' These proceedings are under section 28 of the Arbitration Act, 1940 seeking extension of time for completing arbitration proceedings and making of award. The last time extension granted by this Court was in J.M. No, 66/91. Four months' time was extended on 2-2-1992 which expired on 1-6-1992.
2. Initially in the month of July, 1988, arbitration proceedings were initiated and Messrs Kamal Azfar, Bar-at-Law and SA. Nizami were appointed as Arbitrators by the respective parties and Mr. Justice (Retd.) KA. Ghani was appointed as Umpire by both the Arbitrators. On 4-8-1988, petitioner filed its claim before the Arbitrators but the respondent before filing its reply initiated proceedings under section 33 of the Arbitration Act before this Court and stay was granted by this Court through which proceedings before the Arbitrators were stayed. This stay continued till 30th November, 1989 when J. M. No, 9/89 was dismissed by a learned Single Judge of this Court. Thereafter, proceedings started before the Arbitrators. Parties led their evidence till 15-10-1991 whereafter the Arbitrators asked the parties to seek extension of time for making award from this Court. In these circumstances, previous proceedings bearing J.M. No, 66/91 came up for hearing and were disposed of on 2-2-1992 and four months' time was extended. The respondent submitted his affidavit-in-evidence before the Arbitrators on 28-6-1992 who was cross-examined in the last week of July and first week of August, 1992. Then the matter went for the filing of written arguments by the petitioner on 27-8-1991 and the respondent was asked to make its submissions on 10-9- 1992. All these proceedings were conducted after 1st June, 1992 when the time for making award extended by this Court had expired. None of the parties raised any such objection before the Arbitrators.
3. On 21-1-1993 the petitioner through Annexure-P/16 submitted its written arguments, copy of which was duly served on Mr. Kamal Azfar. On 23-1-1993, clerk of the Arbitrators informed both the advocates of the parties that in view of the objection filed by Trading Corporation of Pakistan, parties may move High Court for extension of time. Under the circumstances, the petitioner has approached this. Court seeking extension of time.
4. The questions which require determination are: Whether in the circumstances, as narrated above, the time for making award should be extended or not? Secondly, what is the effect of the proceedings which were held before the Arbitrators after expiry of time extended by this Court and before filing application seeking extension of time
5. The law is very clear on both these questions. Section 28 of the Arbitration Act, 1940 confers discretion upon the Courts to extend time for making award. This discretion can be exercised by the Court whether the time has expired or not and even after making of award. The term "from time to time" clearly suggests that not only on one occasion but the Court can grant such extension on more than one occasion but such discretion should be exercised judicially and not capriciously.
There are several case-laws on this point and to start with I would like to quote the case of Province of Sindh v. Haji Khan (PLD 1983 Kar. 621) wherein Mr. Naimuddin, J. (as he then was) held that although the award given beyond time fixed by the Court but the said time was impliedly extended by the Court under section 28 which extension was neither arbitrary nor capricious. It was held by a Division Bench of Allahabad High Court that section 28 of the Arbitration Act gives unrestricted powers to Court to enlarge the time for making award irrespective of the fact whether the time for making award has expired or not. In this reported case, the Court observed that the arbitrators were not responsible for the delay and that the proceedings were over except for filing of award.
Therefore, time was extended. (For reference see Amar Nath v. Uggar Sen and others AIR 1949 Allahabad 399). In the present case also, the case is now fixed for filing of written arguments by the counsel for the respondents whereafter the matter will go for pronouncement of award. In the case of Elite Builders and Developers v. Nooruddin Moosa Hemani (1988 CLC 564), it was held by this Court that Court can extend time by an express order and by implication as well. In another case from Indian jurisdiction titled as Hari Shanker Lal v. Shambhu Nath and others (AIR 1962 SC 78), it was held by the Indian Supreme Court that after expiry of four months, arbitrators become functus officio unless the period is extended by the Court. It was further held that such time can be extended by the Court even after making award. All these and other case-law clearly suggest that the Courts have discretion to extend time even after expiry of four months' time.
6. Mr Gulzar Ahmed, learned counsel for the petitioner has also raised objection on the conduct of respondent that they have participated in the proceedings after expiry of time granted by this Court i,e, after 1-6-1992, as such they have acquiesced in the proceedings and thereby cannot turn round to challenge the same. This fact has not been denied by the respondents that after 1st June, 1992 they have appeared before the Arbitrators. Respondent has also led its evidence in the months of July and August, 1993 after expiry of four months. It was for the first time the respondent has raised objection when the written arguments were filed by the petitioner. The question of waiver and acquiescence during arbitration proceedings has been settled by our Supreme Court.
In the case of Messrs Qamaruddin Ahmad & Co. v. Government of Pakistan (1985 SCM R 1775), leave to appeal was granted by the Supreme Court to consider the point whether the Trial Judge was not justified in extending the period of limitation for giving the award by the arbitrator beyond four months after entering upon the reference. The Hon'ble Supreme Court of Pakistan came to the following conclusion:- "After having heard the learned counsel for the parties in the light of the record before us, we find that all these aspects have already been examined by the learned Administration Judge in details and the High Court also dealt with these adequately. It has been held that in view of the conduct of the appellant in appearing before the Arbitrator even after the time for giving the award had expired, without any objection, and the fact that the Arbitrator gave adjournments at the instance of the appellant, the time spent beyond four months by the Arbitrator had been justifiably extended under section 28 of the Arbitration Act, and the discretion exercised by the Trial Court in allowing the time with retrospective effect was affirmed."
7. In the recent case of WAPDA and another v. Messrs Khanzada Muhammad Abdul Haq Khan Khattak & Company (PLD 1990 SC 359), the question which came up for consideration before the Supreme Court was whether by consent, the parties can waive the prescribed period of four months by taking part in the arbitration proceedings and submitting themselves to the jurisdiction of the arbitrator. It was held that if the parties after expiry of four months submit themselves to the jurisdiction of the arbitrator and take part in the proceedings enabling the arbitrator to make an award, then such party cannot say that the arbitrator acted without jurisdiction. It was further held that in such circumstances, principle of waiver and estoppel would apply with full force.
8. Mr. Mansoorul Arfm, learned counsel for the respondent has relied upon the case of Messrs Rafi Associates Limited v. Government of Pakistan (1985 CLC 721) in support of his argument that where the parties and arbitrator have not acted with reasonable diligence to seriously finalize arbitration proceedings, then in such cases, time should not be extended. In this reported case, the question for determination was whether the award which was made beyond period of four months after entering upon the reference, be made rule of the Court by enlarging time. It was also held by a learned Single Judge of this Court in the said case that the Courts may in appropriate case extend time even after award has been filed in the Court but such discretion though very wide should be exercised judiciously and on consideration of all the circumstances of the case. In the instant case, the proceedings before the arbitrators were stayed by the order of this Court in J.M. No, 9 of 1989 which remained in operation for nearly 15 months when the same was dismissed on 30th November, 1989 by Mr. Mamoon Kazi, J. (as he then was). For this period of delay, neither the arbitrators nor the parties could be held responsible as serious issues relating to the interpretation of arbitration agreement were involved in J. M. No, 9 of 1989. Following is the operative para. Of the order dated 30-11-1989:-- "8. In the result, I am unable to agree with the contention of Mr. Mansoorul Arlin that the respondent alone cannot invoke the arbitration clause in the agreement and it must do so jointly with the other sellers. There appears to be nothing in the agreement to support this contention. The upshot of the above discussion, is that, the application is dismissed and the matter shall proceed before the arbitration in accordance with the terms of the arbitration clause in the agreement."
9. In the case of Sulaiman Ebrahim H. Jaffer v. Karachi Cooperative Housing Societies Union Ltd.
(PLD 1963 Karachi 316), it was held by a learned Single Judge of this Court as follows:- "9. On the facts I find that this is a fit case where extension should be granted. The respondents have not alleged anything against the Arbitrator or his conduct of the proceedings as far as they have gone before him already. The respondents appeared before the arbitrator even after the time had expired and raised no objection to the proceeding."
10. A brief resume of the conduct of the parties shows that both parties have contributed towards delay in finalisation of arbitration proceedings. The present stage of arbitration is for the filing of written arguments by the respondent and thereafter for pronouncement of award. At this stage, if the time is not granted, it will amount to bringing the case at the stage of naught which will not only cause great hardship and inconvenience to the parties but will not be inconsistent with the law as discussed hereinabove. I am of the considered view that the petitioner has made out a case for extension of time and the time is accordingly extended for next four months from today. The main application stands disposed of.