1. ' This is an application under section 5 of the Arbitration Act, whereby the applicant seeks to revoke the authority of the arbitrators and the umpire in an arbitration matter which is proceeding before the two arbitrators namely Mr. Justice (Retd.) G.H. Malik and Mr. Justice (Retd.) Haziq-ul:Khairi and the umpire is Mr. Justice (Retd.) Muhammad Haleem.
2. ' Brief facts leading to the filing of this application are that the applicant entered into a power purchase agreement (PPA), dated 5-12-1994 with the respondent No,1 for purposes of development, establishment and operation of an electrical power generating plant with a capacity of generating and operating a 24 M.W. Power generating facility at Karachi by using furnace oil purchased from the applicant. Under this agreement the applicant was obliged to provide the site for the project.
3. Such site was surveyed and a sub-lease in respect of this land was executed by the applicant in favour of respondent No,1 on 26-5-1996 and was duly registered. It appears that the applicant also had equity participation in the respondent No,1 company to the extent of 5% of the total issued shares of respondent No,1. Thereafter, it seems that the respondent No,1 went about the arrangement for finances for the project and managed to obtain commitments from various financial institutions. They then proceeded to open Letter of Credit for the supply of equipments and machinery for the project to be shipped to Karachi and to be delivered by April, 1997. However, when the construction drawings arrived and the respondent No,1 requested the applicant to allow them access to the site, they refused to do so. When negotiations did not resolve the differences between the parties, the respondent No,1 served a legal notice, dated 8-4-1997 on the applicant.
4. There was a delayed response to this notice from the applicant but by no standard it was positive.
5. Respondent No,1, therefore, invoked the arbitration clause in the agreement and appointed Mr. Justice (Retd.) G.H. Malik as their arbitrator on 1-12-1997. The applicant appointed first Mr. Mehmood Ali Ahmed as their arbitrator on 24-12-1997 and thereafter, replaced him by Mr. Justice (Retd.)
6. Haziqul Khaki on 2-9-1998. Mr. Justice (Retd.) Muhammad Haleem was appointed as an umpire in these arbitration proceedings.
7. ' The applicant much after filing this application on 9-1-1999, filed an application under Order 6, Rule 17, C.P.C. Being C.M.A. No,223 of 1999 whereby they sought to amend the main application under section 5 of Arbitration Act filed by them earlier. Though this application has not been heard and has not been decided, I have nevertheless taken contents of this application into consideration with the consent of the respondents before arrival at the conclusion that follow herein.
8. ' The main contention of the learned counsel for the applicant is that this power project agreement was entered into because of political influence of Mr. Asif Ali Zardari during the tenure of the previous Government. They in fact claim that there was no need for such project and it was especially created to benefit certain individuals by the said Mr. Zardari. They further state that after the departure of the previous Government the new Government suspecting mala fide motives in awarding of this contract to the plaintiff instituted an enquiry into the circumstances which led to the signing of the said agreement. This enquiry was headed by Major-General (Retd.) Saeed Ahmed Wahla, who submitted his Enquiry Report on 26-6-1998. According to this report, it was found that the agreement between the respondent No,1 and the applicant was signed due to political pressure exerted at the highest level in the previous Government. It is alleged that Board of Enquiry also found evidence of corruption in the signing of this agreement. The Enquiry Report, therefore, recommended the cancellation of this agreement and based on that the agreement was cancelled by respondent No,1' s letter, dated 22-7-1998.
9. ' The learned counsel for the applicant contends that subsequent to the cancellation of the agreement he filed an application before the learned arbitrators for stay of proceedings till such time that he obtains the necessary order from the High Court. According to him, this application was rejected by the arbitrators and thereafter their attitude towards the respondent No,1 changed dramatically and they raced through the arbitration. The applicant, therefore, filed an application before this Court being C.M.A. No,8031 of 1998 under section 41 of the Arbitration Act seeking to stay the arbitration proceedings till the decision on the main application. This application came up before me for hearing on 17-12-1998 when I directed that the arbitration ought to continue but the award will not be passed till the disposal of the main application.
10. ' The learned counsel for the applicant contends that since there is no agreement in existence ab initio there is no question of continuing with the arbitration. Besides, he also contends that the arbitrators-have misconducted themselves inasmuch as impatience marks their attitude towards the applicant. He also states that the fees demanded by his arbitrator is exorbitant and that too he regards to be misconduct of his arbitrator. Before proceeding further in the matter, it may be appropriate to reproduce. Section 5 of the Arbitration Act:-- "5. Authority of appointed arbitrator or umpire irrevocable except by leave of Court.---The authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the arbitration agreement."
11. ' A plain reading of the above provisions of law would show that it starts with a definite negative statement to the effect that the authority of an arbitrator shall not be revoked. It goes on to say that it can be only revoked with the leave of the Court. Consequently, it would appear that the authority of an arbitrator must not be revoked unless there are sufficient grounds for doing so and then too it can only be revoked by the leave of the Court. It is now settled that the principles applicable to an application under . Section 5 of the Arbitration Act are the same as those that are applicable under section 34 of the Arbitration Act. That is to say that the Court has the jurisdiction to grant leave on good cause being shown and that it is a discretionary relief. As to what is a good cause is something which must receive very anxious consideration of the Court when examining the application under section 5 of the Arbitration Act because removal of an arbitrator is a serious matter and it must not be resorted to on flimsy or ephemeral grounds.
12. ' Now looking at grounds made out by the applicant, the first ground is that since the agreement itself has been terminated there is no question of continuing with the arbitration. It is an admitted position that the agreement was terminated much after the arbitration commenced and in fact the arbitration is about to come to an end. It is now well-settled that the arbitration agreement survives the termination of the agreement. The fact remains that the respondents contend that there was a breach of contract at a time when the contract was still in existence. Consequently, I do not see how the applicant can escape the effects of such breach by retrospectively cancelling the said agreement. What has come to pass cannot be reversed. The cancellation of the agreement may, in so far as the applicant is concerned, serve to mitigate the effects of breach of contract but it cannot retrospectively obliterate the breach of it. In my view the cause of action for arbitration would still continue since as stated earlier the arbitration agreement would survive even if the agreement itself is terminated. As far as the mitigation of the effects of the breach are concerned this is a point which could certainly be urged before the arbitrators but applicants' remedy is not the revocation of the authority of the arbitrators. The other grounds raised by the applicant relate to the alleged misconduct of the arbitrators and in this regard he refers to firstly the attitude of the arbitrators and secondly the exorbitant fees of their own arbitrator. As far as the attitude of the arbitrators is concerned, I have perused the diary sheet of the arbitrators and the various applications filed by the respondent No,1 before the arbitrators and I find from these that there was a definite attempt by the respondent No,1 to unnecessarily delay the arbitration proceedings which .Is bound to make the arbitrators or for that matter any one also in their place, irritable. Legally the arbitrators were absolutely correct in dismissing the application for stay of the arbitration proceedings pending the hearing of the main application in the Court because the arbitration could only be stopped either by mutual agreement or by an injunction being issued by this Court. Since neither of this had happened the arbitrators could not possibly stop the arbitration proceedings midway. In so far as the fees of the arbitrator being exorbitant is concerned, the records clearly show that the applicants' arbitrator had informed the applicants before entering the reference what his fees would be and there is nothing on record to show that the respondent No,1 had disagreed with the fees demanded by the arbitrator. In any case even if it is accepted that the fees demanded by the arbitrator of applicant were exorbitant it would not amount to misconduct by the arbitrator as the arbitrators fix their own fees and it is . For the parties appointing them to decide whether they are willing to pay these fees or not. If they have any particular grievance with regard to the fees the remedy of the applicant lies in initiating proceedings under section 38 of the Arbitration Act and not to seek revocation of the authority of the arbitrator. The law in this regard is clear that the Court will interfere in the question of fees of the arbitrator only if these fees are extortionate. In this case there is no evidence to the effect that such is the case. I, therefore, find no merit in this Judicial Miscellaneous Application and iris accordingly dismissed.