period of one year ending on 18.04.2008, but appellant, as a gesture of goodwill, continued to extend the same till 18.04.2010 and finally it terminated the same on 19.04.2010. That under the terms & conditions of said Contract, it was respondent No.1's responsibility to give protection to the properties belonging to appellant. That performance of respondent was not up to the mark. That appellant time and again informed respondent regarding its poor performance as well as increasing number of incidents regarding theft of fuel / diesel, electricity and other valuable equipments, which caused huge financial loss to appellant. That Security Guards deployed by respondent often remained absent from their duty places. That respondent's claim amounting to Rs.19,49,387/- was not just undue but also uncertain. That on 09.10.2009, appellant conveyed its unwillingness to respondent as to the renewal of Contract. That since an advance notice dated 19.03.2010 had already been given to respondent, hence, the award of 15-day payment amounting to Rs.10,53,871/- in lieu of 30 days advance notice, was not justified. That respondent did not pay salaries to its employees/guards. That learned Arbitrator did not take into account the documents produced by appellant viz-a-viz notice for termination, payment of balance amount to respondent, illegal electricity connections and absence of the guards from the site etc. That the impugned order and decree passed by learned civil court is against facts as well as law. That Award rendered by learned Arbitrator is devoid of reasons in terms of Section 26-A of the Act. That there are various violations regarding principle of natural justice. That learned Arbitrator as well as learned civil court have fallen into an error of law by allowing respondent's claim. That order and decree of learned civil court is bad in the eye of law, thus, needs to be interfered with by this Court, concluded learned counsel for appellant.
4. Conversely, learned counsel appearing for respondent has vehemently controverted the arguments advanced at the Bar by learned counsel for appellant by arguing that appellant terminated the Contract without giving any notice to respondent. That no joint inquiry was conducted as envisaged under Clause 4.3 of Contract. That learned Arbitrator did give credence to the evidence led by both the parties. That the issues framed by learned Arbitrator were fully discussed. That Award rendered by learned Arbitrator does not suffer from any irregularity. That Award is not open to an interference by this Court. That this Court cannot substitute its findings for those of learned Arbitrator. That the Award cannot be disturbed by this Court unless there are apparent errors on the face of it. That appellant's witnesses categorically admitted the tenure of Contract to be until 19.05.2010. That had there been any complaint regarding respondent's performance, the appellant could have conducted a joint inquiry. That no grounds exist which could lead to the setting aside of Award and/or the impugned order and decree, concluded learned counsel for respondent. While concluding the arguments, learned counsel for respondent relied upon the cases reported as PLD 1987 SC 393, 2001 SCMR 1700, PLD 2011 SC 506, 2012 SCMR 954, 2012 MLD 23, 2014 SCMR 1268, 2015 CLC 1387, 2015 SCMR 21 and 2018 SCMR 662.
5. Heard the contentions advanced at the Bar and perused the record with able assistance of the learned counsel for the parties.
6. The challenge that has been thrown by the appellant to the order and decree passed by the learned Civil Court is primarily on the ground that the learned Civil Court fell into an error and committed an illegality by making the Award as Rule of Court on account of it being based on whimsical grounds and bereft of any reasons in terms of Section 26-A of the Act. In the lis in hand, the reference of dispute to arbitration by learned civil court through order dated 31.05.2015 has not been called into question by the appellant at all. The questions that need to be determined in the present lis are two folds. First being as to whether or not the Court, in the absence of an application under Section 20 of the Act, could stay the proceedings in the suit on account of the existence of an arbitration agreement between the parties to the suit and refer the matter to arbitration in terms of Section 34 of the Act. Secondly, whether or not the leaned Arbitrator travelled beyond the scope of the reference and/or the arbitration proceedings.
7. This Court, at the first instance, would deal with the first question regarding stay of proceedings and reference of dispute to arbitration in the absence of an application under Section 20 of the Act.
8. Perusal of record transpires that on 28.07.2011, a civil suit bearing No.200 of 2011 was filed by respondent for recovery of Rs.11,838,161/- on account of financial loss, mental agony as well as injury to its unblemished reputation inter alia on the ground that appellant illegally terminated the Contract on 19.04.2010 without serving any prior notice on respondent as well as non-payment of a "half-month's" contract price based on last monthly verified bill of the security company, thereby breached the terms and conditions of Contract. The record is silent as to whether or not the appellant filed its written statement to the suit. Be that as it may, the Contract itself contained an arbitration clause providing for disputes and differences between parties to be settled at first instance through amicable negotiations, but in case of failure, the same were to be referred to sole Arbitrator, and the Award rendered by Arbitrator was to be deemed as final and to be binding upon both the parties. Clause 7.1 of Contract relates to reference of dispute to arbitration, which reads thus:- "7.1. In the event of any dispute arising between SSSL and the client out of or in relation to this contract, SSSL and the client shall attempt in the first instance to resolve such dispute through friendly consultations. If the dispute cannot be resolved through mutual consultations with in sixty (60) days after one party has served written notice on the other party requesting the commencement of such consultations, then the disputes shall be finally settled by arbitration.
The dispute shall be referred for arbitration in Rawalpindi/Islamabad to a sole arbitrator if one can be agreed upon or two arbitrators (one each to be appointed by each party) and an umpire (to be appointed by the arbitrators before their entering upon the reference) in accordance with the Arbitration Act, 1940 or any amendment thereto or re-enactment thereof for the time being in force. The arbitration award shall be final and binding on the parties. The arbitration fee shall be borne by the losing party or as otherwise provided in the arbitration award."
(Emphasis supplied)
09. Under the terms & conditions of Contract, it was mutually agreed upon by parties that if the disputes between the parties were not resolved through amicable negotiations, the matter was then to be referred to arbitration in Rawalpindi/Islamabad to a sole Arbitrator if one can be agreed upon or two arbitrators (one each to be appointed by each party). There is nothing on record which would show that after disputes arose between the parties, the appellant has served a written notice on the respondent requesting the commencement of any consultations proceedings. It appears that dispute, which is subject matter of this appeal, could not be resolved through amicable settlement between the parties since apparently neither party resorted to amicable settlement, therefore, during the course of proceedings before learned civil court, appellant, after filing memo of appearance, filed an application under Section 34 of the Act praying for the proceedings before the learned Civil Court to be stayed. For sake of reference, Section 34 of the Act reads as under:- "34. Power to stay legal proceedings where there is an arbitration agreement.
Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration such authority, may make an order staying the proceedings."
10. It is an admitted fact that the appellant did not file an application under Section 20 of the Act.
The said Section reads as under:- "20. Application to file in Court arbitration agreement. (1) Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in the Court.
(2) The application shall be in writing and shall be numbered and registered as a suit between one or more of the parties interested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants, if the application has been presented by all the parties, or, if otherwise, between the applicant as plaintiff and the other parties as defendants.
(3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement other than the applicants, requiring them to show cause within the time specified in the notice why the agreement should not be filed.
(4) Where no sufficient cause is shown, the Court shall order the agreement to be filed, and shall make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or, where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court.
(5) Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act so far as they can be made applicable.
(Emphasis supplied)
11. Although the appellant did not file any application under Section 20 ibid, but upon filing an application under Section 34, the appellant showed its willingness and readiness to the effect that the proceedings in the suit ought to be stayed so that the issue could be resolved through proper conduct of arbitration proceedings. The application filed by appellant under Section 34 of the Act is also not on the record, however, order dated 02.05.2013 passed in the said application under section 34 is on record. Had the said application been on the record, it could have easily been ascertained as to whether or not appellant had made up its mind qua reference of dispute to arbitration. Furthermore, filing of said application under Section 34 of the Act would imply that the appellant was ready and willing for the matter to be referred to arbitration and was also ready to accept the Award rendered by the Arbitrator in terms of Clause 7.1 of the Contract particularly under the circumstances when it did not specifically take objections to the passing of orders dated 02.05.2013 and 31.05.2015.
12. Apparently, a reply was filed by respondent resisting the application under Section 34 of the Act.
Perusal of order dated 02.05.2013 passed by learned civil court shows that the application under Section 34 of the Act was allowed and the proceedings before learned civil court were stayed.
Simultaneously, the parties were directed to furnish the list of Arbitrators on the next date of hearing before the learned civil court. Order dated 31.05.2015 shows that the parties could not finalize the names of Arbitrator(s), hence, the learned counsel for respondent left the matter of appointment of sole Arbitrator at the discretion of Court. Since appellant did not comply with the directions contained in order dated 02.05.2013 nor did it object to the appointment of Arbitrator by learned civil court, the learned civil court vide order dated 31.05.2015 appointed Sardar Muhammad Aslam, ex-Chief Justice of Islamabad High Court (as he then was) as the sole Arbitrator. For sake of clarity, the relevant excerpt of said order dated 31.05.2015 is reproduced as under:- "...Therefore, parties were asked to file the list of Advocates for their appointment as Arbitrator.
However, the learned counsel for the plaintiff put his appearance and submitted that the parties have not reached into compromise, therefore, the matter may be referred to the Arbitrator in view of order dated 02.05.2013. Further he has no objection to appoint any Senior Advocate as Arbitrator. Whereas the defendant did not submit names of Arbitrators and statedly the order dated 02.05.2013. Since only one party has given names of the lawyers for the appointment as sole Arbitrator. Therefore, Mr. Sardar Muhammad Aslam Ex-Chief Justice of Hon'ble Islamabad High Court, Islamabad is hereby appointed as Arbitrator with the mandate to conduct the proceedings regarding dispute and submit the award within stipulated period as per Arbitration Act from the date receive reference. Further fee of the Arbitrator shall be fixed by the respected Arbitrator himself which will be paid by the parties equally."
13. Perusal of Contract would reflect that the arbitration was to be conducted without the intervention of Court, but after passing of orders dated 02.05.2013 and 31.05.2015, it has neither been pleaded in the grounds of appeal that the arbitration was to be conducted without intervention of Court nor any objection in respect thereto has been taken by appellant at any stage. Thus, the reference of the dispute to Arbitration by the learned Civil Court has not been disputed meaning thereby, it was with the intervention of the Court (in terms of Section 20 of the Act) to which, the appellant did not raise any objection. Had there been any objection as to the reference of dispute by learned civil court without there being an application under Section 20 of the Act, the same could have been taken in the pleadings or the order whereby the learned sole Arbitrator was appointed, could have been challenged before an appropriate forum. By not doing so, the appellant submitted itself to the jurisdiction of the Court and made up its mind qua reference of the dispute to arbitration by learned civil Court without thereby being an objection in this regard on its behalf.
14. Since appellant filed the application under Section 34 of the Act, which was allowed by the learned Court below and the proceedings were stayed vide order dated 02.05.2013. It appears that the learned trial Court with an implied intention of appellant referred the matter to arbitration. The arbitration proceedings ensued wherein, appellant actively participated by filing its written reply to the claim of respondent. In the said reply also, no objection regarding the conduct of arbitration proceedings by the learned Arbitrator was taken. In the said reply, appellant simply refuted the allegations of respondent and prayed as under:- "In light of the foregoing it is humbly requested that the claim of SSS Company may kindly be rejected with full cost of proceedings and fee of arbitration."
(Emphasis supplied)
15. This Court in the case titled BNP (Pvt.) Limited Vs. Collier International Pakistan (Pvt.) Limited (2016 CLC 1772 Islamabad) after thorough discussion qua reference of dispute to arbitration has held as follows:- "10. Section 34 of the 1940 Act has been enacted to make arbitration agreements effective and prevent a party from going to the Court contrary to his own agreement. Where parties have agreed to refer disputes to arbitration, the Court should as far as possible, give an opportunity for resolution of disputes through arbitration rather than by judicial adjudication. The power conferred upon the Court to grant stay under Section 34 of the 1940 Act is entirely a matter of discretion of the Court. But the Courts should see that the parties are held to their bargain and promote the sanctity of contracts. Stay of proceedings in a suit is a more expedient and proper course to follow where there is an arbitration clause in a contract. The moment an application under Section 34 of the 1940 Act is filed in a pending suit, further progress thereof is automatically arrested and the trial Court's power to act under the Code of Civil Procedure, 1908, is suspended till decision is rendered on the application."
(Emphasis supplied)
16. Furthermore, it was held as follows:- "12. In view of the above, the contention of the learned counsel for the appellant that the pre- condition for a reference to arbitration had not been satisfied is spurned as pre-mature at this stage of the case. Once the Court stays the proceedings in the suit, the parties are left whether to institute arbitration proceedings with the intervention of the Court (under Section 20 of the 1940 Act), or without the intervention of the Court (under Chapter II of the 1940 Act). However, where the parties to the suit, who are also parties to an arbitration agreement executed prior to the institution of the suit, jointly apply for the matters in dispute between such parties to be referred to arbitration, the Court may treat such an application as an application under Section 20 of the 1940 Act, and refer the disputes to arbitration." (Emphasis supplied.)
17. The learned Arbitrator entered upon the reference, who after recording pro and contra evidence, rendered the Award and filed the same in Court under Section 14 of the Act. On 08.12.2014, objections were filed by appellant seeking setting aside of the Award. The objections which were taken in the objection petition were inter alia to the effect that the Award was against the facts as well as evidence available on record. Furthermore, it was pleaded that the Award is based on whimsical grounds, without any valid reason, bereft of reasons and without application of judicial mind. However, the sole objection that was taken by appellant in its objection petition was that it came to know about the contents of Award on 26.11.2014 when the Award was filed in Court. For sake of clarity, the said objection is reproduced as under:- "that the petitioner / defendant No.1 received notice from this Honourable Court and appeared in this Honourable Court and came to know on 26.11.2014 that award has been submitted in this Honourable Court and thereafter the petitioner came to know about the contents of decision of the award."
18. Order dated 24.06.2014 passed by learned Arbitrator shows that counsel for both the parties were present and the respondent was permitted to file its claim with an advance copy to learned counsel for appellant. On 28.06.2014 again the counsel for parties were present and the reference was filed. It was directed that reply be filed by 02.07.2014. On 02.07.2014, again attendance of both the counsel was marked. Since reply was not filed hence, the proceedings were adjourned to 03.07.2014. On the said date, yet another adjournment was sought for filing of reply on behalf of appellant. It was not until 11.08.2014 that a reply was filed on behalf of appellant. Since time was of the essence, learned Arbitrator expedited the arbitration proceedings and on 18.08.2014, he framed the issues. In the said order dated 18.08.2014, it was directed that affidavit in evidence be filed by respondent on 20.08.2014 with an advance copy to appellant's counsel and proceedings were adjourned to 25.08.2014. After recording of evidence and discussing each issue, learned Arbitrator announced the Award on 15.10.2014 and a notice in terms of Section 14(2) of the Act was given to learned counsel for parties. All these facts negate appellant's stance that it was not in the knowledge of arbitration proceedings and the Award was announced by learned Arbitrator while keeping it in the dark particularly when the appellant took time on a number of occasions to file written reply against respondent's claim, it had obvious knowledge of filing of Award in Court in particular when order dated 15.10.2014 was passed by learned Arbitrator announcing the Award. In the circumstances, no further notice was required to be issued under Section 14(2) of the Act, but learned Arbitrator as a matter of precaution sent notice under Section 14(2) ibid.
19. The case in hand is a lamentable example of a deliberate evasion on part of appellant, who filed an application under Section 34 and got the proceedings in the civil suit filed by respondent to be stayed, but for the reasons best known to it, did not bother to file application under Section 20 of the Act or at least could have taken an objection regarding jurisdiction of civil Court regarding reference of dispute to arbitration in the absence of an application under Section 20 to the Act, and notwithstanding the fact that it got an adverse verdict from civil court, it persisted in filing the appeal in consequence whereof, neither side has been able to get the dispute settled till today. It appears that had the Award been in appellant's favour, it could not have filed the present appeal.
20. Although the learned civil court could not have referred the dispute to arbitration particularly in the absence of an application under Section 20 of the Act and just have stayed the proceedings in the suit leaving the parties to invoke the arbitration clause in the agreement and to have their disputes resolved through arbitration without the intervention of the court, but since the appellant in none of its pleadings / replies has taken any objection whatsoever as to the reference of dispute by learned civil court to arbitration, much water has already been flown under the bridge inasmuch as the learned civil court stayed the proceedings ever since 02.05.2013, the learned Arbitrator rendered the Award on 15.10.2014, learned civil Court made the said Award as Rule of Court on 14.03.2015, against which this appeal is pending adjudication ever since 2015, thus, this Court, under these circumstances, deems it appropriate not to undo/vitiate the entire proceedings which took sufficient time stretching over a period of more than one decade (since the date of the institution of the suit i.e. on 28.07.2011) particularly when no expressed objection whatsoever was raised by appellant at any material stage regarding reference of dispute to arbitration by the learned Civil Court in the absence of application under Section 20 of the Act.
21. It is my view that an arbitration clause set out in the agreement should be honoured but a party, which seeks to avail the benefit of Section 34 of the Act ought to, at the first instance, clarify its position as to its willingness and readiness to resort to arbitration proceedings. In the event, a party does not inform the Court about its intention of resorting to arbitration and allows the suit to proceed, such conduct of party would indicate its intention to abdicate its claim and to have the dispute resolved under the arbitration clause, and also to have thereby forfeited its right to stay of proceedings in Court. Reliance in this regard is placed upon the case titled Pakistan International Airlines Corporation v. M/s Pak Saaf Dry Cleaners (PLD 1981 SC 553), whereby the Hon'ble Supreme Court, after making reference to Section 34 of the Act held as follows:- "The Legislature has, of course, clearly implied in the language used in the section that the arbitration clause should be respected, but has also made it abundantly clear that the party seeking to avail of the provision of stay under this section must clarify his position at the earliest possible opportunity, so as to leave no manner of doubt that he wishes to have resort to arbitration proceedings. If he hesitates in this regard, or allows the suit to proceed in any manner, that conduct would indicate that he has abdicated his claim to have the dispute decided under the arbitration clause, and to have thereby forfeited his right to claim stay of the proceedings in the Court,"
(Emphasis supplied)
22. In the case titled Mst. Surriya Rehman v. Siemens Pakistan Engineering Company Limited (PLD 2011 Karachi 571), the Hon'ble Sindh High Court has held as follows:- "While it would be desirable for a defendant moving an application under section 34 to specify with some exactitude the dispute that ought to be referred to arbitration, a failure to do so should not be regarded as fatal. The reason for this, in my respectful view, is twofold. Firstly, it is well settled that if parties have chosen to refer their disputes to a domestic forum of their own choice, that choice should be honored to the maximum extent possible, and the parties should be directed to have the dispute resolved by that forum (i.e., by arbitration). To simply dismiss an application for stay of suit on a rather technical ground may result in the court being forced to proceed with a dispute that ought to have been arbitrated. Secondly, even if the court is put to some inconveniency as a result of the defendant's failure to specify the dispute that ought to have been referred to arbitration, that inconvenience does not create an insurmountable burden. The reason is that the plaint must, after all, disclose a cause of action, and the defendant's objection that the matter be referred to arbitration can only be in respect of the cause of action disclosed in the plaint, either in whole or in part. It is normally not difficult to extract the cause of action from the contents of the plaint and thus, in effect, to identify the dispute that ought to be referred to arbitration. It is also to be noted that section 34 does not, as such, require that the defendant must specify the dispute in his application. It follows therefore that in my respectful view, the failure to exactly identify the dispute in the application under section 34 ought not to be regarded as fatal."
(Emphasis supplied)
23. Furthermore, in the case of Haji Soomar Haji Hajjan v. Muhammad Amin Muhammad Bashir Limited (1981 SCMR 129), the Hon'ble Supreme Court held as follows:- "....W e feel that whereever the parties to an Agreement expressly chose, through an arbitration clause, a forum other than a Court of law, for the settlement of their dispute, neither of them should normally be allowed to avoid that forum. The sole purpose of the Arbitration Act is to curtail litigation in Courts and to promote the settlement of the dispute amicably through persons in whom both the parties repose their trust. Therefore the course that the Courts should generally follow is to encourage the settlement of disputes by this method whereever the parties have themselves agreed to do so. That this was also the intention of the Legislature is evident from the manner in which Section 34 of the Arbitration Act is worded. To allow one side to evade and wriggle out from the agreement merely by making allegations of fraud, even though the same may not ultimately be proved or even pressed, would amount to giving a handle to that party to circumvent the arbitration clause.
24. Now, this Court proceeds to deal with second question regarding the validity of Award rendered by learned Arbitrator. It goes without saying that an appeal under Section 39 of the Act is a continuation of proceedings and the Court sitting in an appellate jurisdiction has all the powers which are vested in Court of first instance/civil court. It is well settled proposition of law that an Award could only be set aside if the Court is satisfied that there was a glaring factual or legal error, which floated on the surface of Award and/or the record. Furthermore, an Award could also be set aside provided the Court is satisfied that the Arbitrator/Umpire had mis-conducted himself in a manner provided in Sections 30 and 33 of the Act.
25. It is also settled that when any matter is referred to Arbitrator/Umpire, then he would become the sole and final Judge of questions both of law as well as facts. Furthermore, any party can file an application in terms Section 33 of the Act in order to challenge the existence or validity of an arbitration agreement or an Award, or to have the effect of either determined.
26. It also goes without saying that an Award shall not be set aside except on one or more grounds enunciated in Section 30 of the Act which reads thus:- "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 an award has been made after the issu e 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"
(Emphasis added)
27. In the case titled President of the Islamic Republic of Pakistan Vs. Syed Tasneem Hussain Naqvi and others (2004 SCMR 590), it was observed by the august Supreme Court that an Award could be challenged only on the grounds mentioned in Section 30 of the Act i.e. if the Arbitrator had misconducted himself in the proceedings and not on merit. Furthermore, it was held that a Court while hearing objections against award could not sit as a Court of appeal against award and interfere with the same on merits.28. In the case titled Pakistan Steel Mills Corporation, Karachi Vs. Messrs Mustafa Sons (Pvt.) Ltd. (PLD 2003 SC 301), the august Supreme Court while interpreting the term "misconduct" in the context of arbitration proceedings has held that the term "misconduct" is not akin to fraud, but it means neglect of duties and responsibilities of the Arbitrator.
29. Likewise, in the case titled Mian Brothers Vs. Lever Brothers of Pakistan Ltd. (PLD 2006 SC 169), it was observed that the Arbitrator acts in a quasi judicial manner and his decision is entitled to the utmost respect and weight, unless he misconduct is not only alleged, but also proved against him to the satisfaction of Court. Moreover, it was held that while examining the Award, the Court does not sit in appeal over the award and has to satisfy itself that the Award does not run counter to the settled principles of law and material available on record. An Award cannot be lawfully disturbed on the premise that a different view was possible, if the facts were appreciated from a different angle. In fact the Court cannot undertake the reappraisal of evidence recorded by the Arbitrator in order to discover any error or infirmity in the Award.
30. In the case of Allah Din & Company Vs. Trading Corporation of Pakistan (2006 SCMR 614), the august Supreme Court has observed that it is true that the trial Court does not sit in appeal upon the finding of Arbitrator but at the same time the Court is empowered to reverse the finding of the Arbitrator on any issue if it does not support from the evidence. While dealing with question of the Arbitrator's reasons of his findings, it was further held in the case of Allah Din & Company (supra) that the "very incorporation of section 26-A of the Arbitration Act requiring the arbitrator to furnish reasons for his finding was to enable the Court to examine the soundness of the reasons".
(Emphasis supplied)
31. In the case titled Premier Insurance Company and others Vs. Attock Textile Mills Ltd. (PLD 2006 Lahore 534), it was held as follows:- "The Court while considering the validity of the award should not sit as a Court of appeal, trying to fish or dig out the latent errors in the proceedings or the award, but should only confine itself to examining the award by ascertaining, if there is any error, factual or legal, which floats on the surface of the award or the record and if such an amiss is allowed to remain, grave injustice shall be done to the aggrieved party. The perversity about the reasoning, though is a ground for the interference in the award, but the Court should not infer the perversity because of the factual conclusion being wrong, rather it should be taken to be analogous and akin to "perverse verdict" which means that the factual conclusion drawn is against the law; obviously this shall include the decision of the arbitrator on the facts of the being based upon the misreading and the non- reading of the evidence/record. The award of an arbitrator, who is the Judge selected by the parties themselves, should not be lightly interfered with until and unless it is established that the error committed by him is so glaring that if it is overlooked, it shall lead to miscarriage of justice. But certainly the award cannot be intercepted on the ground that on the reading of the evidence, a conclusion other than arrived at by the arbitrator, is possible."
(Emphasis supplied)
32. There is nothing apparent on the surface of Award to indicate any misconduct on the part of learned Arbitrator. It is settled law that a while examining the validity of an Award, the Court does not sit as a Court of an appeal. Reappraisal of evidence recorded by Arbitrator is also prohibited. In order to interfere in an arbitration Award, there has to be an error on the face of Award and discoverable by reading same itself. In this regard, I am guided by the law laid down by this Court in the case titled National Highway Authority Vs. Messrs China Petroleum Engineering Corporation (PLD 2017 Islamabad 1), whereby this Court has held as follows:- "It is settled law that a court while examining the validity of an award does not sit as a court of appeal. It cannot undertake reappraisal of evidence. For a court to interfere in an arbitration award, there has to be an error on the face of it and discoverable by reading the award itself."
(Emphasis supplied)
33. In the case titled Capital Development Authority through Chairman Vs. Messrs Signage Security Systems (Pvt.) Ltd. through Accounts and Administrative Manager (2021 YLR 194), it was inter alia held by this Court as under:- "18. There is no cavil with the preposition that a Court while scrutinizing the award while hearing objections against the same does not sit as a Court of appeal. It is nonetheless obligatory upon the Court to examine the award in order to determine whether it suffers from any invalidity or inconsistency with the provisions of the contract."
(Emphasis added)
34. Similarly, in the case titled Pakistan Steel Mills Corporation Limited v. Progressive Engineers Alliance Limited (2009 CLC 100), the Hon'ble High Court of Sindh held inter alia held that when an Award comes before a Court for making the same as a Rule of Court, the Court has to follow the following guidelines:-
(i) In exercise of powers under section 15 of the Arbitration Act modify or correct an award if a part of the award is upon a matter not referred and can be separated or containing any obvious error, which can be amended without affecting such decision or contains a clerical mistake or an error arising from an accidental slip or omission.
(ii) Remit the award to Arbitrator or umpire for reconsideration upon such terms as it thinks fit.
(iii) In exercise of power under section 17 of Arbitration Act, Court to see that there was no cause to remit award or to set aside the award even if no application to set aside the award is filed or an application to set aside the award is refused, proceed to pronounce the judgment according to the award.
(iv) In exercise of power under section 26(A), for want of reasons for award insufficient, remit the award to the arbitration or umpire to give reasons in sufficient details within time fixed by the Court.
(v) After hearing objections filed under sections 30 and 33 of Arbitration Act, if any, set aside the award if Arbitrator or umpire has misconducted.
35. Since the appellant has not taken a stance in line with Section 17 of the Act seeking setting aside of impugned order and decree, whereby the Award was made a Rule of Court, therefore, the impugned order and decree is not open to an interference by this Court in terms of Section 17 ibid. For sake of reference, Section 17 of the Act is reproduced as under:- "17. Judgment in terms of award. Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award."
36. As has been discussed above that an appeal under Section 39 of the Act is a continuation of proceeding before the learned Civil Court and the Court sitting in appellate jurisdiction has ample power to pass an order which, the learned Civil Court ought to have passed. Furthermore, an appellate Court is vested with the same powers which are vested in the civil Court. Section 39(vi) of the Act makes an order refusing to set-aside an award appealable. Perusal of impugned order and decree shows that the learned trial Court has been mindful not to scrutinize the Award by applying the standard of an appeal.
37. The submission of the learned counsel for appellant that the Award rendered by learned Arbitrator is bereft of any reasons thus violative of Section 24-A of the General Clauses Act, 1897 as well as Section 26-A of the Act. Suffice it to say that the said submission of the appellant is totally misconceived inasmuch as the Award rendered by learned Arbitrator provided adequate reasons and there is no breach of either of the above quoted provisions of law and no error floating on the surface of Award could be discoverable by reading the Award itself.
38. As mentioned above, a Court hearing objections to Award cannot undertake the exercise of reappraisal of evidence recorded by Arbitrator so as to discover any error or infirmity in the Award.
It is mandatory that the error or infirmity rendering the Award invalidate must appear on the surface of such an Award and/or he record itself and ought to be found by reading the Award itself.
From bare reading of the Award, no error or infirmity could be found in order to render the same as invalid. It is also well settled that where the reasons recorded by Arbitrator are challenged on the ground of perversity, the same ought to be established in light of the material having been considered by Arbitrator in the Award. Furthermore, it is my view that an Award cannot be set- aside merely on the ground that the Arbitrator has not discussed the evidence produced by any of the parties. Since the award rendered by learned Arbitrator discusses each and every issue framed by the learned Arbitrator adequately, compliance with requirements of Section 26-A of the Act are seems to be made. There is nothing on record which would show that Award rendered by learned Arbitrator suffers from any error of law and thus, does not fulfill the requirements of Section 26-A of the Act. There is also nothing apparent on the surface of Award which would indicate any misconduct on part of learned Arbitrator. The learned civil Court has appreciated the record in its true perspective.
39. In sequel to what has been discussed above, I do not find any illegality in the impugned order and decree dated 14.03.2015 making the arbitration Award dated 15.10.2014 as a Rule of Court thereby passing a decree in terms thereof. The said order and decree dated 14.03.2015 being based on correct appreciation of the available record, does not call for any interference by this Court.
Consequently, the instant appeal being devoid of any merit, is hereby accordingly dismissed with no order as to the costs.