' Award dated 10th August, 1984 made and signed by Mr. S.A. Kirmani as the Chairman, Arbitration Court and one Mr. Rehman in an arbitrator has been filed in the Court for being made rule of the Court.
2. Names and description of parties to the Award read as follows:-- "Alhaj Ali Hussain, Managing Director, Messrs Saz and Films, Karachi----Claimant/Applicant. versus Messrs Eastern Film Studio Ltd., through Mr. Hussain Haroon--Opponent/Defendant"
' And by the operative part reproduced below the arbitrators in favour of the above-named claimant/applicant and against the opponent/ defendant, made the award as follows:-- "In view of the above facts and circumstances, it is hereby ordered and awarded that the defendants are liable to pay to the claimant/plaintiff as follows:--
(1) Rs,20,000 as mentioned in para. (d) of the letter/part of the agreement.
(2) Rs,85,000 as mentioned in para (d) of the letter/part of the agreement.
(3) Rs,5,00,000 being loss and damage of the above-mentioned three films of the claimant/plaintiff.
(4) Rs,1,000 per day as penalty and Rs,500 per day as demurrage, for only three years, totalling Rs,16,20,000, prior to the filing of the claim of claimant/plaintiff till 30-6-1983, as per clause (f) of the letter/agreement for violation of the terms and conditions and for doing wrongful acts as detailed above. Rest of the claim in this behalf w.e.f, July, 1970 is dismissed as being time-barred.
(5) The defendants are also ordered not to forcibly enter the office premises of the plaintiff and/or remove his films goods therefrom and disturb possession of entry of plaintiff into office No, 43, Eastern Film Studio, in any manner.
' This claim, as details above is being awarded in favour of the claimant/plaintiff and against the defendant because the defendants have failed to, in spite of receipt of notice, contest these proceedings and/or rebut the claim of the claimant/plaintiff, as put forth in this case.
Consequently, the statement of the side of the claimant/plaintiff having gone unchallenged and unrebutted and also the relevant documents having been produced and proved in this case, there is no reason to disbelieve the version of the claimant/plaintiff's side as against the defendant and hence the Award."
3. After the filing of the award in the Court notices were issued to the parties. The defendants have made appearance and filed objections to the award being made rule of the Court inter alia on the following grounds:--
(i) That to the alleged agreement, dated 23rd May, 1969 the parties were Messrs Eastern Films Studio Ltd. And Messrs Saz Film Ltd. Whereas the award had been made in favour of one "Alhaj Ali Hussain", Managing Director, "Messrs Saz Films", Karachi who has been described as the plaintiff/claimant. It is contended that the award in favour of one Alhaj Ali Hussain, who is not a party to the arbitration agreement, is void.
(ii) That according to the case of the plaintiff arbitration agreement, dated 23rd May, 1969 was modified by agreement, dated 26th May, 1969 whereby it was provided that "in case of any dispute, the matters will be decided by arbitration shall be binding on both the parties". This agreement according to the defendants is a forged and fabricated document and any reference or award based upon it, is void.
(iii) That under the aforementioned arbitration clause (m) which has been mentioned in the award as part of the agreement, dated 23rd May, 1969, it is provided that: ' Qamar Muhammad Khan, Advocate Muhammad Mubeen and Sarwat Hussain, Advocate, either from them shall be at the post of Chairman of the Court."
' The objection raised on behalf of the defendants is that the appointment of Mr. S.A. Kirmani as the Chairman of the Arbitration Court by the plaintiff/claimant, not being one of the persons named in the agreement, rendered the constitution of the "Arbitration Court" illegal.
(iv) That no notice was served upon the defendants by Messrs Saz Film Limited calling upon them to appoint an arbitrator within the meaning of clause (m) of the agreement, dated 23rd May, 1969.
4. On the objections raised as above, I heard the learned Advocates for the parties at length. I would first deal with the objection taken on behalf of the defendants that the appointment of Mr. S.A. Kirmani as the Chairman of the Arbitration Court, rendered the constitution of the said Arbitration Court illegal. In support of the argument reference was made to the arbitration clause
(m) from the document Annexure "D" to the award, which provided:- ' Clause (m).-- "That in case of any dispute, the matters will be decided by Arbitration one from each side and one appointed by Mr. S.A. Hussain and this 3rd man will be the Chairman of the Court and all summons, notices, orders will be passed by this Chairman and will release award and will sign the order, and if any party fails to appoint his one representative, then in such case the 3rd representative will be supposed from both the sides, and decision will be made on majority basis.
These three members will have full right to appoint Sole Arbitrator with the consent of the 3 parties.Qamar Muhammad Khan, Advocate, Muhammad Mobin and Sarwat Hussain Advocate either from them shall be at the post of Chairman of the Court. Both the parties read this agreement and this will be considered as part of the agreement."
(The underline has been made by me).
' Reference was also made here to the alleged agreement, dated 26th May, 1969 wherein after reciting:- "Letter No, EFS/3/69, dated 23-5-1969 addressed to Mr. Said A. Haroon, Managing Director, Eastern Films Studios Ltd., shall be binding on both the parties in respect of the Resolution mentioned therein, and the said letter shall be considered as part of this Agreement,"
' It was provided, vide clause (7) as follows:- ' on case of any dispute, the matter will be decided by Arbitration which shall be binding on both the parties. In witness whereof both the parties have set and subscribed their respective hands at Karachi, on the day and year first mentioned hereinabove."
5. Mr. Muneer Malik, the learned counsel for the defendant contended that this alleged agreement, dated 26th May, 1969 is a forged and fabricated document but this disputed question need not be determined here as I find that the matter can be disposed of on other issues raised on behalf of the defendants.
' The learned counsel for the defendant Mr. Muneer Malik, without conceding to the legality of the agreement, dated 26th May, 1969 submitted that even under clause (m) which is the alleged arbitration clause the Chairman of the arbitration Court could have been appointed only from amongst those persons who are named therein namely (1) Mr. Muhammad Qamar Khan, Advocate, (2) Mr. Muhammad Mubeen Advocate, or (3) Mr. Sarwat Hussain, Advocate the arbitration clause providing that:-- ' either from them shall be at the post of Chairman of the arbitration Court."
' It is not disputed by the learned counsel for the plaintiff that this part of the agreement as to the appointment of Chairman of the arbitration Court from amongst the three named gentlemen was never amended by the parties.
' In view of the above-stated facts, a reading of the arbitration clause and the admission of the learned counsel of the plaintiff that the same was not modified, it becomes evident by the appointment of Mr. S.A. Kirmani as the Chairman of the arbitration Court, his taking part in the arbitration proceedings and making the award rendered the constitution of the arbitration tribunal illegal with result that not only the arbitration proceedings but the award made also has to be declared void.
' The view taken as above by me finds support from the judgment of the Honourable Supreme Court of Pakistan given in the case Messrs Oil and Gas Development Corporation v. Messrs Karachi Builder 1978 SCM R 278. The facts of the said case briefly stated were that according to the terms of the arbitration clause disputes between the parties arising out of the contract between them were to be referred to the arbitration of the Chief Engineer of the Oil and Gas Development Corporation (hereinafter referred to as the Corporation). Though the standard agreement form of the Corporation provided for arbitration of Chief Engineer of petitioner-Corporation but by special condition entered in 'tender form' the term Chief Engineer was to be read as "Production Manager".
Differences having arisen between the parties and there being difference between them as to the person who could be appointed as an arbitrator, application was made to the High Court under section 8 of the Arbitration Act, 1940 for the appointment of an arbitrator for settling the disputes.
The learned High Court came to the conclusion that the Production Manager, was the person to arbitrate according to the terms of the contract and not the Chief Engineer, and accordingly directed that the Production Manager of the Corporation, should proceed with the arbitration.
Thereafter the Deputy Chief Engineer who was also working as Production Manager started the arbitration proceedings, but the contractor refused to participate and informed the arbitrator that since he was not the Production Manager he could not, therefore, arbitrate. The arbitrator served a few more notices on the contractor and then proceed ex parte against him, and gave his award according to which he held the contractor entitled to Rs,41,192 from the Corporation. The award was filed in the Court to which both the parties raised objections. The contractor had objected on the ground that the award had been given by the Deputy Chief Engineer and since he could not arbitrate as the arbitration had to be done by the Production Manager, the award was invalid.
Upholding the objection thus raised it was held by the learned Single Judge of the High Court that the intention of the parties was to appoint the Production Manager as arbitrator and not any other officer performing the function of the Production Manager in addition to his duties. It was accordingly held that the Deputy Chief Engineer performing the functions of Production Manager in addition to his duties, was not competent to arbitrate. An inter-Court appeal was preferred which the learned Division Bench dismissed and the findings of the learned Single Judge were upheld.
The Corporation thereafter filed petition seeking leave to appeal before the Honourable Supreme Court but the same was also dismissed with the following observations:-- "The High Court was perfectly justified in holding that the arbitration had to be done by the Production Manager of the Corporation and not any other officer performing the said duties in addition to his own."
(The underlined is made by me).
In the light of the above authoritative judgment of the Honorable Supreme Court of Pakistan I have no hesitation in holding that the arbitration tribunal of which Mr. S.A. Kirmani was appointed as the Chairman, was an illegally constituted arbitration tribunal. He though being not competent to arbitrate in the disputes, his participation in the arbitration proceedings and making the award, rendered the same invalid and void.
' The award, therefore, cannot be made rule of the Court for the above-discussed reasons.
6. There is yet another fatal objection to the award being made rule of the Court. It would be observed from the names of the parties to the award and its operative part reproduced above, that the award was made in favour of the plaintiff/claimant 'Alhaj Ali Hussain' but this gentleman was not a party to the arbitration agreement either under the document, dated 23rd May, 1969 wherein the two parties are Eastern Films Studio Limited and Messrs.' Saz Film Limited or in the other agreement dated 26th May, 1969 wherein the parties have been described as Eastern Film Studio Limited as the party of the first part, and Messrs Saz Film Limited as the party of the second part.
'Alhaj All Hussain' is thus neither a party in the agreement of 23rd May, 1969 nor under the agreement, dated 26th May, 1969. The arbitration tribunal, therefore, had no jurisdiction to arbitrate upon disputes between Eastern Films Studio Ltd., and Alhaj Ali Hussain, the latter being not a party to the arbitration agreement. The award made in favour of the plaintiff/ claimant Alhaj Ali Hussain is thus void. The description of the plaintiff/ claimant as the Managing Director Messrs Saz Film is immaterial for the purposes of the decision reached as above, as in law Messrs Saz Film Ltd., is a different legal entity, reference if needed be made to the cases reported as (i) Rai Bahadur Mohan Sing Oberoi v. Rai Bahadur Joha Mal Kuthalia PLD 1961 SC 6, (ii) Ikram Bus Service and others v.
Board of Revenue, West Pakistan PLD 1963 SC 564 and (iii) Messrs Franksons & Co. v. Mian Muhammad Hussain 1983 CLC 1042.
7. The upshot of the above discussion is that the award being illegal and void, the same cannot be made rule of the Court. Accordingly the suit is dismissed with cost.