SAJJAD ALI SHAH, J: --In 1976 Federation of Pakistan through Secretary, Ministry of Food, Agriculture and Co-operatives, Punjab (to be referred hereafter as borrower) executed agreement dated 29- 3-1976 with International Development Association (LDA), a subsidiary of World Bank as Creditor for advancement of loan of 23 million dollars for construction of seed factories. Clause 2.08 in Article II required that currency of U.S.A. Would be relevant for the purpose of general conditions specified and clause 3.06 enjoined borrower to employ foreign consultants approved by the creditor. Tender of Basico GmbH/Kock K.G (Joint German Venture), being lowest was accepted by borrower resulting in constancy agreement dated 26-11--1976.
2. In January 1978 Basico & Co. Went into liquidation and M/s. Kocks with approval of borrower associated Pakistan firm `Rist' (to be referred hereafter as Consultants) and new agreement dated 28-5-1978 was executed. Period of contract was for 5 years commencing from "starting date" specified in section 1.01(b). Under section 3.01, the President was to pay consultants in Deutsche Marks (shortly stated as D.M) an' amount not exceeding in value U.S. Dollars 2,137,878.00 (D.M.
5,173,665) at the specified rate of exchange viz. 2.42 D.M, to one U.S. Dollar.
3. Factories were constructed in Sahiwal, Khanewal and Rahim Yar Khan in 1978. It so happened that dollar depreciated against other world currencies. In 1980 consultants submitted their invoice for first quarter and second quarter of 1980 in D.M. By reference to the amount specified in Schedule C-I, C-II and C-III. The borrower refused to accept the bills and took up the stand that consultants must submit their bills in dollars which was specified in the Schedule C-I, C-II and C-III to the agreement. Consultants notified President of Pakistan by telex dated 3-9-1980 and finally on 24-12- 1980 borrower informed consultants and terminated contract with effect from 31-3-1981 on the ground that services rendered by them were highly inefficient and unsatisfactory.
4. Parties agreed to refer their disputes to Arbitration and in that connection each party nominated one Arbitrator. Claims and counter-claims were filed and issues were framed. Finally reference was made by the Arbitrators to Mr. Justice (Rtd.) Dorab Patel, a former Judge of the Supreme Court, as Umpire, who rendered award on 9-9-1984. The learned Umpire accepted construction of consultants on section 3.01 and held that borrower had to pay consultants in D.M. And further that borrower was in breach of contract in not making payments from and after second quarter of 1980 and consultants were justified to terminate the contract. Amounts decreed were deducted on the basis of exchange rate amounting to 92,122.66 D.M. It was clarified that all conversion of currency would be at the rate of 2.42 D.Ms perdollar.
5.Consultants and borrower filed objections under section 30 of the Arbitration Act on the ground that award suffered from errors of law apparent on the face of the record. Learned Senior Civil Judge rejected objections and made award rule of the Court. Against that decision, in the High Court F.A.O. No.113/87 was filed by the borrower and Civil Revision No.1662/87 was filed by the consultants. After hearing, High Court has concluded that dispute with regard to the interpretation of section 3.01 of the agreement was not specifically referred to the Arbitration and, therefore, interpretation in the award on that point was without lawful support and contrary to manifest of the agreement. Borrower was justified to ask consultants to submit their invoices in U.S. Dollars and in making payments in D.Ms after deduction by taking into consideration the present rate of exchange applicable at the time of submission of invoices. In the result FA.O. Partly succeeded and partly failed to the extent-that consultants were declared not to be entitled to the grant of amount deducted on the basis of fluctuation of currency rates i.e. 92,122.66 D.M and 71,720.86 as other deductions. Civil Revision was dismissed.
6. Decision of the High Court as mentioned above, has given rise to three petitions for leave to appeal filed in this Court. C.P. No.945-L/93 as filed by the consultants and C.P. No. 1159-L/93 is filed by the borrower and in both these petitions filed by opposite parties, the contentions raised are more or less common which show that both parties are not satisfied with the decision of the High Court. Contentions are firstly, whether interpretation of section 3.01 of Article III of agreement was specifically referred to Arbitration for decision and, therefore, fording thereon was not open to exception under sections 30 and 33 of the Arbitration Act. Secondly, whether conclusion with regard to section 3.01 suffers from errors of law apparent on the face of record. Thirdly, whether claim of borrower against consultants was not correctly decided.
Additionally on behalf of consultants contention is raised whether dispute ~ A about currency contract was specifically referred to the arbitration.
7. In C.P. No.946-L/93, arising from dismissal of revision, which is filed by the consultants, contention is raised that no separate reasons have been assigned by the High Court for its dismissal in spite of the observation that reasons are given in judgment in F.A.O.113/87.
8. Since both parties have challenged the decision of the High Court, we grant leave to examine the impugned judgment in the light of contentions 8 mentioned above.
A.A./J-104/S