1. ' This is an application under section 8(2) of the Arbitration Act 1940. It has been filed in the following circumstances:-- ' The plaintiff was engaged by the defendant to provide consultancy services under the agreement which included an arbitration clause which reads as follows:- "That in the event of a dispute between the Cantonment Board and Consultant, the matter shall be referred for arbitration to the President, Clifton Cantonment whose decision in the disputed matter shall be final and binding upon both the parties of this contract."
2. ' As the dispute arose between the parties the plaintiff filed an application under section 20 of the Arbitration Act for filing the agreement in Court and refer the dispute between the parties to the sole arbitrator under the agreement. On 4-11-1987 the application was granted and the dispute was referred to the President Clifton Cantonment Board in terms of Arbitration Act. As the Arbitrator did not enter upon reference the plaintiff addressed a letter dated 9-12-1987 inviting his attention to the order of the Court and requested him to fix a date for entering upon the reference in terms of the appointment order. It also requested for fixing a date for commencement of arbitration proceedings. As no reply was received the plaintiffs Advocate issued a reminder on 2nd January, 1988. On 3-1-1988 the Cantonment Executive Officer, Clifton Cantonment addressed a letter to the plaintiff's Advocate asking him to appear before the President Clifton Cantonment Board in his office on 17-1-1988 in connection with the arbitration proceedings. Another letter dated 23-1-1988 was issued by the same Officer intimating that the sole Arbitrator has fixed the date of hearing on 6-2-1988. On that date the plaintiff filed statement of claim. On 7-1-1988 the Cantonment Executive Officer addressed a letter to the plaintiff that on 6-2-1989 when the date of hearing was fixed neither the plaintiff nor its Advocate appeared till 11.00 a.m. And it was asked to submit the claim and documents by 13-2-1986 and the next date was fixed on 20-2-1988. This letter was replied by the advocate for the plaintiff in which he objected to the issuance of letters and directions by the Cantonment Executive Officer, and stated that the conditions in Karachi were abnormal on 6-2- 1988 but Mr. Kazmi was able to reach office at about 11.15 a.m. And the claim was filed on 6-2-1988.
3. Thereafter, it seems that no date of hearing was fixed by the arbitrator and the plaintiffs Advocate addressed a letter dated 9-4-1988 that after 20th February no date has been fixed and the matter should be proceeded without delay. As no reply seems to have been received another letter dated 23-4-1988 was addressed requesting to proceed with the arbitration. It was, however, further stated that if the plaintiff do not hear from the arbitrator in that regard within seven days it will be assumed that he was not ready to proceed with the above matter and necessary proceedings shall be instituted to protect the interest of the plaintiff. The plaintiff's Advocate addressed a letter to the Executive Officer, Clifton Cantonment Board on 21-5-1988 asking him to agree in the appointment of sole arbitrator from among the persons names of which were proposed in the letter as the sole Arbitrator appointed by the Court on 4-11-1987 had neglected or refused to act as sole arbitrator. The defendant was called upon to concur on the appointment of any one of the proposed names who were retired Judges of the High Court. Immediately on receipt of this letter the Cantonment Executive Officer addressed a letter to the plaintiffs Advocate to appear before the Arbitrator on 29-5-1988. The Advocate for the plaintiff by letter dated 28-5-1988 refused to acknowledge this letter as it was written by the defendant's Officer and not by the sole Arbitrator.
4. The sole Arbitrator then addressed a letter on 1-6-1988 intimating the plaintiff that it did not appear on 29-5-1988 and the defendant had filed its reply copy of which was endorsed and the matter was fixed on 5-6-1988 for arguments. The plaintiff's Advocate replied to the sole Arbitrator that the time for giving the award has expired on 16-5-1988 and in spite of several requests made by the plaintiff no proceedings had taken place and requested him to refrain from proceeding with the matter. He also stated that he has been instructed to move an application in the High Court for proper relief. The sole Arbitrator, however, made an award on 5-6-1988 without serving notice under section 14 of the Arbitration Act. The plaintiff filed application under section 8 of the Arbitration Act on 11-6-1988 and the sole Arbitrator filed the award in Court on 16-6-1988 which was registered as Suit No,557/88. It may be pointed out that the plaintiff filed objections to the award' and by judgment dated 31-8-1989 the award has been set aside. It was observed as follows:-- "I would refrain from superseding the Sole Arbitrator and appointing a substitute, which question shall engage the attention of this Court in manner and form indicated above. The factors which have weighed in the setting aside of the Award may, also come up for consideration, if need be, in relation to such application."
5. ' In this backgrounds the learned counsel for the plaintiff has contended that any other independent and impartial person may be appointed as the Sole Arbitrator.
6. ' Mr.Shakeel Lari the learned counsel for the defendant has contended that after the award was made by the sole Arbitrator, he has become functus officio. In this regard the learned counsel has referred to Juggilal Kamalapat and another v. I. General Fibre Dealers Ltd. AIR 1962 SC 1123, where it was held that: "We have already said that generally speaking, the arbitrator becomes functus officio after he has given the award; but that does not in our opinion mean that in no circumstances can there be further arbitration proceedings where an award is set aside or that the same arbitrator can never have anything to do with the award with respect to the same dispute. Section 13(d), for example, gives power to the arbitrator to correct in an award any clerical mistake or error arising from any accidental slip or omission. Further section 16 gives power to the Court to remit the award to the arbitrator for reconsideration. Therefore, when it is said that the arbitrator is generally functus officio after he has made the award, it only means that he cannot change that award in any matter of substance himself. But that does not take away the Court's power to remit the award for reconsideration under section 16 or to refuse to supersede the reference even though the award is set aside leaving it to the parties to take such further action under the arbitration agreement for further arbitration if it is possible so to do under the terms of a particular arbitration agreement."
7. After the award has been made the arbitrator becomes functus officio, and cannot act as such except as provided under section 13(d) or if the award is remitted by Court to him under section 16.
8. So long reference is not superseded he can be reappointed as arbitrator provided the terms of agreement permit it. It is within the discretion of the Court to supersede the reference or not when the Award is set aside. When reference is superseded the arbitration proceeding ceases to have effect but where reference is not superseded the arbitration agreement exists provided contrary intention is not spelt out from it. The Court has ample power to appoint him as arbitrator or remove him and appoint another arbitrator in his place. While setting aside the award Court has not superseded the reference and there is nothing in the arbitration agreement to indicate that the dispute cannot be referred to arbitration again. Therefore, the arbitration agreement is in force and the dispute between the parties can be referred to arbitration.
9. ' Mr.Shakil Lari has contended that as the agreement provides a named arbitrator, the Court cannot substitute another arbitrator. He has referred to M/s. Hafiz Abdul Aziz v. Ali Mohammad Abdullah & Co. PLD 1966 Kar. 197 in which it was observed that under section 8(1) (b) the Court can appoint an arbitrator or umpire when an arbitrator appointed by the parties "neglects or refuses to act or is incapable of acting-or dies". It was further observed that this power and power under section 20(4) "does not empower the Court to substitute the original agreement of the parties by an entirely new agreement of its choice." To the same effect is the observation in Inter Trade Ltd., Karachi v. T.C.P. PLD 1976 Kar.
496. Reference was also made to Chief Engineer Buildings and Roads Jaipur and another v.
10. Harbans Singh AIR 1955 Rajashthan 30 where it was held that 'the fact therefore that the arbitrator is mentioned by office also points to an intention not to replace him by some other arbitrator". The sum and substance of the aforestated authorities is that where in an arbitration agreement the arbitrator is mentioned by name or by office then the Court will not substitute a new arbitrator in place of the agreed arbitrator. The Court will normally not substitute arbitrator for the agreed arbitrator but such provisions in the Arbitration Act do not curtail the power of the Court to remove the arbitrator and appoint a fresh arbitrator. The Arbitration Act provides for such a situation I and if the requirements of section 11 are satisfied the Court can remove such arbitrator and appoint an arbitrator of its choice. The above authorities are relevant where cases under section 8 or 20(4) of Arbitration Act and not section IC 11 are under consideration.
11. ' Mr.Khawaja Balal the learned counsel for the plaintiff has referred to State of Orissa v. Modern Construction Co. AIR 1972 Orissa 219 and Murerial Lal v. Gopal Chand AIR 1973 Delhi 251 where it was observed that besides removal of arbitrator there may be cases in which it may be necessary to remove the arbitrator under the inherent powers to uphold justice and fair play. Mr. Khawaja has contended that application under section 8 may be treated as application under section 11 of the Arbitration Act.
12. ' A perusal of the application under section 8 will show that it substantially means removal of arbitrator appointed by the Court and appointment of another arbitrator. It is possible to treat an application under section 8 to be an application under section 11 provided the facts and circumstances justify it. If a party has made out a case for removal of the arbitrator as provided by section 11 then even if the application has been filed under section 8 it may be treated as an application under section 11. Such technicalities should not obstruct the course of justice. In this particular case the facts as narrated above will show that the sole arbitrator has neglected to proceed with the case. He did not conduct in a proper and legal manner and proceeded in post haste merely to frustrate the plaintiff's action for his removal and appointment of any other arbitrator. In spite of protest the sole arbitrator made the award after the date of expiry without any notice to the parties. In fact he did not call the parties to lead any evidence which was necessary in the facts and circumstances of the case, and straightaway made the award on the basis of the claim and counter-claim and documents filed by the parties. This procedure was completely unwarranted and showed lack of respect for the provisions of law and principles governing the arbitration proceedings.
13. ' Now the question arises whether the matter may be referred to the same sole arbitrator or to any other arbitrator. The parties have no doubt agreed to a named arbitrator by the office, but it was subject to the legislative provisions which empower the Court to remove the named arbitrator. This implies that the Court will enforce the agreement so long the named arbitrator is not disqualified to act as arbitrator or is not hit by the provisions of law which empower the Court to remove him. In this regard reference can be made to Bristol Corporation v. Aird (Jhon & Co.) 1913 A.C. 214 where considering the question whether in the face of an arbitration clause the action/suit filed a party should be stayed it was observed at page 257: "It must be remembered that these arbitration clauses must be taken to have been inserted with due regard to the existing law of the land, and the law of the land, applicable to them is, as I have said, that it does not prevent the parties coming to the Court, but only gives to the Court the power to refuse its assistance in proper cases. Therefore, to say that when we refuse to stay action we are not carrying out the bargain between the parties does not fairly describe the position, we are carrying out the bargain between the parties because that bargain to substitute for the Courts of the land a domestic tribunal was a bargain into which was written, by reason of the existing legislation the condition that it should only be enforced if the Court thought it a proper case for its being so enforced."
14. ' This principle can be applied in cases where question arises whether a named arbitrator be allowed to proceed with the arbitration or not. Therefore, if any person has been named as an arbitrator but is disqualified to act as arbitrator or has misconduct in earlier proceeding which is not of formal or technical in nature then in spite of the agreement to refer the matter to such a named arbitrator the Court can come to the rescue of the aggrieved party by appointing impartial arbitrator in his place. Section 11 provides that on an application made by any party to reference the Court can remove an arbitrator or umpire who fails to make the award or has misconduct himself. The learned Single Judge while considering the award had taken note of the misconduct on the part of the Arbitrator. The misconduct is not formal or technical in nature. The conduct of the arbitrator has been such that the applicant cannot except justice from him. Both the learned counsel have stated that the same person is still the President of the defendant. Perhaps if some other persons would have been the President of the defendant the question of appointing any other person as arbitrator would not have arisen. But the same arbitrator against whom misconduct has been established it would not be proper to appoint him as sole arbitrator again.
15. He has already prejudged the issues and during the proceeding misconduct leaving no room for the plaintiff to expect justice from him. Therefore, in these circumstances supersede the arbitrator and appoint Mr. Justice (Rtd.) Agha Ali Haider as the Sole Arbitrator in the matter. The office should send notice to the arbitrator on Court motion. The award should be made within four months from the date the learned Sole Arbitrator enters upon the reference. Tentatively the parties shall pay Rs,25,000 to the learned Sole Arbitrator in equal proportion.