' This is an appeal against the order of the learned trial Court making an award in favour of the respondent for recovery of Rs, 46,074 from the appellant, a rule of the Court.
2. The respondent bad been given a contract by the appellant for construction of a bridge on Mile 2 of R. M. K. Road. Certain disputes having arisen between the parties, an application under section 20 of the Arbitration Act was submitted by the respondent in the civil Court on the 1st of November, 1962 for appointment of an arbitrator according to the arbitration clause in the Contract. On the 28th of September, 1963 a statement was made before the Court on behalf of the parties that the Superintending Engineer, Public Health Engineering be appointed as aif arbitrator. The Court, therefore, passed the following order:- "Superintending Engineer, Public Health Engineering, Lahore is appointed as Sole Arbitrator to adjudicate upon the matter in dispute between the parties in accordance with law."
2. The Arbitrator entered upon the reference and before he gave an award he was transferred from the post of Superintending Engineer to an equivalent post of Director (Survey), Public Health Engineering Department.. The respondent was advised at this stage that the authority of the Arbitrator stood terminated on his transfer from the post of Superintending Engineer in which capacity he was appointed Arbitrator to the post of Director (Survey). He, therefore, moved the Arbitrator to refrain from gaving an award. The Arbitrator made a reference to the learned trial Court by a Memo. Dated 6-4-1965. On the 10th of April, 1965 an application of the same character was submitted by the respondent before the Court alleging the termination of the authority of the Arbitrator. The appellant filed a reply to this application on the 15th of April, 1965. He contested it on the plea that the Arbitrator's authority notwithstanding this transfer continued. Ultimately on the 12th of June, 1965 the application dated 10th of April, 1965 was withdrawn by the respondent. The Arbitrator in these circumstances was allowed to go on with the arbitration.
3. An award accepting the claim of the respondent to the extent of Rs, 46,074 was given by the Arbitrator on the 29th of August, 1965. It was filed in Court on the Ist of September, 1965. The appellant submitted an application for setting aside the award on various grounds. The first objection which is important for the disposal of this appeal was as follows ;- "That the award has been announced by a person to whom the Court did not send the reference for arbitration between the parties."
' Some objections about the misconduct of the Arbitrator were also raised. These allegrtions having been denied, the following issues were framed by the learned trial Court :-
(1) Whether the award has been given by a competent Arbitrator ?
(2) Whether the Arbitrator has misconducted himself on the proceedings ?
(3) Whether the award is liable to be set aside for the reasons stated in pares. 5 to 7 of the objection petition 1
(4) Relief.
4. All the issues were decided against the appellant. It may be stated that so far as the issue of misconduct was concerned, it was decided against him, because no evidence was produced on that question. The learned trial Court made the award a rule of the Court on the 10th of March, 1966 and accordingly a decree followed.
5. The learned trial Court held on the first issue that the transfer of the Arbitrator to a different past did not involve termination of his authority. In any case it was found that the appellant was estopped from taking up this plea in view of his conduct in opposing the petition dated 4-10-1965 and in contending that the :arbitrator should continue to act as such.
6. The learned counsel for the appellant challenged tee finding only on Issue No, 1 and argued that since the Arbitrator had been appointed not in his name, but in his capacity as Superintending Engineer, Public Health Engineering, he ceased to enjoy the status of an Arbitrator, the moment he ceased to be an incumbent of that post. He further argued that in view of this initial illegality which went to the root of jurisdiction of the Arbitration, no question of esteppel arose against the appellant. The learned counsel for the respondent on the other hand argued that there was no provision in the Arbitration Act justifying the plea of the appellant. He further argued that if the interpretation of the appellant is allowed to prevail, it would involve nullification of section 5 of the Arbitration Act which vests except in case of agreement between the parties, the Court with the exclusive authority to allow revocation of reference to arbitration. He urged that if the effect of the transfer of an Arbitrator from one post to another be that the Arbitrator would cease to have any jurisdiction to continue the arbitration proceedings, View would amount to giving the power despite the provisions of section 5 of the arbitration Act, to the appellant to achieve the result of revocation of the Arbitrator's authority by simply transferring him to another post. He relied upon Jai Dayal Pearey Lai v, Chunni Oars Parsotam Dass and another (I). He also referred to Federation of Pakistan v. H. Chulam dfohy-ur-Din (2). The learned counsel for the respondent also urged that not only the opposition by the appellant of the respondent's application dated 10-4.1955 amounts to an estoppel against him, but the fact that the appellant bad been participating in the arbitration proceedings even later on would go to show that he had accepted this Arbitrator as the sole Arbitrator in the ease and is now estopped from challenging his authority.
7. The arguments of the learned counsel for the respondent have force. I have gone through the Arbitration Act. There is no provision in it dealing with similar circumstances as of the present case.
The question of revocation of the authority of the Arbitrator is dealt with in section 5 which provides that such an authority shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the Arbitration Agreement. There is no such agreement on the record from which any contrary intention may be deduced or discovered. Clearly, therefore, the case is covered by the contingency that the appointment of an Arbitrator is not revocable except with the leave of the Court. The only other section is section 11 which confers power of removing an Arbitrator on Court, The ground on which such removal can be ordered is that the Arbitrator fails to use all reasonable despatch in entering on and proceeding with the reference and making an award.
8. There are some provisions which deal with the question when does an Arbitrator cease to have any jurisdiction over the arbitration dispute.
(1) AIR 1951 All. 359 (2) PLD 1960 Lah. 677 ' Section 8(1)(b) deals with one such case. This clause will apply only if the Arbitrator appointed by mutual consent neglects or refuses to act, or is incapable of acting or dies. And the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy. Section 9 also deals with a similar situation where the appointment of arbitrator is not by mutual consent but each party appoints his own arbitrator. The grounds of termination of the Arbitrator's authority are identical with the grounds under section 8. The last section is section 12 which also allows the Court to fill up the vacancies where it removes an umpire who has not entered on the reference or one or more arbitrators (not being all the arbitrators). The other provisions of section 12 deal with the procedure.
It is clear that none of these sections deals with the question involved in the present case.
9. The learned counsel for the appellant relied upon that portion of section 5 which deals with there being an agreement to the contrary allowing revocation of the authority of an appointed arbitrator without the intervention of the Court. He argued that the statement made before the Court and the order following it contemplated in no uncertain terms, such an agreement. In the alternative he urged that they certainly contemplate that by ceasing to hold the post of the Superintending Engineer, the Arbitrator would cease automatically to have any authority.
10. I am of the view that this argument based upon the interpretation of the statement on the basis of which the appointment was made, is without any merit The agreement is only to the extent that a person who was a Superintending Engineer, Public Health Department at the time of making the statement, would decide the matter as an Arbitrator. It did not go farther, nor can it be interpreted to imply any disqualification on the part of such an Arbitrator after ceasing to enjoy the post and status which he was holding at the time of appointment. The statement is only to the effect that such a person who is holding the post at that precise point of time shall decide the matter. The question of revocation of the authority of this arbitrator would therefore be subject to the sanction of Vie Court under the provisions of section 5.
11 The case relied upon by the learned counsel for the respondent Dayal Pearey Lal v. Chunni Dass Parsotam Doss and another is applicable to the facts of the present case. In that case dispute between two members of an association was referred to arbitration according to the Rules and Bye-Laws of the Association. Each party was to appoint one arbitrator who was entered in the list of representatives of the members of the association. This appointment was made. One of the arbitrators having subsequently ceased to be a representative or a member of the association, the arbitration was carried on by the other Arbitrator as a sole arbitrator. It was held that since no steps were taken under section 5 to move the Court for revocation of the authority given to the outgoing arbitrator and none of the contingencies contemplated by section 9 being present in the case, he did not cease to have authority as an Arbitrator and, therefore, the award passed by the remaining Arbitrator was invalid. It was found that the subsequent disqualification of the Arbitrator had not the effect of taking a way from him the authority of an Arbitrator because the Arbitration Act makes no such provision. He was a persona designata and there was nothing in his appointment to show that he was to act as an Arbitrator for so long as he was a representative of a member of the association.
12. Another case which throws some light on this question is Federation of Pakistan v. H. Ghulam Mohy-ud-Din (1). In that case the Arbitrator could be appointed by the General Manager, Railways.
It so happened that the Arbitrator appointed by him became himself a General Manager during the pendency of the proceedings of Arbitration. Same objection was taken to the authority of the General Manager to proceed with the arbitration case. Although this point was not directly decided but it appears that the Court was of the view that the promotion of the Arbitrator to the post of General Manager did not involve any disqualification. However, the matter was decided specifically on the question of estoppel. After referring to a number of authorities, Ortcheson, J. Held that "having raised no objection either to the original appointment of the Arbitrator or to his continuing as Arbitrator after becoming Generai Manager, the party concerned had waived its objection to the incompetence of the Arbitrator to deal with the matter in dispute." This authority is in fact a complee answer to the argument of the learned counsel for the appellant on the question of estoppel. I, therefore, agree with the argument of the learned counsel for the respondent on these points. I may make reference to one other case relied upon by the learned counsel for the respondent. It is Muhammad Saghir Bhatti & Sons v Federation of Pakistan (2). In that case the appointment of an Arbitrator was cancelled without leave of the Court and a new appointment was made, No objection was raised by the parties before the new Arbitrator as to his competence to proceed with the case. It was held that the objection in regard to competence of the second Arbitrator and in regard to the revocation of the appointment of the first Arbitrator cannot be entertained. I may clarify that this was also a case in which the Government was a party and no objection to the competence of the Arbitrator was taken by the parties.
13. The proposition is well established that a party participating in the proceedings defore an arbitrator without any objection to his authority or competence to act as such and thus displaying an intention to be benefited by the award if it be made in his favour is estopped from raising an objection to the jurisdiction of the Arbitrator at later stage. The appellant's conduct clearly brings him under this rule. I find no merit in this appeal and dismiss it with costs.
(1) PLD 1960 Lab. 677 (2) PLD 1958 SC ;Pak.) 221