' This is a petition under section 5 of the Arbitration (Protocol and Convention) Act, 1937 (hereinafter referred to as the "Act 1937") for enforcement of a foreign award, dated 1st May, 1974. In the first place, I would like to observe that this proceeding should have been registered as a suit in view of subsection (2) of the Act, 1937 as Rule 294 of the Sindh Chief Court Rules (O.S.) is not in conformity with section(s) 5 and 6 of the Act, 1937. (For further reference see order, dated 31-8-1998, passed in A. Meridith Jones Ltd. v. Usman Textiles Ltd. J.M. No,22 of 1998).
2. The undisputed facts of this case are that as a result of some five contracts executed between the parties, during the period of 30th October, 1972 to 8th November, 1972, the respondents sold to the petitioner some 6000 (six thousand) bales of cotton. All these contracts contained a clause for arbitration between the parties in case of any dispute which was to be conducted in accordance with the rules and regulations of the Liverpool Cotton Association Ltd. Liverpool, United Kingdom. It is alleged in the petition that as a result of certain differences between the parties, the matter was referred by the petitioner to the Liverpool Cotton Association (for brevity sake hereinafter referred to as L.C.A.). On 1st May, 1974, an award was pronounced whereby the respondent was directed to pay, to the petitioner, a sum of U.S. Dollars 517,270.00 with interest at the rate of 10% per annum from the date of award till realization. The respondent was further directed to pay a sum of U.K. 500 towards the fees and expenses of the arbitration proceedings. It is claimed in the petition that the respondent filed an appeal against the Award before the Technical Committee of L.C.A., which was dismissed and the award was upheld by a judgment, dated 2nd May, 1975, whereby the respondent was required to pay, to the petitioner, a sum of U.S. $ 642,943.36 with interest at the rate of 9% per annum on the amount of award from 16th May, 1975 until the date of payment. The respondent was further required to pay a further sum of U.K.
750.00 being the total cost of the Award. It is averred in the petition that since the respondent failed to comply with the direction of the award, as contained therein, petitioner has filed this petition seeking enforcement of the abovementioned foreign award with the following relief:
(a) Order that, the said award be filed in this Honourable Court;
(h) To pronounce judgment in terms of the said award;
(c) Award the cost of this application to the petitioner; and
(d) Order any other/further relief as this Honourable Court may deem fit to grant.
3. Before proceeding further, I would like to deal with one of the interesting features of this case. On 13th February, 1978, the respondent filed an application under Order XXVI, Rules 4 and 5 of the Code of Civil Procedure, 1908, (hereinafter referred to as "C.P.C.") which was numbered as C.M.A. No,614 of 1978 with the prayer that one Mr. C.P. Bramble who was arbitrator from the respondent side during the original arbitration proceedings and one more person namely the Secretary of L.C.A., be examined on commission or on interrogatories. This application came up for hearing on the 20th August, 1978, before this Court which was granted by Naeemuddin, J. (as his lordship then was) in the following manner:-- "Some of the objections taken to the award are: ' That Mr. C.P. Bramble, was never appointed as arbitrator by the respondent. That no notice of arbitration proceedings was ever given to the respondent who had no opportunity to present their case before the arbitrator.
' Mr. C.P. Bramble was one of the arbitrators who gave the impugned award. In view of the above, I am of the view that examination of Mr. C.P. Bramble is necessary. It is not denied that he is residing in England. Therefore, both the conditions laid down in the Rule 5 of Order XXVI, C.P.C. Are fulfilled in this case.
' The examination of witness No,2, is sought on the ground that he possesses the record of the arbitration proceedings which can prove whether any notice was served or not on the respondent.
Therefore, the examination of this witness on commission is also necessary.
' I, accordingly grant the application. The respondent to submit interrogatories within one month.
The petitioner shall also file cross-interrogatories, if any, within one month from the respondent.
Commission to issue thereafter returnable within three months. Costs of the commission and Commissioner's fee will be borne by the respondent initially...."
4. The above-noted order gives rise to the question, what is the scope of the present proceedings which has been filed under section 5 of the Act 1937, seeking pronouncement of judgment in terms of the Award and thereafter framing of decree in 'accordance with the award. Both the parties were directed to make their respective submissions on this aspect of the case. It was argued by Mr. Hamza I. Ali that the order for examination of witnesses on commission was passed some 20 years ago in the instant proceedings which was acted upon and which had also attained finality as none of the parties filed any appeal; therefore, as suggested by him, it is a past and closed transaction and it cannot be re-opened. Secondly, there is no bar or prohibition in the Act, 1937, where-by a Court is prohibited from examining any party in a proceeding arising out of the Act 1937. He has also referred to the cases Messrs Alhaj Muhammad Keramat Ali & Co. Ltd. v. Messrs Amin Jute Mills Ltd. Chittagong (PLD 1961 Dacca 452), Haji Tayab and 2 others v. Eastern Textile Mills Ltd., Chittagong and 12 others (PLD 1970 Karachi 357), Messrs European Grain & Shipping Ltd. v. Messrs Sargroh Oil Industries Ltd. (PLD 1982 SC 407) and the case Messrs European Grain & Shipping Ltd. v.
Messrs Sargroh Oil Industries Ltd. (1984 SCMR 553). He has also placed reliance on subsection (3) of section 7 of the Act, 1937, and argued that where the parties resisting enforcement of foreign award on the grounds other than mentioned in subsections (1) and (2) of section 7, the Court is competent to invite further evidence of the parties: He has emphasised importance of such practice as far as instant case is concerned on the ground that there was an allegation of misconduct against their arbitrator and the proceedings being conducted at Liverpool, U.K., no record was within the possession of either of the parties of prove such alleged misconduct of the Arbitrator. In order to understand his arguments it would be pertinent if subsection (3) of section 7 of the Act, 1937 is reproduced:-- "S.7. (1) ......................................
(2)
(3) If a party seeking to resist the enforcement of a foreign award proves that there is any ground other than the non-existence of the conditions specified in clause (a), (b) and (c) of subsection (1), or the existence of the conditions specified in clauses (b) and (c) of subsection (2), entitling him to contest the validity of the award, the Court may, if it thinks fit, either refuse to enforce the award or adjourn the hearing until after the expiration of such period as appears to the Court to be reasonably sufficient to enable that party to take the necessary steps to have the award annulled by competent tribunal."
5. The cases Muhammad Keramat Ali and Haji Tayab (supra) pertain to the interpretation of sections 16, 30 and 33 of the Arbitration Act, 1940. In the case Alhaj Muhammad Keramat Ali & Co.
(supra), it was held by a Division Bench of the then Dacca High Court, that "the question as to how many bales were actually opened, is of a question relating to what happened before the arbitrators and if there was any dispute with regard to it, the arbitrator could be called as witness to ascertain the same". Reference was made to the case Leiserach v. Schalit (1934) 2 KB 353). The judgment in case Haji Tayab (-supra) was delivered by a Division Bench of this Court. In that case one of the grounds for attacking the award was that it was invalid as the arbitrator neither issued any notice nor heard the appellants at any stage of the arbitration proceedings. It was observed by the Division Bench of this Court that "in this connection we would state that the least that could have been done in view of this being the main issue before the learned Single Judge was to summon the arbitrator as a Court witness". The cases Leiserach and Muhammad Keramat Ali & Co.
(supra) were referred to Reference was also made to an earlier decision of another Division Bench of this Court in S.M. Fazail & Company v. Overseas Cotton Company (PLD 1959 Karachi 320) where it was observed that in a case where allegations are made by parties against an arbitrator or an umpire, it is always better to examine such umpire or arbitrator as Court witness to meet the allegations made against him in respect of partiality. However, all these cases arise out of the proceedings from Arbitration Act, 1940.
6. The case of European Grain & Shipping Ltd. As reported in PLD 1982 SC 407, is a leave granting order while the same case is reported in 1984 SCMR 553 which is the order of appeal. One of the issues framed in that case was whether the arbitrators have misconducted for which the trial Court granted permission to the respondent/ appellant for examining two witnesses on commission who were residents outside Pakistan. This question 'reached Supreme Court and the leave to appeal was granted to consider, inter alia, whether in such a case, the only evidence that can be recorded against the enforcement of the foreign award are that which relate to proving all or any of the grounds mentioned in section 7 (1) and (2) of the Act, 1937, and whether evidence relating to misconduct in such proceedings can only be. Confined to that kind of misconduct which is also regarded as breach of rules of natural justice and not "misconduct" of general nature? However, it was not felt necessary by the Hon'ble Supreme Court to decide these questions as neither the trial Court nor the. Lahore High Court had by that time decided the question of law and the jurisdiction, involved in that case. Thus, the matter was remanded for decision on the legal and _jurisdictional issues at an early date. These authorities do not lend any support to Mr. Hamza Ali, Advocate. Both the learned counsel have candidly admitted that there is no law on this question in so far as Act 1937, is concerned.
7. Section 7( ) of the Act, 1937 deals with the question of enforceability of a foreign award.
Subsection (2) deals with the cases where a foreign award cannot be enforced. Subsection t3) deals with a different situation not covered by subsections (1) and (2). Section 7(3) of the Act 1937 enables a party to resist the enforcement of a foreign award on grounds other than the mentioned In clauses (a), (b) and (c) of subsections (1) and clauses (b) and (c) of subsection (2). The only condition laid down in subsection (3) is that such party should prove that there is no other ground, other than the grounds mentioned earlier in subsections (1) and (2). The burden is upon the party resisting the enforcement of foreign award to prove that there exist other grounds to resist the enforcement of a foreign award. In my considered view, the ground of misconduct committed by an arbitrator may be termed as "any ground" to resist the enforcement of a foreign award. No law, either in Pakistan or in England, permits an arbitrator to commit misconduct; therefore, it may be termed to be a good ground to resist the enforcement of a foreign award under subsection (3) of section 7 of the Act 1937. I am fully conscious of an earlier decision of this Court reported as Messrs European Grain & Shipping Ltd. v. Messrs Polychem Company Ltd. (PLD 1990 Karachi 254) where it was held that the scope of section 7 of the Act 1937 is restricted only to the grounds referred to therein and thus it cannot be liberally construed. A plain reading of section 7(3) will show that the Court is competent to refuse enforcement of an award on "any ground" other than mentioned in the clauses of subsections (1) and (2). Nowhere this term "any ground" as used in section 7(3) is defined in the entire Act of 1937. In my humble view, it will include such grounds which are contrary/violative of the Islamic Injunctions, the Objectives Resolution, Fundamental Rights and other established laws of this country. (See: Ghulam Ali and 2 others v. Mst. Ghulam Sarwar Naqvi (PLD 1990 SC 1 at pages 22/23).
8. How can a party prove misconduct of an arbitrator, when the arbitrator's proceedings were conducted outside Pakistan? In the instant case, the entire record of the two proceedings, one held before the arbitrators and, the second held before Technical Committee in appeal, are in the possession of the Liverpool Cotton Association (L.C.A.). For this limited purpose, and in order to enable the respondent to prove misconduct on the part of their arbitrator, this Court was competent to order examination of such arbitrator on commission. This does not mean that in all cases where allegations of misconduct are raised the Court should invariably order the examination of arbitrator. This exercise should be ordered in very rare and exceptional cases as of the instant case, or where the party raising such allegations, prima facie, establishes before the Court a case of misconduct of his arbitrator. None of the advocates have argued on the point as to what is the scope of misconduct in the matter of foreign award. Thus, I would not like to dilate upon this question any further but would like to observe that in the instant case, it is alleged by the respondents that they never authorised the arbitrator to act on their behalf. And that after giving a consent award, he appeared as their counsel at the appellate stage and challenged his own award. Again, it is claimed by the respondents that they did not authorise the arbitrator to act on their behalf before the Appeal Committee. If it is correct, then it may constitute one of such cases falling within the scope of misconduct. To clarify this position I would like to refer the case of Brooke Bond (Pakistan) Ltd. v. Conciliator and 6 others (PLD 1977 SC 237 at 2671 where the term "misconduct" in reference - to an arbitrator appointed under provisions of the Industrial Relations Ordinance, 1969, was considered in the following manner:- " The term ' misconduct' used in connection- with arbitration does not necessarily imply anything in the nature of fraud or moral turpitude. In the judicial sense the misconduct of Arbitrator means his failure to perform his essential duty, resulting in substantial miscarriage of justice between the parties. According to Atkin, J. In Williams v. Willis (*) the words misconducted the proceedings' means such a mishandling of arbitration as is likely to cause some substantial miscarriage of justice. In the American Juris-prudence, Vol. 3, on pages 964-5, it is observed that awards which are valid on their faces may be set aside in equity for misconduct on the part of arbitrators, and the extrinsic evidence is Admissible to prove such misconduct. Conduct in consist at with the duties imposed upon those selected as the arbitrators, either at the hearing, or in reaching their conclusions will frequently constitute misconduct as will impeach an award..." (*) Williams v. Willis (83 U KB 1296).
9. Unfortunately this matter is pending for the last 22 years. For the first time, respondents tiled their objections on 3-10-1977 raising as many as 23 objections. Now, due to lapse of time several objections raised by the respondents have been answered by the different Courts in different proceedings and therefore Mr. Hamza I. Ali has rightly confined his arguments to mainly five objections which are reproduced as follows:--
(i) This is, not a "Foreign Award" within the meaning of section 2 of Arbitration (Protocol- and Convention) Act, 1937 and is therefore not enforceable.
(ii) The Award is a copy which is not certified by Consulate General of Pakistan in U.K. As required by Rule 298 of Sindh Chief Court Rules (0.S.).
(iii) The power of attorney is inadmissible, firstly, as it is a photocopy and secondly it has not been re-stamped under sections 3 and 18 of Stamp Act.
(iv) The application and Vakalatnama have not been duly signed under due authority.
(v) The Award is not enforceable having been made in violation of law governing arbitration procedure and being contrary to public policy of Pakistan and due to misconduct of arbitrator Mr. C.P. Bramble.
10. Mr. Hamza I. Ali argued that in order to constitute foreign award three conditions are necessary, namely, it should be result of an agreement for arbitration as set-forth in the First Schedule to the Act, 1937. Secondly, it should be between persons of whom one is subject to the jurisdiction of one of such powers which the Federal Government has notified in the official Gazette and the other is subject to the jurisdiction of some of the other powers. It was argued that at the relevant time when the award was announced Hong Kong was a crown colony of the England and cannot be treated as another power. According to learned counsel, this situation is not covered by the Notification issued by the Central Government. It was further argued that the Foreign Award and Maintenance Orders, Enforcement (Amendment) Ordinance, 1962 has not declared Pakistan to be power party to the Convention and declared U.K. As one of the territories to which the Convention under Act 1937 applied; therefore, he argued the respondent is not subject to the jurisdiction of his "Britanic Magesty". To summarize his arguments, Pakistan has not so far declared itself power party to the Convention and therefore, the conditions prescribed by section 2 of the Act, 1937, are totally absent, and, hence award made by the arbitration of the Liverpool Cotton Association cannot be treated as foreign award. Learned counsel for the respondent has cited all the case-law, for and against his case which are as follows:-- ' Dalmia Cement Ltd. v. National Bank of Pakistan (1974) 3 All ER 189).
' Messrs Barlas Bros. (Karachi) &Co. v. Messrs Yangtze (London) Ltd. (PLD 1959 Karachi 423).
' Messrs Yangtze (London) Ltd. v. Messrs Barlas Brothers (Karachi) (PLD 1961 SC 573).
' Nan Fung Textiles Ltd. Hongkong v. H. Pir Muhammad Shamsuddin (PLD 1979 Karachi 762).
' Nan Fung Textiles Ltd. v. Sadiq Traders Ltd. (PLD 1982 Karachi 619).
' Ralli Brothers & Coney Ltd. v. Muhammad Amin Muhammad Bashir Ltd. (1987 CLC 83).
(vii) Petrocon (Pvt.) Ltd. v. Hyderabad Development Authority, H)derabad (1990 MLD 1675).
(viii) Hassanali & Co. Cotton (Private) Limited v. Poly Cotton S.A., 2-Rue, Andrien Vallin, 1201 Geneva, Switzerland and others (PLD 1996 Karachi 416).
11. Mr. Hamza Ali, laid much emphasis on the interpretation of section 2 of the Act 1937. He stressed that this provision envisages two separate powers which must have been declared as parties to the Convention. On this premise, he argued that there is only one power mentioned in the notification which is "His Britannic Magesty" while in the instant case, according to learned counsel, there are parties belonging to two powers. He pointed out that the plaintiff is registered in Hong Kong, which is a Crown Colony and the defendant Nichiman is subject of another power i,e, Pakistan. He has placed much reliance on the case of Dalmia Cement Ltd. (supra) where the Queen's Bench Division, declined to enforce the award requiring Bank of India to make payments to the Dalmia Cement Ltd. In that case, the question involved was the definition of a foreign award as provided in section 35 of the English Arbitration Act, 1950. 'That case was considered strictly from the point of view English Law vis-a-vis Indian Arbitration Act, 1940 and the case of Pakistan was held to be different than the case before the Queen's Bench. Reference was made to the Foreign Awards and Maintenance Orders Enforcement (Amendment), (1962) (PLD 1962 Central Statutes 607) through which subsection (2) was introduced in the Act 1937 which reads as follows:--
(2) For the removal of doubt it is hereby declared that any notification issued under this section by the late Government of India before the fifteenth day of August, 1947, and in force on that day for the purpose of enforcement of foreign awards in British India, declaring any Power to be a party to the said Convention or any territory to be the territory to which the Convention applies, shall be deemed to be a notification issued by the Central Government for the purpose of enforcement of foreign awards in Pakistan...."
12. Mr. Bashir Shaikh has referred to the cases Nan Fung Textiles, Ralli Brothers, Petrocon, and Hassan Ali (supra). The question of reciprocal arrangement was considered by this Court in the both cases of Nan Fung (supra). In the case of PLD 1979 Karachi 762 at 777 (Nan Fung Textiles), more or less same plea as of Mr. Hamza Ali was taken by Mr. A. Rauf, Advocate who was opposing the enforcement of a foreign award made, as per rules and regulations of the Liverpool Cotton Association Ltd. In that case also, the plaintiff was a firm of Hong Kong and the defendant was of Pakistan origin. Reference was made to the judgment of Justice Kerr of Queen's Bench Division in the case Dalmia Cement Ltd. (supra) whereafter it was held by Ajmal Mian,. J. (now Chief Justice of Pakistan) that "It is the privilege or prerogative of the Government of Pakistan _to decide as to whether the award given in a particular foreign country should be enforceable in Pakistan or not, notwithstanding that the country in which the award has been given has not made any reciprocal arrangement for the enforcement of Pakistan awards as contemplated in section 2 of the Act. The Government of Pakistan has expressed its intention not through a notification but it has been manifested through an enactment and, therefore. I cannot decline to enforce the instant award on the ground that in England no reciprocal provisions have been provided for the enforcement of Pakistani awards " This view was followed by another Judge of this Court Saleem Akhtar, J. (as his lordship then was) in the case of Sadiq Traders (PLD 1982 Karachi 619). The arguments of learned counsel for the respondent did not compel me enough to take a view contrary to the two decisions of Nan Fung cases. The decision of Dalmia Cement Ltd. (supra) is of no help to the respondent as the learned Judges of the Queen's Bench, have held that in Pakistan it is a different situation, in view of the introduction of subsection (2) to section 2 of Act 1937. Following is the relevant observation from the case of Dalmia Cement Ltd. (1974) 3 All ER 189 at 198):-- ' It is also right to mention that the difficulty which faces me has been recognised in the municipal law of Pakistan. This is shown by the decision of Supreme Court of Pakistan in Yangtze (London) Ltd. v. Barlas Bros. (Karachi) (PLD 1961 SC 573) to which I was referred by counsel for the Bank. The Supreme Court there held, in effect, that despite the continued operation in Pakistan of the India Arbitration (Protocol and Convention) Act, 1937 by reason of section .18 of the Indian Independence Act, 1947, the Republic of Pakistan was not a party to the Convention. This was remedied by the Pakistan Foreign Awards and Maintenance Orders Enforcement (Amendment) Ordinance, 1962 which was enacted (for the avoidance of doubt) retrospectively to 15th August, 1947, the date on which the Dominion of Pakistan came into existence. While this illustrates the same difficulty in relation to the municipal law of Pakistan, I mention it only for the sake of completeness. It has no direct bearing, since I have to decide the issue on the basis of the law of this country. Unfortunately, if my conclusion in relation to the law of this country is correct, then the position is that although the legislation of both India and Pakistan since 1962 clearly appears to provide For satis factory reciprocal arrangements in these countries for the purposes of section 35(1)(b) of the 1950 Act, the position in the United Kingdom is that further formal Orders-in-Council are needed to fulfil the requirements of this section as a matter of English Law "
(Emphasis added).
13. Recently in the case of Hitachi Ltd. And another v. Rupali Polyester and others (1998 SCMR 1618 at 1650) the Hon'ble Supreme Court, after reference to the cases as mentioned in para. 10 and other cases, made certain distinctions in the foreign and domestic awards and held inter alia, that the nationality of the award does not solely depend on the venue of arbitration proceedings. Reference was also made to the case Oil and Natural Gas Commission v. Western Company of North America (AIR 1987 SC 674). The two awards which were subject-matter of that case were held to be domestic awards as the same were made on an arbitration agreement governed by the laws of Pakistan. In the instant case, it is not claimed by the respondent that the constitution of arbitration and the proceedings before the arbitrators were to be governed by the Pakistani Laws. I may also refer here to para. 633 of Vol.2 of the Halsbury's Laws of England (4th Edn. 1973) where foreign award has been defined as an award given after 28th July, 1924 "pursuant to an agreement for arbitration to which the Protocol on Arbitration clauses applies, between persons subject to the jurisdiction of such powers as may be declared by Order-in-Council to be parties to the Convention on the Execution of Foreign Arbitral Awards, and in one of such territories as may be similarly declared to be territories to which the Convention applies". The present award has all characteristics and ingredients of a foreign Award. (See: Messrs Rupali Polyester Ltd. v. Dr. Nael G.
Bunni and others (PLD 1994 Lahore 525).
14. As a result of the above discussion, the objection of the respondent that it is not a foreign award is overruled. Now, I will deal with the other objections that this award is not enforceable in Pakistan as contended by Mr. Hamza Ali.
15. The second objection of the respondent pertains to non-filing of certified copy of the award. It was argued by Mr. Hamza Ali that section 8 of the Act 1937, requires that the party seeking enforcement of foreign award must produce, either the original award or a copy of such award duly authenticated in a manner regarded by the law of the country in which it was made. It was contended that only a photo copy of the award was filed which was neither authenticated in a manner as prescribed by law nor it was attested by any officer of the Pakistan Embassy in England and, therefore, no presumption as to its genuineness could be drawn as provided in Rule 298 of the Sindh Chief Court Rules (0.S.). It was argued by Mr. Bashir A. Shaikh that the second objection raised by the respondent is inkconceived as original award, dated 1st May, 1974 stood merged in the appeal award, dated 2nd May, 1975, pronounced by the Technical Appeal Committee and that original copy of Appellate award has been filed as Annexure "G" to the petition. He has further submitted that on 7th February, 1998, the original copies of the authentication by the Notary Public, England alongwith statement on oath of Mr. W.J. Neotan, the then General Manager of Liverpool Cotton Association, certifying to be true copies of the originals, were filed in this Court. Both the advocates have referred to Article 89(v) of the Qanun-eShahadat, 1984 which provides that to prove a public document of a foreign country, the requirement will be either its original or a copy of certificate by Legal Keeper certified under the seal of a Notary Public or of a Pakistan Counsel or Diplomatic Agent. Mr. Bashir Shaikh has also placed reliance on the case Farokh Homi Irani v.
Nargis Farokh Irani (PLD 1963 (W.P.) Karachi 567). In that case the objection was that the foreign judgment which was produced before this Court and which was a judgment of the Bombay .High Court, was not in accordance with the section 86 of the repealed Evidence Act, 1872. I would like to stop here for a moment to say that both the provisions of Evidence Act (now repealed) and Qanun-eShahadat as referred above are identical. The objection raised was overruled by the learned Single Judge of , this Court Waheeduddin Ahmed, J. (as his lordship then was), in view of the fact that petitioner himself admitted in the evidence that an ex parte judgment was passed by the Bombay High Court.
16. I have examined Annexure-G filed with the plaint which is a photo copy of an award signed by the Chairman, Technical Appeal Committee. In respect of this photo copy, one Mr. Modood Ahmed Khan, claiming to be the attorney of plaintiff, has filed his affidavit as Annexure-H to the plaint, stating on oath that the original and appellate awards were made in pursuant to the arbitration agreement and that this is the final and conclusive determination of the dispute between the parties. Therefore, Mr. Bashir A. Shaikh was not correct when he said that the copy of award of Appeal Committee filed with the plaint was duly authenticated. Further perusal of case file indicates that on 7-2-1998 the learned counsel for the petitioner has filed original copy of Annexure-G to the plaint, as well as original of Annexure-I. Mr. Hamza Ali has rightly objected on the mode of bringing original document on record as adopted by the counsel for the petitioner; he went to the extent of saying that these documents were filed surreptitiously by the plaintiff at the back of the respondent; therefore, such documents cannot be considered..
17. It is not in dispute that an award was passed as a result of arbitration conducted under the Rules and Regulations of L.C.A. This objection was raised initially in the year 1978, which is now being reiterated by the respondent. But during this period, much development took place in this case. The respondents' arbitrator, namely Mr. C.P. Bramble, was examined on commission by order of this Court as referred in para. 3 above. No question was suggested by the respondent, on whose application such commission was ordered, that no award was given. Even in the objections filed by the respondent, the pronouncement of the two awards, one by the arbitrator, another by the Technical Appeal Committee, have not been denied. It is the manner of proceedings and the conduct of arbitrator, which have been challenged. It would be further relevant to refer to paras.
Nos.7 and 8 of the concise statement, dated 22-9-1979 filed by the counsel for respondents for the purpose of forwarding interrogatories for the examination of witnesses. All these facts indicate that there was an award announced by the arbitrator, which was confirmed by the Technical Appeal Committee of the Liverpool Cotton Association (L.C.A.). The respondent has filed evidence as per provision of section 8(1) of the Act, 1937 to prove the Award but at a belated stage and not in a befitting manner. During the final stages of the arguments, these authenticated copies of award were available on the case file and to non-suit the plaintiff, merely on this technical ground, will be to press technicalities too far. Mr. Bashir A. Shaikh has placed reliance on the cases Manager, Jammu and Kashmir State Property in . Pakistan v. Khuda Yar and another (PLD 1975 SC 678) where it was held by a Full Bench of Hon'ble Supreme Court that the object of procedural law, legal formalities and technicalities should not be allowed to defeat the ends of justice. Recently in the case of Jameel Ahmed v. Late Saifuddin (1997 SCMR 260) it was held inter alia, by the Supreme Court, while reiterating the principle laid down in the cases Manager, Jammu and Kashmir State in Pakistan (supra) and Imtiaz Ahmed v. Ghulam Ali and others (PLD 1963 SC 382 at 400) that "It is well settled that principal object behind all legal formalities is to safeguard the paramount interest of justice and mere technicalities unless offering a insurmountable hurdle should not be allowed to defeat the ends of justice". In the case Mst. Begum and others v. Mst. Begum Kaniz Fatima Hayat and others (1989 SCMR 883) it was held by a Full Bench of Hon'ble Supreme Court that the procedure or rules are meant to foster cause of justice and that a party should not be burdened with penalty except when positive evidence of negligence beyond explanation is available. Further reference can be made to the case of Jane Margaret William v. Abdul Hameed Mian (1994 SCMR 1555 at 1563) where following observations were made:-- " There was nothing in law which prevented the Court from treating the application under section 151, C.P.C. Filed by respondent as cross-objection to the appeal filed by the appellant, if it was otherwise competent in law. It needs no mention that all rules of procedure Framed for regulating the proceedings before a Court or Tribunal are meant for advancing the course of justice.
Therefore, procedural laws and rules cannot be used as a means for denying the relief to an aggrieved party on ground of technical non-observance of these rules or procedural laws...."
18. As a consequence of aforesaid discussion, I overrule the second objection raised by Mr. Harnza I.
Ali, learned counsel for the respondents. This brings us to objections Nos.3 and 4 which 1 would like to discuss jointly as both are inter-related. The third objection of the respondent is in respect of the power of attorney and fourth in respect of the execution of Vakalatnama.
19. It was argued by Mr. Hamm I. Ali that the power of attorney filed with the petition was not authenticated by the Pakistan Consulate at England or Hong Kong and that its photo copy was filed. Reliance is placed on Article 95 of Qanun-e-Shahadat, 1984. However, he has not denied that the petitioner has filed originals of the said document on 7-2-1998. It will be pertinent to note that after filing of this petition, office raised objection on the same day i,e, 8-11-1997 where one of the objection was that the compliance of Rule 114 of Sindh Chief Court Rules (O.S.) has not been made.
Sub-rule (1) of Rule 114 requires filing of a power of attorney in Court in case a party is represented by a recognized agent. Sub-rule (2) provides that the Deputy Registrar shall examine such power of attorney and if it contains necessary powers shall make an entry to that effect at the foot of the proceeding and return the power-of-attorney to the recognized agent. It is further provided in this sub-rule that where any objection is raised by a party, the petitioner shall leave a copy of the power of attorney at the office of the Deputy Registrar for inspection by the opposite-party or his advocate. From perusal of note at page 2 of the petition (reverse of page 1) it would appear that the office objection raised for compliance of Rule 114 was complied with by the petitioner. In case the respondent had any further grievance, he should have applied for inspection of the said power of attorney as provided in sub-rule (2) of Rule 114 of Sindh Chief Court Rules (0.S.).
20. 1 have examined the original power of attorney which is, dated 24-4-1976 and duly notarised at Hong Kong. It is countersigned by one Mr, Azfar Shafqat, Vice-Consular, Consulate General of Pakistan, Hong Kong and is stamped with Rs,25 adhesive stamp. It appears from the office noting that its original was shown at the initial stage in order to meet the office objection No,1 . Mr.- Bashir Sheikh has referred to the case In re: Succession Certificate of Mrs. Parveen Akhtar (deceased) (PLD 1993 Karachi 280) where a learned Single Judge of this Court, Nasir Aslam Zahid, J. (as his lordship then was), held, inter alia, that the Stamp Act is a fiscal statute which is strictly construed and any ambiguity arising therefrom is to be resolved in favour of the subject. It was further held that the power of attorney duly stamped in Pakistan before its execution abroad, would not require re- stamping in Pakistan after its receipt from abroad. I am of the considered view that since the power of attorney executed at Hong Kong was already stamped at the office of Consulate General of Pakistan at Hong Kong, it does not require further stamping in Pakistan.
21. It was submitted by Mr. Bashir Sheikh that the power of attorney was duly authenticated and stamped before the Vice-Consular of Pakistan Embassy at Hong Kong and pursuant to the same authority Vakalatnama was duly executed. He has relied upon cases Lt.-Col. (Retd.) P.G. Braganza v. The Border Area Allotment Committee and another (1984 CLC 1479 at 1484), Ismail and another v.
Mst. Razia Begum and 3 others (1981 SCMR 68), Wali Muhammad Khan v. Ishak Ali Khan and others (AIR 1931 Allahabad 507), Haji Muhammad Rafiq v. Shahenshah Jehan Begum (PLD 1987 Karachi 180) and Messrs Pakiand Scientific Production v. Messrs Pioneer Insurance Company Limited and another (PLD 1991 Karachi 414). These authorities are not relevant as they pertain to defects in the plaint which can be cured at a subsequent stage and for its non-compliance a party was held not to be non-suited. Here, the objection of Mr. Hamza I. Ali is that the power of attorney was not properly stamped as provided under section 18 of the Stamp Act, 1899. Be that as it may, such bar is not so fatal to the maintainability of these proceedings that the award could not be set aside.
Section 18 provides that every instrument excluding bill of exchange and promissory note if executed out of Pakistan unstamped can be stamped within three months after it has been received in Pakistan. The only consequence which follows is that if such document is not properly stamped then the Collector is entitled to recover duty and penalty. Recently, it was held by a Full Bench of Hon'ble Supreme Court in Sirbaland v. Allah Like and others (1996 SCMR 575) that unstamped or improperly stamped instruments were not invalid but subject to disabilities specified in section 35 of the Stamp Act, 1899. The purpose of Stamp Act is not to invalidate any instrument but to protect the public revenue. Further reliance is placed on the case Union Insurance Company of Pakistan Ltd. v. Hafiz Muhammad Siddique (PLD 1978 SC 279).
22. It was contended on behalf of respondents that another defect fatal to the instant proceedings is that the petition and Vakalatnama have been signed by one attorney while the power of attorney was executed by the Directors of the petitioner in favour of two attorneys. I have examined the contents of the power of attorney. Nowhere it is provided that the powers delegated through the said deed are to be executed jointly by two attorneys. In absence of such specific clause, the power of attorney could not be considered to be a joint power of attorney and, therefore, even if it is signed by one of the attorney, it will be sufficient compliance of the rules. All these facts lead me to hold that these objections are not tenable and are overruled.
23. It has been vehemently argued by Mr. Hamza I. Ali .In support of his last objection that. The award is not enforceable having been made in violation of law and being contrary to public policy of Pakistan. In this connection, it would be most relevant if para. 9 of the main objection is reproduced which reflects the gist of the attack of respondents on these proceedings: "9. From the foregoing facts it is patent that the entire arbitral procedure adopted in the above case is contrary to law of arbitration and basic principles of law and natural justice and also against public policy in inter alia following respects:
(i) The arbitrators were in consultations with each other and had pre-determined the dispute and its nature when one of them was acting for the petitioners and the other for Yasin; the arbitrators thus entered upon the reference with a bias;
(ii) the arbitrators acted as agents of the parties instead of acting as impartial Judges;
(iii) Mr. C.P. Bramble was never appointed an arbitrator by the respondents;
(iv) no notice of arbitration proceedings was ever given to the respondents who had no opportunity to present their case before the arbitrators;
(v) the arbitrators did not arbitrate in the proper sense of the term and the resultant award is. Ex parte. The Appeal Award based on the original illegal award is likewise illegal and unenforceable;
(vi) the arbitrators who were the Judges at the initial stage of arbitration appeared as representatives of the respective parties, Mr.. Bramble attacking his own award. The appeal award is therefore bad;
(vii) Mr. C.P. Bramble should have disagreed with Mr. Anderson and the arbitrators should have appointed an Umpire, as it is obvious that the arbitrators could not have agreed 40 a joint award which one of them, Mr. Bramble, was to attack before an Appeal Committee'
(viii) the arbitrators acted as Judges and parties in the same cause. If it is contended that the procedure adopted was according to the practice prevailing in England or before Liverpool Cotton Association Ltd. It is submitted that the practice even if proved is against principles of natural justice and of public policy in Pakistan and is bad in law."
24. To further elaborate his objection No,5, Mr. Hamza I. Ali argued that the last objection comprised of three parts, namely:--
(a) Irregular procedure adopted by the arbitrators shall be violative of the arbitration law;
(b) The Award being against public policy, could not be enforced in Pakistan;
(c) Misconduct of their arbitrator, Mr. C.P. Bramble.
' In further support of his contention, it was argued by Mr. Hamza I. Ali that there was no direct and proper appointment of Mr. C.P. Bramble from the respondents' side; no notice of hearing was given by the arbitrators to the present respondents; no minutes of hearings were maintained and that no representative of the parties was permitted to be present during the arbitration proceedings. It was further stressed that Mr. C.P. Bramble acted as agent of the party and not as an impartial Judge/arbitrator and that he approached the reference with predetermined ideas. In such background, it was argued that the award being bad in law and being against public policy of Pakistan, is not enforceable in view of subsection (3) of section 7 of the Act, 1937. Mr. Hamza I. Ali has placed reliance on paragraphs 578 and 590 of the Halsbury's Laws of England, 4th Edition, Volume II, pages 302 and 306. He has also referred to Rassel op Arbitration and the case Ram Lai Roshan & Co. v. B.C. Paul and Sons (P.) Ltd. (AIR 1960 Calcutta 547).
25. Mr. Bashir A. Sheikh, learned counsel for the petitioner has argued that the award in question is fully enforceable in Pakistan and that the same is not against the public policy or against any law of Pakistan. It was argued that no English law of arbitration or any provisions or rules and regulations of Liverpool Cotton Association were violated during arbitration proceedings. It is also denied that Mr. C.P. Bramble has committed any misconduct. , Mr. Bashir A. Sheikh has placed reliance on the case Marines Ltd. v. Aegus Shipping Co. Ltd. And 4 others (1987 CLC 1299) which is a decision of this Court given by Saleem Akhtar, J. (as his lordship then was). Relying on this case, it was argued that the grounds to challenge an award on the point of misconduct as envisaged in sections 30 and 33 of the Arbitration Act, 1940 are not available in a proceedings for enforcement of a foreign award under the provisions of Arbitration (Protocol and Convention) Act, 1937. In support of the contention that Mr. C.P. Bramble was duly appointed as arbitrator on behalf of respondent, reliance was placed on the case of Rally Brothers and Coney Ltd. v. Muhammad Amin Muhammad Bashir Ltd. (1987 CLC 83).
26. To some extent, I have discussed question of misconduct in reference to subsection (3) of section 7 of the Act, 1937 in paras. 7 to 9 above. Before proceeding further, it would be advantageous to reproduce paras. 578, 590 and 622 from the Halsbury's Laws of England, 4th Edition, Volume II:-- "578. Powers of arbitrator acting in non-judicial capacity.--- Where the reference is made to two arbitrators with power to appoint an umpire, and the umpire enters on the reference when the arbitrators disagree, the arbitrators are functus officio as arbitrators. In such circumstances it is then possible for the arbitrators to act in a non-judicial capacity. They may, for .Instance, give to the umpire evidence of fact (Bourgeois v. Weddell & Co. (1924) 1 KB 539) or expert opinion (Cerrito v.
North Eastern Timber Importers Ltd. (1952) 1 Lloyd's Rep. 330).
' There is also a modern practice in - some arbitrations where the parties expressly or impliedly agree, for the arbitrators in such circumstances to appear at the hearing before the umpire as advocates for the parties who appointed them (French Government v. Tsurushima Maru SS (Owners) (1921) 37 TLR 961, CA; Wessanen's Koninklijke Fabrieken NV v. Isaac Modiano Brother & Sons Ltd. (1960) 3 All ER 617). Though they may in such circumstances waive any irregularity in procedure under their implied authority (Wessanen's Koninklijke Fabrieken NV v. Isaac Modiano Brother & Sons Ltd. (1960) 3 All ER 617, (1960) 1 WLR 1243), they cannot by virtue of their changed functions alter from those conferred by the original terms of reference either their authority (Re Fuerst Bros. & Co. Ltd.
And Stephenson (1951) 1 Lloyd's Rep. 429, Rahcassi Shipping Co. SA. v. Blue Star Line Ltd. (1969) 1 QB 173, (1967) 3 All ER 301) or that of the umpire (Kawasaki Kisen Kaisha Ltd. v. Government of Ceyloan (1962) 1 Lloyd's Rep. 424 at 429)....
590. Times and places of meetings.- -It is the duty of arbitrator, when called upon to act pursuant to the agreement of reference, to appoint times and places of meeting and to give due, notice thereof to the parties. Where the reference is to more than one arbitrator, they should all concur in appointing such times and places and in doing all other acts in the course of the reference, unless the agreement for arbitration provides that the decision of the majority is to be binding (Ives v.
Medcalfe (1737) 1 Atk 63 at 64)
622. What constitutes misconduct.--- It is difficult to give an exhaustive definition of what may amount to misconduct on the part of an arbitrator or umpire....But even if the arbitrator fully complies with those terms, he will be guilty of misconduct if he makes an award which on grounds of public policy ought not to be enforced
(4) if there has been irregularity in the proceedings, as, for example, where the arbitrator failed to give the parties notice of the time and place of meeting...."
27. In England, it is now established practice that where two arbitrators give a dissenting award they become functus officio and are subsequently appointed by their parties to act before the umpire in support of their respective cases. This aspect was considered by a learned Single Judge of this Court, Nasir Aslam Zahid, J. (as his lordship then was) in the case of Fredrick E. Rose (Commodities) Ltd. London v. Munsoor Ali Tanning Co., Karachi (NLR 1981 UC 175 at 190-191). In that case, reference was made to the cases French Government v. Teuru Shima Maru ((1971) 37 TLR 961) and Wessanen's Koninklijke Fabrieken NV v. Isaac Modiano Brother & Sons Ltd. ((1960) 3 All ER 617). It was held that two principles emerge from these cases i,e, (1) that hearing before the umpire is necessary, and (2) that in commercial arbitration, a practice has been established in England that in case of disagreement between the parties' nominated arbitrators, they become functus officio as arbitrators and then represented their respective parties, who had nominated them, before the umpire. In the instant case, situation is different. Here, both the arbitrators gave a consent award where after appeal was filed before' the technical committee directly by the respondent and subsequently to filing of such appeal, Mr. C.P. Bramble was appointed. This fact was established during recording interrogatories at London.
28. Pursuant to the order of this Court, dated 20th August, 1978 whereby it was ordered that Mr. C.P.
Bramble be examined on commission, it appears from the perusal of evidence file that the matter of examining these witnesses was placed before the High Court of Justice, England, Queen's Bench Division where on 4th October, 1983, it was ordered by the Master in Chambers that both the witnesses namely, Mr. C.P. Bramble and Mr. J.A. Wilson Smith will be examined by the .District Registrar and accordingly the entire record was forwarded with the certificate of Senior Master of the Queen's Bench Division as provided under the Evidence (Proceedings in other jurisdiction) Act, 1975. During examination of Mr. C.P. Bramble, some 112 questions were put. It was a very exhaustive examination. Mr. Bramble has referred to several communications which he received from Pakistan and Hong Kong. He has also produced these communications before the examining authority/District Registrar. One such letter was exhibited and marked as C.P.B. 2 which is a letter, dated 23-8-1973 written by the Managing Director, Nichimen Co. (Pakistan) Ltd. To Mr. C.P. Bramble.
Through this letter, it was acknowledged that respondent has received two copies of the award in respect of some other dispute. However, reference was made to the present case and Mr. Bramble .Was asked to try his best that the dispute should remain between Nan Fung and Yasin and not between N.F. And Nichimen Pakistan or Hong Kong. Then there is another letter, dated 25th November, 1974 written by the respondent to the Detector General, Liverpool. Cotton Ion. England which is marked as J.W.S. 4 through which Mr. C.P. Bramble was appointed as representative of respondent in place of another arbitrator. Prior to that the respondent had filed appeal before the Technical Committee directly but subsequently appointed Mr. C.P. Bramble as their representative.
There are correspondence earlier to that date.
29. The Secretary, Liverpool Cotton Association (LCA) Mr. J.W. Smith was also examined who stated that he is Secretary to LCA since January, 1982, He told the examiner that no record of the arbitration proceedings except the award itself are kept on the filch of the Association. In was stated by him that the parties to an arbitration correspond directly with the arbitrators and any letters of appointment are directly sent to such arbitrators. The Secretary, LCA had produced the letter from Nichimen & Co. Pakistan Ltu. Appointing Mr. 'C.P, Bramble as their representative on appeal which was marked as JWS-4. He also admitted that respondent filed a direct appeal before the Technical Appeal Committee but subsequently engaged Mr. C.P. Bramble as their representative. He also admitted that the original as well as the award of the Technical Appeal Committee were against the respondent. The Secretary, LCA has produced several documents from his file which include communications between LCA and the respondent which also show that after the original award, the appeal was filed in person by the respondent raising several allegations against their own arbitrator, Mr. C.P. Bramble but subsequently they appointed him as their representative before the Technical Appeal Committee. This all shows that the respondents acquiesced in the acts of their arbitrator. If there had been a genuine grievance to the respondents in respect of the misconduct as allegedly committed by Mr. C.P. Bramble, their arbitrator, why would have then again appointed 'him as their representative before the Technical Committee?
This act of subsequently engaging the services of Mr. C.P. Bramble at the appeal stage is fatal to the objections of the respondent that Mr. C.P. Bramble was never appointed as one of the arbitrator. In Pakistan it may be misconduct for an arbitrator who after giving a unanimous/consent award to appear in another forum for the same party against the award given by him. In this regard, I would like to refer Rule 174, Chapter XII of Pakistan Legal Practitioners and Bar Councils Rules, 1976 which reads as follows: "174. An advocate should not accept employment as an advocate in any matter upon the merits of which he has previously acted in a judicial capacity.--- An advocate having once held public office or having been in the public employment, should not, after his retirement accept employment in connection with any matter which he has investigated or dealt with while in such office, nor employment except in support thereof."
30. In the instant case, the respondents want to take advantage of their own wrongs. Once they have re-engaged the services of Mr. C.P. Bramble, they cannot be permitted to take the plea of misconduct while seeking setting aside of the award and to deprive the petitioner of the fruits thereof. If such acts of the respondents are upheld and the instant award is not made rule of the Court, then, this will create a bad precedent and all such persons against whom a unanimous award is passed, would ask their arbitrators to act on their behalf in appellate proceedings, in order to get the award frustrated. Whatever the arbitrator's conduct may be, from the material produced before this Court, it is clear that the party, appointing such arbitrator acquired in the same. Now, such party is estopped from pleading the same before this Court. For this reason and from the aforesaid conduct of the respondent, I am not inclined to hold that Mr. C.P. Bramble committed any misconduct and that for this reason the award stands vitiated.
31. As a result of the above discussion, I am of the considered view that all the objections raised by the respondents are not sustainable and they are accordingly overruled. Result of such finding is that the Award given by the Technical Committee of L.C.A. Is made rule of the Court.