' In these arbitration proceedings the sole Arbitrator has filed his award setting the claims of parties in following terms:--- "I, therefore, hereby award that the respondents shall pay the claimant the aforesaid sum of Rs,8,581,007.57 (Rupees eight million, five hundred and eighty-one thousand and two and fifty- seven paisa) with interest thereon at 14% p.a. From the date hereof till payment or decree whichever is earlier. "
2. The case of plaintiff/claimant Syed Altaf Hussain, is that the defendants, namely Duty Free Shops (Pvt.) Limited invited tenders for construction of their warehouse in Islamabad and the plaintiff's tender was duly accepted and in pursuance thereof a contract was executed on 31-12-1990. While completing the required formalities of the contract the plaintiff executed performance bond and also furnished bank guarantee for mobilization advance. According to plaintiff, the site was handed over to him by the concerned Engineer Nes-Pak. On 6-1-1991. It is the grievance of plaintiff that the first installment of mobilization advance was not paid to him on time. However, the first and second installments were paid on 21-1-1991 and 30-6-1991 respectively after deducting an amount of 3% on account of income-tax, and in this manner Rs,5,91,578 was paid on each occasion. He alleged that the quantum of work was increased by at least 40%, therefore, he was entitled to revision of contract on that score as also on account of escalation in price and increase in value of contract.
According to him, the defendants extended the period of contract and ultimately took possession of the warehouse on 8-9-1993. He alleged that the 10th running bill which was submitted on 28-10- 1992 was not paid, although he completed the work precisely in accordance with the contract. The defendants not only denied payment to him of lawful dues but also set up a counterclaim and in fact they themselves committed breach of contract. He alleged that the defendants Engineer illegally deducted Rs,11,50,000 as engineer's supervision charges, Rs,90,000 for car facility, Rs,1,50,000 as damages and Rs,2,91,516 as de-escalation of steel (totalling Rs,16,81,515). An amount of Rs,12,85,535 was also deducted as retention money without justification. He further stated that due to unlawful conduct of defendants and delayed payments made by them he suffered losses to the tune of Rs,70,00,000. Lastly, he submitted the final bill but the defendants paid only Rs,99,69,134 leaving a balance of Rs,1,71,72,518. He, therefore, prayed for a decree in the sum of Rs,1,71,72,518 and interest at 20% per annum and costs.
3. The defendants, in their parawise comments, denied the claim of plaintiff and stated that both the instalments of mobilization advance were paid on time. According to them, due to slow progress of work, bad workmanship, (i,e, below standard specification) the plaintiff failed to complete the work within the specified period and also failed to remove the defects pin-pointed by the consultant in various punch lists which existed until last. They also denied that the quantum of work was increased by 40%. They stated that the amount due to plaintiff against the bills was paid but the 10th running bill submitted by plaintiff after scrutiny by the Consultant/Engineer, resulted in the negative as such no payment was made. They took the plea that as per terms and conditions of the contract the amounts claimed by plaintiff against the work done were to be certified by the Consultant M/s. Nes Pak but no completion certificate has been issued by the Consultants certifying completion of entire work as per terms and conditions stipulated in the contract documents. They asserted that the plaintiff suffered losses on account of his own incompetency regarding completion of the work within a period of 9 months as stipulated in the contract and, on the contrary, the defendants suffered a loss of Rs, 2,82,59,180 as on 31st March, 1998.
' The learned Arbitrator, on the pleadings of the parties, framed the following issues:--- "(1) What amount if any, are the respondents liable to pay the claimant for the work done by the claimant?
(2) Whether there was delay in payment of Moblisation advance and running bills? If so, what effect?
(3) Whether the respondents have committed breach of the contract?
(4) Whether the delay in completion of works was attributable to the claimants or the respondents?
(5) Whether the work done by the claimant was not according to contract?
(6) Whether the claimant and/or the respondents suffered any damage or loss? If so, what amount?
(7) What relief, if any, are the parties ard/or either of them entitled to?
2. After hearing the counsel for parties and on assessing the evidence on record the learned Arbitrator held that the plaintiff/claimant is entitled to receive, for work done, an amount of Rs, 8,581,002.57. He found that there was delay in payments of mobilization advance and running bills, the defendants committed breach of contract in so far as they delayed the payment, but the delay in completion of work was, however, not caused by delay in payment and that the delay in completion was attributable to the claimant/plaintiff. He also held that the plaintiff/claimant did not complete the work mentioned in the punch list. Regarding the loss or damage claim by parties he held that both parties failed to prove their claims in this respect. Finally, he rendered the award in the terms as aforesaid.
3. Both parties have filed their objections to the award in this Court, I have perused the same and also heard their Advocates.
4. Initially, the learned counsel referred to case-law on the legal aspects governing the scope of adjudication to be made by the Court after filing of the award. As to the scope of examining validity of award, both the learned counsel relied on Joint Venture KG/Rist v. Federation of Pakistan (PLD 1996 SC 108). It would be beneficial to quote the observations made on the relevant point which read as under:- "We may mention there that the Court while examining the validity of an award does not act as a Court of appeal. Therefore, a Court hearing the objection to the award cannot undertake reappraisal of evidence recorded by the arbitrator in order to discover the error or infirmity in the award. The error or infirmity in the award which rendered the award invalid must appear on the face of the award and should be discoverable by reading the award itself. Where reasons recorded by the arbitrator are challenged as perverse, the perversity in the reasoning has to be established with reference to the material considered by the arbitrator in the award. Keeping in view these legal principles, we asked the learned counsel for the Borrowers to point out the error in the above reasoning recorded by the arbitrator in support of his award but he was unable to point out any 'such infirmity or error committed by the learned arbitrator in interpreting the provisions of section 6.06 of the agreement, which rendered the award invalid."
5. In Pakistan v. OMR Export Consultants PLD 1990 SC 800, it was observed that under section 17 of the Arbitration Act it is the duty of the Court to examine whether there was any reason for modifying or setting aside the award notwithstanding that an affected party may have failed to file objections to the award on ' account of expiry of the limitation period, or the parties to the arbitration proceedings may be in collusion and because of that they may not file any objection to a collusive award. Their lordships held that in a fit case the Court may on his own under section 17 of the Arbitration Act modify or set aside the award if the facts and dictates of justice so demand.
6. Similarly, it was observed in Ghulam Abbas v. Trustees of Port of Karachi (PLD 1987 Karachi 393) that the general rule of law is that an award is final as to both fact and law but there is a rule that an error of law, if it appears on the face of the award, is a ground for setting it aside which is an exception to the general rule. Finally, it was held that the intentional disregard of the law would be such a misconduct on the part of arbitrator as would justify setting aside his award. Reference was made to Russel on the Arbitration.
7. In Ashfaq Ali Qureshi v. Municipal Corporation (1984 SCMR 597) the view taken was that it is the duty of the Court to give every reasonable intendment in favour of the award and lean towards upholding rather than vitiating the same.
8. In Jaffar Brothers Limited v. Islamic Republic of Pakistan PLD 1978 Karachi 585), cited by learned counsel for defendants, it was observed that it was duty of the arbitrator to inquire into the terms of the contract and decide such to legal and contractual rights of the parties and then award damages against the party who was found to have committed breach of contract; but since no decision was given by the arbitrator as regards the real question at issue it was held that the award of such claim was bad for misconduct of proceedings.
9. In Trustees of the Port of Karachi v. Iftikhar Brothers 1993 CLC 1491 it was held that an error, if any, in the award is to be pointed out from the award itself as the Court could not first look into material used by the arbitrator and then compare the same with the reasoning given in the award in order to discover the error in the award. Reliance in this regard was placed on AIR 1923 PC 66 and PLD 1965 SC 505.
10. In the case context it was held in GMK Enterprises v. Shaheen Builder 1999 CLC 1698 that the Court could interfere with the award if there was an error apparent on the face of it but in order to find such an error it was riot permissible to go through the evidence produced before the arbitrator.
11. In Chief Administrator, Auqaf v. Manzoor Fatima 1998 MLD 176 (Lahore), cited by learned counsel for defendant, the arbitrator was appointed by a Civil Judge during pendency of the suit and the award was made rule of the Court without framing issues and on appeal it was held that it was duty and obligation of the trial Court to frame issues under Order XIV, C.P.C. And since the mandatory provision of C.P.C. Has been violated the judgment of trial Court could not be sustained in the eyes of law.
12. Keeping in view the proposition of law enunciated in the foregoing authorities the validity of the award is to be carefully examined within a limited scope and from the contents of the award itself, without going deeply through the evidence recorded by the arbitrator or undertaking reappraisal thereof to discover any error or infirmity in the award. If it is intended to ascertain whether there is any error apparent on the face of record or that there is any intentional disregard of law every reasonable and lucid intendement be rendered, as far as plausible, in favors of the award rather than vitiating it.
13. One of the vital questions requiring attention with significance is whether the original stipulated period of contract was duly extended by the defendants. Admittedly, under the terms of the contract, the duration of contract was 9 months from 6th January to 5th October, 1991, but the work was not completed within this period. The plaintiff relying on the letter dated 18-8-1993 (Exh.C/44) advanced his plea on the basis of an admission made by respondent's witness and further took the plea that in any case the time was extended by implication since the plaintiff was allowed to continue to work. The learned Arbitrator fully adverted to this controversy and examined the different letters produced before him and observed that the letter Exh. C/44 was, in fact, not written by the Engineer and that none of the events, in which the time for completion could have been extended as specified in clause 44.1 of the general conditions of the contract, find mention in the said letter. Consequently, he reached the conclusion that the oral admission of respondent's witness would not amount to extension of time to complete the work.
14. Mr. Shahanshah Hussain, learned counsel for plaintiff was of the view that the learned Arbitrator was not justified in interpreting this letter in disregard of the admission made by the witness of defendants. The letter Exh. C/44 indicates that the Project Officer found fault with the plaintiffs work and referring to plaintiffs letter, dated 27-7-1993 pin point in details the discrepancies the work done by plaintiff describing each item separately and further he advised the plaintiff that these are such works as could be completed in a period of 12 days. The plaintiff was further asked to mobilize his resources and complete the building by 30-8-1993 so that they may be in a position to take over the building. In this letter, in fact, the faults have been highlighted and the learned Arbitrator after exercising due caution has opined that the admission made by the witness by itself did not amount to extension of time to complete the work when the requisite conditions were not satisfied.
The arbitrator being the forum of first instance to appraise the evidence his finding need not be upset simply on the basis of meritless formal objection. However, he has not rigidly closed the chapter but scrutinized the other parts of the claim, assuming for the sake of argument that the aforesaid letter amounted to extension of time. Instantly, this finding of fact of the learned Arbitrator is not open to challenge, particularly, when no gross error has been committed.
15. While examining the other components of the claim he has allowed escalation amount in respect of cement at the rate of Rs, 4,720 per month for two months and found the plaintiff entitled to Rs, 9,440. On account of fuel, an average has been worked out and the amounts of Rs, 15,763 and Rs, 2,532 (total Rs, 18,295) have been allowed. The escalation charges for labour being beyond the duration of the contract were rightly found inadmissible.
16. The main issue then turns to be the claim of plaintiff against actual work done for which he was not paid, the details whereof were mentioned in Annexure 'M' to the statement of claim. Learned Arbitrator has pointed out that the particulars and figures contained in this statement have not been challenged. At the most, it is objected that no work order or certificate from Engineer was produced. This point has been dilated upon extensively and the objection has been repelled on the ground that, mere absence of written instructions or failure/refusal by the Engineer to issue a certificate shall not have effect to negate the claim. Obviously, when the factual aspects of the claim in respect of work done were not controverted the plea on the basis of lack of Engineer's certificate should not deprive the plaintiff of the amount claimed on account of work actually done by him. Under clause 60.2 of the conditions, the Engineer was bound to issue certificate within 28 days of receiving such statement submitted by the contractor subject to sub-clauses (a) and (b) thereof. Indeed, in such circumstances withholding of certificate by the Engineer was to be explained by the defendants and in absence of a plausible version demonstrating a justifiable explanation the learned Arbitrator was correct in concluding that the absence of written instructions or failure/refusal by the Engineer to issue a certificate shall not have the effect of negating the claim. In view of the legal position discussed earlier the finding of Arbitrator need not be interfered in absence of a flaw or error in the award itself. I find no reason to upset the finding of the learned Arbitrator.
17. Learned Arbitrator has also furnished reasons for deduction in respect of Engineers supervision charges and the amount claimed as cost of repair of a boundary wall built by some other contractor but damaged by the plaintiff/claimant. Besides, the plaintiff has failed to justify his objection against deduction of Rs, 2,91,516 on account of deescalation of steel. The learned Arbitrator was, therefore, right in rendering his finding on this point. He has comprehensively worked out and allowed the claim, laying down the relevant data in following terms:- "The result of the above discussion is that the claimant is entitled to receive, for work done, an amount of Rs, 8,581,002.57 (Rupees eight million, five hundred and eighty one thousand and two and fifty-seven paisa) as follows:--- ' As claimed in the Final Rs,20,141,652.57 Bill (Annexure 'M' to statement of claim) which is inclusive of all the abovementioned deductions/ retention money. {{TABLE}} Less Rs,1,150,000 Engineer's, Supervision Fee Damages Rs,150,000 Wall.
Desca-lation of Steel.
Rs,291,616 Rs,1,591,516.000 Rs,18,550,136.50 Less paid by respondents Rs,9,969,134.00 Balance Rs,8,581,002.57 {{TABLE}}
18. Learned counsel for respondents, however, argued that the learned Arbitrator has involved himself by rendering his own opinion otherwise such opinion could only be given by an expert on all matters including verification of work. He, therefore, contended that the learned Arbitrator transgressed his powers. This contention does not carry much force as the particulars and figures contained in Annexure 'M' cannot be challenged. The argument that it was a, self-prepared statement bill would carry some weight only when it was controverted by them at the appropriate stage. There is no defect or error apparent on the face of award the claim has rightly been allowed and the finding is maintained.
19. The letters produced before the learned Arbitrator were examined by him and he did not find any proof imposing restriction of cash flow in consequence of delay in payments. However, he was fully justified in pointing out that delay in payments related to delay of 21 months which was insignificant as the completion period was only 9 months. He has examined the running bills also and given the detail before arriving at such conclusion. The award itself does not indicate any mis- appreciation of the evidence and does not call for interference with respect to the findings on Issues Nos. 2, 3 and 4.
20. As regards the controversy in Issue No, 5 it has been pointed out that the plaintiff/claimant was confronted during his cross-examination with letter, dated 16-2-1994 which he did not contradict.
The last para of the letter (Exh. D/12) shows that the plaintiff was informed that the plaintiff/claimant failed to complete the work as per the latest time schedule and that he has completely abandoned the site and there is absolutely no activity for completing the works and removal of defects. Since the plaintiff/claimant did not contradict this letter learned Arbitrator was correct in assessing the matter on the balance of probabilities. The finding of learned Arbitrator is, therefore, not open to question. On Issue No, 6 he has in the same manner examined exhaustively the evidence produced before him in the light of conditions of contract and arrived at the conclusion that both parties failed to prove any loss or damage allegedly suffered by them.
21. As a result of foregoing discussion, I find no substance in the objections raised by the parties which are overruled. Consequently, the award is made rule of the Court.
Award made rule of Court.