Malik Waqar Haider Awan, J. Through this Intra Court Appeal the appellant has assailed the judgment of the learned Single Judge in Chamber passed in Civil Original Suit (COS) No.58380 of 2021 whereby petition filed by the respondent-company was allowed vide judgment dated 03.01.2024 (heard on 07.12.2023) and the award dated 25.06.2021 rendered by an arbitrator nominated by Singapore International Arbitration Center was recognized and ordered to be enforced as a judgment of this Court in accordance with law.
2. Facts necessary for disposal of this appeal are that the respondent-company, which is based in Singapore and works in the business of trading and commodities, signed a sales contract with the appellant-company (also called the award debtor) on 23.08.2019. The contract was for the supply of a specific amount of hot rolled steel coils on the terms and conditions set-out therein. Later a dispute arose between the parties which is explained in detail in the judgment being challenged.
Due to this dispute, the respondent-company terminated the contract on 04.09.2019. They then used the arbitration option mentioned in the contract wherein it was provided that contract shall be governed by the laws of Singapore and in case of arising of any dispute between the parties the same would be settled through arbitration conducted by the Singapore International Arbitration Centre (the "SIAC"), following the SIAC Rules. Proceedings were started but both the parties could not reach to the consensus for the nomination of an arbitrator, so, SIAC appointed a sole arbitrator who gave the final decision/award on 25.06.2021.
3. Learned counsel for the appellant contends that learned Single Judge in Chamber has failed to consider the fact that the application for enforcement of the award was not maintainable and negated the fact that there was any arbitration contract between the parties. Adds that the alleged contract was signed by someone who was not vested with the authority from the appellant-company. He explains that according to Section 7 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 (the "Act, 2011") a foreign arbitration award can only be refused based on the reasons given in Article-V of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the "Arbitral Awards, 1958"). He believes that his case falls under the exceptions mentioned in the Article-V of the Arbitral Awards, 1958 which means the award should not be enforced. Submits that the award which has been sought to be enforced is hit by Clauses 1-A and 2-B of Article-V of Arbitral Awards, 1958, hence COS was not maintainable. Avers that contract had been signed by Sana Ullah Butt who was not duly authorized by articles of association of the appellant-company and no resolution of the board of director in this regard was ever passed. Lastly prays for acceptance of this appeal and for setting aside of impugned judgment.
4. Conversely, learned counsel for respondent-company contends that case of the appellant does not fall in the ambit of Article-V of the Arbitral Awards, 1958. Avers that neither learned Single Judge in Chamber nor this Appellate Forum can go into merits. Adds that without conceding even if mistake of law and fact occurred in award cannot be taken into consideration. Places reliance on judgment reported as "Reinhart India (Private) Limited through Special Attorney Vs. Bashir Cotton Mills Limited through Chief Executive Officer" (2023 CLD 1051) (Paragraphs No.22 to 24). He also refers to Section 6 of the Act, 2011 which clearly says that a foreign arbitral award must be enforced in the same way as a judgment or order of a Pakistani court and based on this, he stresses that the court which passed the impugned judgment was simply performing the role of an "executing court", meaning thereby that its duty was to implement the award, not to review it.
Reliance is placed on case law reported as "Orient Power Company (Private) Limited Vs. Sui Northern Gas Pipelines Limited through Managing Director, Lahore" (PLD 2019 Lahore 607).
Pleads that the defence of public policy against enforcement has a very narrow scope which is even not available to the case of the appellant-company. Places reliance on judgment reported as "POSCO International Corporation through Authorized Officer Vs. Rikans International through Managing Partner/Director and 4 others" (2023 CLD 189). Submits that learned Single Judge in Chamber rightly declined to adjudicate on competence of signatory of respondent-company to enter into a contract which is in accordance with doctrine of indoor management. Places reliance on judgment reported as "Dar Okaz Printing and Publishing Limited Liability Company Vs. Printing Corporation of Pakistan Private Limited" (PLD 2003 Supreme Court 808). He while further relying on judgments titled "Rahat and Company through Syed Naveed Hussain Shah Vs. Trading Corporation of Pakistan Statutory Corporation, Finance and Trade Centre through Secretary or Chief Executive Officer" (PLD 2020 Supreme Court 366) and "Shiv Ram Batta Vs. The Punjab Textile Mills, Limited and others" (PLD 1949 Lahore 143) submits that doctrine of indoor management is fully applicable when company engages with third party. He lastly prays for dismissal of this appeal.
5. Arguments heard. Record perused.
6. The appellant-company tried to prove that Sana Ullah Butt was not its authorized representative and that he had used the company's stamp without permission, however, to substantiate this plea the appellant-company never informed any legal forum that any action was taken against him for this act. This sole fact impliedly and conclusively proved that he was agent of appellant-company who acted upon company's behalf with its permission and consent. The address of the appellant- company and Sana Ullah Butt is also the same which further supports that he was acting on behalf of the appellant-company.
7. The appellant-company had replied to a legal notice but not opted to appear and join the arbitration proceedings which shows that the appellant-company intentionally avoided the proceedings of arbitration. Refusing to accept the arbitrator's authority and not taking part in the arbitration proceedings does not release the appellant from the duties and responsibilities under the sales contract.
8. Even if there were any mistakes or illegalities in the decision of arbitrator, these do not fall under Article-V of the Arbitral Awards, 1958. Under Section 7 of the Act, 2011, only the reasons listed in Article-V of the Arbitral Awards, 1958 can be used to refuse enforcement of a foreign award. Section 6 of the Act, 2011 also confirms that only those reasons mentioned in Section 7 of the Act, 2011, which is Article-V of the Arbitral Award, 1958, are valid grounds for refusal for recognition and enforcement of a foreign arbitral award. This shows that the law allows very limited scope for rejecting a foreign arbitration award. The intention of legislation is very much evident from the Act, 2011 whereby minimal interference by Pakistani Courts in International Commercial Arbitration is ensured.
9. The argument made by learned counsel for the appellant-company that the arbitrator while giving its award made legal or factual errors which is also erroneous, is not a valid reason under Article-V of the Arbitral Award, 1958, so this defense is not available to the appellant. Light can be taken from the dictum laid down in judgment reported as "Taisei Corporation and another Vs. A.M. Construction Company (Pvt.) Ltd. and another" (2024 SCMR 640). Relevant extract therefrom is as follows:- "41. These objectives sought to be achieved by the New York Convention underscore the "pro- enforcement bias" informing the Convention, guiding the Courts towards a "narrow reading" of the grounds of defence listed in the Convention, particularly, the public policy ground. The ground of defence that the arbitrator's decision is erroneous in law or fact is, therefore, not provided in the Convention; it cannot be read into in any ground of defence provided in the Convention, particularly, the public policy ground, by a "liberal reading" instead of a "narrow reading" thereof.
An expansive construction of the public policy ground "would vitiate the Convention's basic effort to remove preexisting obstacles to enforcement". The recognition and enforcement of a foreign arbitral award may be refused by the courts of Pakistan on the public policy ground only where it would violate the "most basic notions of morality and justice" prevailing in Pakistan. The public policy ground cannot be used to examine the merits of a foreign arbitral award or to create more grounds of defence that are not provided for in the Convention, such as misapplication of the law of Pakistan by the arbitrator in making the award or the arbitrator's decision being contrary to the law of Pakistan."
10. Recognition and enforcement of a foreign arbitral award can only be refused by a Pakistani Court if the award seriously violates the basic notions of morality and justice prevailing in Pakistan which is not the case of the appellant.
Since Pakistan is a signatory to the Arbitral Award, 1958 and the country has promulgated the Act, 2011 to implement it. Section 8 of the Act, 2011 provides that in the event of any inconsistency between this Act and the convention (Arbitral Awards, 1958), the convention shall prevail to the extent of the inconsistency.
11. Today, the world became a global village and it's not possible that any country can live in isolation. Every nation's interests are closely inter-knitted with each other.
The Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 which is in line with the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 to which Pakistan is signatory, definitely a right step towards a bright future and will certainly build trust with foreign companies, encourages them to invest in the country and improves Pakistan's image and respect in the comity of nations.
12. Learned counsel for the appellant-company failed to point out any jurisdictional error in the judgment of the learned Single Judge in Chamber or in the award in the light of the Act, 2011 and Arbitral Awards, 1958. The judgments referred by the learned counsel for the respondent-company are apt and applicable to the facts and circumstances of the case.
13. For the foregoing reasons, no ground is made out for interference in the judgment impugned herein. Therefore, this Intra Court Appeal being without substance is dismissed.