' These objections have been filed to the. Award given by the sole Arbitrator dated 10-9-1987.
2. The facts of the case are that the plaintiffs, who are building contractors, had been awarded the work of the construction of 'International Pavilion at Pakistan International Trade Fair 1984' by the defendant. The BOQ for civil work enumerated various items of work. However, in relation to seven items, the plaintiffs were required to give their unit rates as these items of work were not quantified, while in relation to all other items, the quantities were given and so also the unit rates. The plaintiffs were given work of the total value of Rs,27,37,000 inclusive of civil work, plumbing works and electrical works, according to a Letter of Intent dated 26-4-1984. It is pertinent to point out that the said seven items of work were excluded when the work was awarded to the plaintiffs. However, admittedly the work of these seven items was carried out by the plaintiffs and the dispute between the parties was confined only to the unit rates for the said items.
3. The Plaintiffs' case is that they had quoted the rates in respect of these seven items and the same had been accepted by the defendant and consequently the work was carried out on the said items under instructions from the defendant and therefore, theplaintiffs were entitled to be paid for the said items on the basis of the unit rates quoted by them. Whereas the defendant's case was that the work on the said seven items could not be carried out without the consent and approval of the defendant as to the unit rates to be charged by the. Plaintiffs. Consequently, according to the defendant, the plaintiffs were entitled to receive only minimum rate for each of the said items.
4. By consent of the learned counsel respectively appearing for the parties, the following consent issues were framed by the learned Arbitrator:- "(.1) Whether for the above seven items, the plaintiff is entitled, to the rates quoted in the BOO or whether these quoted rates were subject to further negotiation between the parties?
(2) Whether the plaintiff had not complied with the obligations under clause 66 of the General Conditions of the Contract to refer the dispute to the Employer?
(3) Whether the claimant is entitled to interest on the with-held amount?
(4) What should be the Award?
5. The learned Arbitrator found that although the plaintiffs had been awarded work at the price quoted by them in their tender, namely, Rs,27,37,000 which represented all the items of work included in the BOQ, however, the same did not include the aforesaid seven items for which the plaintiffs were required to quote rates only. The plaintiffs, while accepting the Letter of Intent dated 26-4-1984, made it clear vide their letter dated 28th April, 1984 that the acceptance was "subject to our mutual understanding that all the rates of items quoted by us in BOO shall be binding on the parties, i,e., ourselves and the owners". Thus, according to the learned Arbitrator, the plaintiffs had reiterated that the parties would be bound by the BOO rates, including the rates given in the BOO for the aforesaid disputed items. Admittedly ,this letter was received by the defendant and its contents at no time were questioned by the defendant, at least not in' writing.
6. Thereafter the plaintiffs submitted their five Running Bills from time to time. The cost of the total civil work claimed by the plaintiffs which was Rs, 34, 87,495.60 was sanctioned for Rs, 34,38,096.90, the sanctioned total being arrived at by acceptance of the plaintiff's quoted unit rates of the seven disputed items in the BOQ. The Arbitrator consequently held that the plaintiffs were entitled to the work done on the disputed seven items at the unit rates quoted by them in the BOO for the following reasons:--
(i) That the plaintiffs were required to quote unit rates of all the items of work in the BOO including the said seven items, which were not quantified.
(ii) That the plaintiffs did quote in the BOO the unit rate price of the said seven disputed items.
(iii) That the plaintiffs made known to the defendant by their letter dated 28th April, 1984 that their acceptance of the letter of intent which was limited to quantified items of BOQ only, was subject to mutual understanding between the parties that all the rates of items quoted in the BOO shall be binding on both the parties and the contents of this letter were not disputed by the defendant at any time.
(iv) The defendant did order the plaintiffs to carry out the work on the said seven items.
(v) If the defendant desired that the unit rates for these items given in the BOQ were not acceptable to the defendant, they should have so informed the plaintiff before ordering this work.
(vi) Condition 10(4) of the Instructions to the Tenderers laid great stress on unit rates given in BOQ which were to be taken as correct. It was, therefore, all the more necessary for the defendant to have these rates altered or suitably amended if these were not acceptable to them before ordering the work on the said items.
(vii) That all the Running Bills and so also the Final Bill were admittedly scrutinised both as to the quantity as well as the rates, by the defendant's Architect's representative at site and the site engineer of the defendant and these bills more importantly the Final Bill, were passed for payment with rates as given in BOQ for the said seven items. Viii) Under clause 56(1) of the General Conditions of Contract, the Architect's representative was required to ascertain and determine by actual measurement the value of the work done in accordance with the contract.
(ix) The comparative statement prepared by D.W.2, Mr.Bhatti, is irrelevant. Even otherwise it cannot be relied upon as it additionally shows lack of bona fides. No evidence was led on behalf of the defendant except for the comparative statement which, as aforesaid, is of no value, that the unit rates quoted in BOO of the rate required items were unreasonably high as to make it unconscionable or that the overall contract rate was high.
(x) The legal notice dated 15-10-1984 was not replied to.
(xi) lastly the defendant in the written statement took the fantastic plea that the employer was not the defendant but the Chairman of the Fair Committee and went on to suggest to P.W.1 in the cross-examination that inflated bills were made out so that they may be paid unnoticed to cover conspiracy/understanding with the said Chairman. There is nothing on record to show that any action was taken by defendant against the said Chairman who had allegedly caused great loss to the defendant.
7. The Arbitrator also held that the plaintiffs were entitled to claim interest from the defendant at the prevailing bank rate for the amount, the payment of which had been wrongfully withheld by the defendant. Such amount, according to the learned Arbitrator, being Rs, 14,38,075.38, interest at 6% per annum was allowed from 15th October, 1984. However, the claim of the Plaintiffs for interest amounting to Rs, 15,661.89 on account of 39 days' delay in the first part-payment of the 4th Running Bill was disallowed by the learned Arbitrator for the reason that the contract did not provide for payment of interest on delayed payments. The learned Arbitrator also awarded a sum of Rs,2,50,579.06, being interest calculated @ 6% per annum from 15-10-1984 upto the date of the Award. Further, a sum of Rs,60,000 was also awarded to the plaintiffs as costs of the arbitration proceedings.
8. I have heard Mr. B.M. Bangesh, learned counsel for the defendant in support of the objections filed by him and Mr. S.E. Hussaini, learned counsel for the plaintiffs.
9. The first contention of Mr. B.M. Bangesh is that the Award has travelled beyond the reference made by this Court vide its order dated 17-12-1985. According to the learned counsel, the claim of the plaintiffs in Suit No,160/1985, wherein the said order was passed, was based on the contract contained in the Letter of Intent dated 26-41984, but before the learned Arbitrator, the Plaintiffs based their claim upon another letter dated 28-4-1984 which had allegedly made variations in the terms of the original contract embodied in the said Letter of Intent, Consequently the learned Arbitrator has acted without jurisdiction by basing his Award on a contract which did not form part of the original claim of the plaintiffs. The contention is devoid of any force. Admittedly the transaction between the parties was governed by tender documents which embodied the main terms of the contract between the parties. No doubt the Letter of Intent dated 26-4-1984 also embodied additional terms agreed between the parties, but as has been earlier pointed out, the parties were mainly to be governed by the tender documents. Clause 66 of the General Conditions contained therein provides for reference of disputes, if any, arising between the parties to arbitration. It is not the case of the defendant that the present dispute which arose between the parties was outside clause 66 of the General Conditions of contract as embodied in the tender documents. No doubt the Letter of Intent dated 26-4-1984 referred to by Mr.B.M.. Bangesh, refers to additional terms, agreed between the parties and the same, according to the learned Arbitrator, had been further altered by the plaintiffs' letter dated 28-4-1984, but the same in no way could alter clause 66 of the tender documents which was the only agreement between the parties to refer the dispute arising between them to arbitration. Since the tender documents remained unaltered, the mere fact that the parties also exchanged letters dated 26-4-1984 or 28-4-1984 would not render the award invalid or without jurisdiction. The dispute which was referred to by the Court, to arbitration related to the payment of Rs, 14,38,075.65 claimed by the plaintiffs from the defendant on account of the said seven items. The same dispute has been decided by the learned arbitrator. The first contention of Mr.B.M. Bangesh is, therefore, repelled.
10. The next contention of Mr.B.M. Bangesh was that the letter dated 28-4-1984 notwithstanding the fact that it had not been replied to did not constitute a fresh contract between the parties. It may be pointed out that although all the terms contained in the defendant's letter dated 26-4-1984 were accepted by the plaintiffs but by another letter dated 28-4-1984 (Annexure"Cl')-Which had been addressed by the plaintiffs to the defendant, the plaintiffs referred to an understanding between the parties that all the rates of items quoted by the plaintiffs in the BOO would be binding on both the parties. This letter, therefore, clearly indicates that besides the terms agreed by the plaintiffs vide the Letter of Intent dated 26-4-1984, there was further understanding between the parties that all the rates of items quoted by the plaintiffs in BOQ would be binding on the parties.
Admittedly, there was no other evidence led by the parties in respect of the terms mutually agreed between the parties besides what had been agreed vide the said letter dated 26-4-1984, the question, therefore, arises whether the letter dated 28-4-1984 (Annexure `C-1') can be relied upon as conclusive evidence as to, the terms mutually agreed or understood between the parties apart from the said Letter of Intent. It 'is pertinent to point out that since the receipt of this letter was admitted by the defendant's witness. Aziz Y. Siddiqui and the contents of this letter were not disputed, at any time by the defendant, the same was relied upon by the learned Arbitrator, as sufficient evidence for determining;the rates agreed between the parties in respect of all the said seven disputed items. Mr. 13.M. Bangesh has not been able to show that this was an error of law committed by the learned Arbitrator. Consequently, I am not able to accept even the second argument of Mr.B.M. Bangesh.
11, The next argument of M.B.M. Bangesh was that there was no basis for the learned Arbitrator to grant interest to the plaintiffs. Reliance has been placed by the learned counsel upon the case Ghulam Abbas v. Trustees of the Port of Karachi (PLD 1987 SC.393). The main contention of the learned counsel was that the Arbitrator could not have awarded interest on an uncertain amount.
Reference in this respect was made by the learned counsel to the two legal notices respectively sent by the plaintiffs to the defendant dated 2-9-1984 and 15-10-1984. Mr.B.M. Bangesh has pointed out that in the said notices different amounts have been claimed by the plaintiffs towards interest.
Mr. S.E Hussaini, learned counsel for the plaintiffs, has pointed out that as the plaintiffs had been sending different Running Bills to the defendant from time to time, interest had been claimed by them in accordance with the amount found due at a particular time The learned counsel has invited my attention to the statement of claim filed before the learned Arbitrator whereby a sum of Rs,14,38,075.38 has been claimed as a' total amount' due to the plaintiffs, from the defendant. The learned counsel has pointed out that the said amount has been shown even in para. 10 of the application filed by the plaintiffs under section 20 of the Arbitration Act in Suit No 160/1985. It may be pointed out in this regard that after finding that a sum of Rs,14,38,07538 was due and payable to the plaintiffs from the defendant, and that the defendant had also wrongfully withheld the payment of Rs,6,20,432.63 to the plaintiffs, the learned Arbitrator found that the total sum due and payable by the defendant to the plaintiffs was a sum certain and in accordance. With the contract between the parties and thus, he, allowed the claim of interest at 6% per annum on the sum of Rs,14,38,07538 from 5-10-1984 from which date the, plaintiffs had claimed such amount from the defendant through their legal notice. The interest has been granted upto the date of the Award and I do not find that the Award vis-a-vis the interest is open to exception.
12. Lastly, Mr.B.M. Bangesh has argued that although, according to the order of this. Court, the Award was to be given by the learned Arbitrator by 15th May, 1986, but the same was given much thereafter. Consequently, according to the learned counsel, the Award without obtaining extension of time from the Court under section 28 of the Arbitration Act is invalid. I find no force in this argument as well The parties took part in the arbitration A proceedings without any objection being'raised by the defendant in this regard. Admittedly the defendant neither informed the Arbitrator and the other party that the time fixed by the Court had expired and that he would not be bound by the Award, if any, made by the Arbitrator. Contrary to that the defendant appeared before the Arbitrator and took part in the proceedings before him and it allowed the Arbitrator to give the Award. Consequently it does not lie in the mouth of the defendant to say now that the Award was given by the Arbitrator beyond the time fixed by the Court. Although no authorities are required in regard, but reference may be made to N.L.R. 1990 S,C.J. 183 and. PLD 1967 Lahore 204, wherein the principles of waiver and estoppel were applied.
13. In the result, I find no force in the objections and the same are dismissed. The Award is, therefore, made rule of the Court. Mr.S.E.Hussaini has pointed out that the learned Arbitrator has awarded interest upto the date of the Award. Under Section 29 of the Arbitration Act, this Court can award interest from the date of the decree till payment of the amount to the Plaintiffs. Consequently I further award interest accordingly at the same rate as has been awarded by the learned Arbitrator.
Objection dismissed.