1. This application under section 8(2) of Arbitration Act is filed by the applicant M/s. Interhom (Pvt.)
2. Limited Company, to whom a contract was awarded by the respondent vide letter of award dated 8-2-1977. As per clause 12.1 of the letter of award disputes between the parties were required to be settled in the following manner: "12. Settlement of Disputes 12.1. The existing wording of clauses 65 and 66 of the Condition of Contract shall be treated as amended so as to read as under:-- Clause 65. If a dispute or difference of any kind whatsoever shall arise between the parties hereto in connection with or arising out of the contract or the carrying out of the work, whether during its execution or after its completion, it shall in the first place be referred to the Corporation, and the Corporation shall, after giving the Contractor due opportunity to present and argue his case, communicate its final decision to the Contractor in writing within a maximum period of two months from the date the dispute or difference is referred to the Corporation.
3. Clause 66. If the Corporation fails to communicate its decision within the said period or the Contractor be dissatisfied with any such decision, then the Contractor may within thirty days after receiving notice of Corporation's decision require that the matter or matters in dispute be referred to a sole arbitrator to be appointed by mutual agreement of the parties hereto and the award of such sole arbitrator when made shall be final and binding on both the parties. In the event that no mutual agreement is - reached between the parties' as to the appointment of the sole arbitrator within thirty days of such requirement the matters in dispute shall be settled in accordance with and subject to the provisions of the Arbitration Act, 1940 or any statutory modification or re- enactment or any amendments thereof and the rules made therein. The venue of arbitration shall be in Karachi. The parties hereto shall equally bear their own and other expenses in respect of arbitration."
4. As per averments made in the application, the applicant executed the work of the project, but several disputes arose between the parties. The parties ultimately agreed to appoint Mr. H.N. Akhtar the then Chairman of respondent Corporation as Sole Arbitrator. The said Mr. H.N. Akhtar was, however, transferred in July, 1987 with the result that he was unable to act as agreed Sole Arbitrator. The applicant thereafter approached the concerned officials of the respondent for amicable settlement of the dispute, but with no result. However, by its notice dated 1-1-1989 the applicant called upon the respondent to fill in the vacancy created by transfer of Mr. H.N. Akhtar and suggested that the matter may be referred to the arbitration of a retired Judge of Supreme Court of Pakistan. The respondent Corporation upon the receipt of the letters suggested the name of its present Chairman to act as Sole Arbitrator, but the applicant while expressing fun confidence in the ability of present Chairman of respondent, expressed its inability to 'accept his appointment as Sole Arbitrator. In short, after exchange of a number of letters no concensus was reached between the parties as to the appointment of Sole Arbitrator. This application is opposed by respondent on two grounds: Firstly, there was no arbitration under the said clause 12.1 of the letter of award dated 8-2-1977 which envisages reference to a referee rather than to an arbitrator.
5. Secondly, the claim of the applicant is manifestly time-barred as the respondent had rejected all the claims made by the applicant against the respondent vide Annexures "D" dated 10-10-1984 to its counter-affidavit. It was, however, as late as 17-5-1986 that the applicant lodged their claim with Mr. H.N. Akhtar the then Chairman of the respondent. In support of his contention, learned counsel for the respondent placed reliance on AIR 1954 Cal. 606, in which there was an agreement that a Major-General named therein shall act as an arbitrator who, however, ceased to hold that office and, therefore, it was held that if the said Major-General is not succeeded by another Major- General there would be a vacancy in the office and the Court in the circumstances of the case was empowered to appoint some other person as an Arbitrator. In another case reported in AIR 1950 East Punjab 40, the licensee was granted exclusive right to sell newspapers, books etc. On station premises and in case the licensee was unable to conduct business the contract was liable to be terminated, in which case the General Manager Railways was to be the Sole Judge. It was held that the interpretation of the Sole Judge in the context would not include an arbitrator.
6. The present case is clearly distinguishable as no one was named as arbitrator by virtue of holding an office and the dispute was to be referred to a mutually appointed arbitrator. Again the language of the said clause 12.1 is so dear as to arbitration, to rule out any interpretation to refer the dispute to a referee, as contended by the respondent's counsel.
7. Mr. Bilal KhawaJa, learned counsel for the applicant, made reference to the case of Wapda v.
8. Khanzada Muhammad Abdul Haque & Co. PLD 1990 SC 359, in which it was held that where the appellant had agreed to extension of time for giving the award and continued to appear . Before the arbitration without any objection and participated in the proceedings till last and took chance for a favourable award, they waived their right to object to the award. This case is also not relevant here as after the appointment of a sole arbitrator by the parties no proceedings whatsoever had taken place before the arbitrator.
9. The case of the respondent is that all the claims made by applicant were finally rejected by it vide Annexure 'D' dated 10-10-1984 to its counter---affidavit. That being so, the applicant within thirty days referred the dispute to the arbitration of Mr. H. N. Akhtar in terms of the said clause 12.1. It may however be observed here that the parties cannot curtail period of limitation even by consent.
10. From the perusal of the arbitration clause as well as from the correspondence on record it is clear that the parties were required to appoint mutually a sole arbitrator. After the appointment of Mr. H.N. Akhtar as Sole Arbitrator, the arbitration proceedings could not procred as he was transferred.
11. Since after the vacancy, the parties could not concur in the appointment of a Sole Arbitrator in place of the former Arbitrator appointed by them, the Court is empowered under section 8(2) to appoint an arbitrator. I accordingly appoint Mr. Fakhruddin G. Ebrahim, Advocate as Sole Arbitrator in the matter.
12. AA./1-181/K