' This is first appeal under section 39 of the Arbitration Act (X of 1940) directed against the order of Civil Judge, Multan dated 11-11-1993 whereby lie rejected the objections made against the award, dated 17-2-1993 by the present petitioner and made the same a rule of the Court. The prayer precisely being that the application under section 8 of the Arbitration At should be returned to the respondent for presenting it before a competent Court at Karachi or in the alternate the award submitted by the arbitrator be declared as time-barred and objection petition submitted by the appellant accepted holding it to be within time.
2.. The facts giving rise to the appeal in brief are that on 17-6-1990, the respondent No,1 Messrs Fazal Cotton Industry, Multan a partnership firm filed an application before the Senior Civil Judge, Multan under section 8 of the Arbitration Act (X) of 1940 (hereinafter referred to as the Act). In the application, it was inter alia stated that the petitioner was engaged in the dealing of raw cotton (phuti) cotton seed, cotton bales and machinery etc. In the year 1988-89, the applicant firm got an insurance Policy from Mis. National Security Insurance Company Ltd., present respondent No,2 for Rs,5,00,000 while the second insurance poll) was obtained from the present petitioner Messrs Standard Insurance Company Limited, which was arrayed as respondent No,2 in the application.
Further that on 30-6-1989; a fire broke out in the factory as a result of which 521 bales of ginned cotton were gutted. The applicant after taking necessary formalities including report to the concerned police station also informed both the respondents Insurance Companies. Subsequently at the request of the applicant; the Insurance Companies appointed a joint surveyor who estimated the net loss of the applicant as Rs, 16,00,000. On submission of the Survey Report, both the respondents, however, avoided the payment of the loss assessed. Accordingly, the applicant by invoking the Arbitration Clause of the Insurance Policies proposed the name of one Muhammad Bashir, Chairman Pakistan Cotton Ginners Association Pakistan as an arbitrator The arbitrator nominated by the applicant served the respondent company with notice but both of them did not agree to join the arbitration proceedings. The petitioner further submitted that having fufilled clause 13 of the conditions of the Insurance Policies, it was constrained to make the aforesaid application under section 8 of the Act.
3. The present petitioner resisted the application by raising a number of legal and factual objections to the maintainability of the petition. The trial Court, however, proceeded to accept the application under section 8 of the Act through an order, dated 20-12-1990. The present petitioner assailed that order by way of a revision petition which was rejected by this Court on 7-7-1991 and the order making reference to arbitrator was maintained. Thereafter, a retired Hon'ble Chief Justice of this Court was appointed as an arbitrator by the consent of the parties. On his refusal to enter upon the reference on the ground that one of the parties were known to his lordship, the parties failed to agree on his substitute. However, they left the matter to the Court that it may appoint any retired Judge of the Lahore High Court as arbitrator. On this Mr. Justice (Rtd.) M.H. Sindhar was appointed as a sole arbitrator. The learned arbitrator submitted his award on 17-2-1993 and filed the same in the Court on the same day with a notice to the parties. The present petitioner submitted its objections on 1-4-1993 while the present respondent No,1 replied these objections on 4-6-1993.
4. After hearing the parties, the learned trial Court took up each and every objection made against the award by the present petitioner and finally by way of the impugned order proceeded to reject them. Earlier the objection against the territorial jurisdiction of the Court; that the award was barred by time; that the objecting petitioner was not allowed adequate opportunity of being heard; that the Court was required to frame issues on the objections made against the award and also to allow the parties to lead evidence were taken up for discussion. Also the alleged misconduct on the part of the arbitrator was found to be vague. Accordingly, the award was made rule of the Court.
5. Parties have been heard.
6. The learned counsel for the petitioner, inter alia, contended that the original Court had no jurisdiction to have cognizance of the matter by virtue of clause 21 of the insurance document, that the trial Court lost sight of Article 103 of Qanun-e-Shahadat Order, 1984; that in filing of an application under section 8 of. The Arbitration Act, service of notice being a condition precedent, the application was otherwise not maintainable; that the arbitrator entered into reference on 6-3- 1992 and made the impugned order on 17-2-1993 and the intervening extensions in time granted to him for making of award on 16-7-1992, 18-11-1992, 10-1-1993 and 15-2-1993 were not in accordance with law, and therefore, the award was patently barred by time and in contravention of section 3 read with rule 3 of Schedule .1 of the Arbitration Act; that no notice of the filing of the award as required under section 14(2) of the Act was ever made, and therefore, the order of the trial Court finding the objection to be barred by time is not sustainable by law; that material preposition of law and facts having been affirmed by the appellant and denied by the respondents, the trial Court was obliged under law to frame issues and to direct production of evidence from both sides; that the impugned order was passed by the trial Court in violation of the maxim "audi alteram partem"; that the order passed by this Court on 7-7-1991 on the revision against acceptance of application under section 8 of the Act was no bar to entertain the question of jurisdiction which could otherwise be taken at any level of the proceedings; that extensions in time in making of award were given to the arbitrator without application of mind; that M/s Habib Bank Limited being the financier in business and a mortgagee of the alleged goods lost in fire was a necessary party and no effective arbitration proceedings could be taken in its absence; that the findings by Arbitrator on issues Nos.1 and 2 was beyond the scope and domain of his award as an arbitrator; that the application under section 8 was not brought within the stipulated time before the proper form, and therefore, the whole claim of the respondent had become time-barred; that the Court itself directed the present petitioner to file objections against the award but subsequently wrongly held them to have not been filed in time. In Court; that in absence of a specific prayer in the application under section 8 of the Act to make the award as a rule of the Court, the trial Court was not competent to award the judgment and decree and that the award being beyond terms a reference was otherwise not acceptable in the facts and circumstances of the case. In support of the aforesaid submission, the learned counsel for the appellant places reliance upon 1981 SCMR 129 Re: Haji Soomar Hajji Hajjan v. Muhammad Amin Muhammad Bashir, PLD 1994 Karachi 127 Re: Messrs Corporation Ltd. v. Government of Pakistan through Director-General of Defence, Ministry of Defence, Karachi, 1982 SCMR 494 Re: Mst. Safia Bibi v. Mst. Aisha Bibi, 1985 SCMR 597 Re: Ashfaq Ali Qureshi v. Municipal Corporation, Multan, 1985 CLC 1170, Province of West Pakistan and others v.
Mian Abdul Hamid and Co., 1991 CLC 258 Re: Akhtar Trading Co. v. Food Department and others, 1991 CLC 1081 Re: Messrs Vaseem Construction Co. v. Province of Sindh through Secretary to Government of Sindh, Communication and Works Department, Karachi, and 4 others, 1987 SCMR 1904 Re: Province of Punjab through Collector D.G. Khan and others v. Messrs Ghulam Mustafa Khan and others, PLD 1990 SC 359 Re: WAPDA and another v. Messrs Khanzada Muhammad Abdul Haque Khan Khattak & Company, 1988 SCMR 723 Re: Chief Engineer, Building Department v. Messrs Pakistan National. Construction and 1993 CLC 1491 Re: Trustees of the Port of Karachi v. Messrs Iftikhar Brothers.
7. The learned counsel for the respondent No,1, however, supports the impugned order. It is submitted as a fact that the other Insurance Company has since accepted the award and even made payment, the present petitioner is using all possible delaying tactics to avoid a legal responsibility. The finding of the trial Court with regard to the jurisdiction, the extension in time to make the award with the consent of the parties and the fact that the appellant failed to challenge the award on any mentionable ground, the learned counsel relies upon 1992 SCMR 1174 Re: Messrs Kadir Motors (Regd.) Rawalpindi v. Messrs National Motors Ltd., Karachi and 3 others, PLD 1971 Quetta 30 Re: Sh. Din Muhammad v. Jan Muhammad and another, NLR 1990 Civil 132 Re: D.G.Khan Cement Company Limited v. Haydari Construction Company Limited, PLD 1990 SC 800 Re: Pakistan through General Manager Pakistan Railway v. Messrs Q.M R. Expert Consultants and 1998 SCMR 1696 Re: Mst. Jannat Bibi v. Sher Muhammad and others. Lastly it is submitted that the petitioner having consented to the nomination of the sole arbitrator and subsequently participated in the arbitration proceedings could not be heard in complaint on matters of insignificance. Particularly in view of the fact that the award rendered by the learned arbitrator was not assailed on any legally acceptable basis or misconduct qua the proceedings of the award,
8. I will agree. The learned counsel for the respondent No 1 is correct in saying that the petitioner never entertained the claim of the loss with good grace nor it had ever accepted the legal proceedings. The fact that the other insurance company had accepted the award and even made the payment determined thereby is certainly a fact which merits notice. The objection raised against the filing of the application under section 8 of the Act including the jurisdiction of civil Court at Multan has also not impressed me. Particularly when the petitioner had earlier filed before this Court in revisional jurisdiction. It is correct that the parties to an agreement in certain situations have a choice of forum. However, the ouster of jurisdiction of a competent Court has always been seen by a jealous eye. The learned trial Court rejected the objection inter alia on the ground that this Court on 3-3-1991 had maintained its order, dated 20-12-1990 directing reference of matter to the arbitrator. Further, it was noted that the present appellant not only agreed to the nomination of an arbitrator at least at two occasions but also subsequently' appeared before the second arbitrator and participated the proceedings. Therefore, the learned trial Court is correct in maintaining that clause 21 of the insurance agreement between the parties providing for entertainment of claim and initiation of legal proceedings at Karachi had been rendered ineffective by the subsequent conduct of the parties. The ouster clause between two private parties must in such situation given way to the general law with regard to the jurisdiction. It is not the case of the appellant that the cause of action wholly or in part did not arise or accrue within the jurisdiction of the civil Court at Multan. Admittedly not only the agreement was executed at Multan but also the loss due to fire also occasioned there. The learned trial Court also rightly noted that all objections against a reference to the arbitrator having been rejected by this Court, the objection against the territorial jurisdiction of the civil Court at Multan was no more available to the petitioner. The ouster of jurisdiction is an exception while the territorial jurisdiction of a Court under the law is a rule which may revitalize itself by subsequent conduct of the parties. The ouster of jurisdiction is available to parties against the general law of the land and in conditional with certain situations recognized at law. An (mister clause is neither permanent nor universal. It can change with the Changing situation and relations between the 'parties. And if no provision is made in the agreement for the changed situation then their subsequent conduct can very well be taken to be indicative of their shifting in the stand or reversal to the general law.
9. The objection that the award in question was time-barred is also not well-based. Except for the first, all subsequent extensions as noted earlier were allowed with the consent of the parties and on the last occasion when the award was actually submitted the date stood extended much beyond the date of its submission. As noted earlier, the appointment of arbitrator was made with the consent of the present appellant. It participated in the proceedings and also agreed to the extension allowed at the request of the arbitrator from time to time. Therefore, this objection too like most of the rest appears to have been made only for the sake of objection.
10. The contention that the award was beyond the terms and reference of arbitrator is too vague to be ruled upon, The appellant neither in the objection petition nor the learned counsel for the appellant at the time of arguments, has crystalized the objection. The area, the field or the particular subject was not identified wherein allegedly the arbitrator crossed the limits of reference.
11. Other similar objections with regard to reference of the matter for arbitration are also impertinent after the order in reference had been upheld by this Court. The contention that the arbitrator did not allow adequate opportunity to the petitioner is again vague and shows absence of a specific challenge to a specific action of the arbitrator taken during the proceedings. The learned trial Court was right in holding that no complaint in this regard was either made before the arbitrator himself or was brought to the notice of the Court during the pendency of the arbitration proceedings. The objection even otherwise smacks of mala fide. The arbitrator is a retired Judge of this Court with most enviable record as regards competency and integrity. Alleging lack of opportunity or violation of the maxim "audi alterm partem" against him hardly sounds acceptable.
Particularly as noted earlier, when no specific challenge was thrown to any step taken in the proceedings by him. The assertion of miscarriage of justice similarly is as impertinent as the earlier contention qua lack of proper opportunity.
12. It will be noted that in the objections made against the award all stress was placed upon issues which were neither determined by the arbitrator nor were part of the award. As usual the present appellant did not feel happy about the exercise of jurisdiction by civil Court at Multan. The rest of the objections with regard to the conduct of the arbitration proceedings and the award were in fact a mere formality and a half-hearted attempt to raise an issue out of nothing.
13. The contention that the objections were filed well within time on 1-4-1993 is also devoided of any force. The record of the arbitration proceedings clearly indicates that on 17-2-1993 the counsel for the parties not only noted the announcement of award but also the fact that it had been filed in the Court on the same day. An attempt has been made on the part of the appellant to show that in spite of the aforesaid notice, the Court was required to issue a fresh and independent notice under section 14(2) of the Arbitration Act informing the parties of the filing of the award. However, this aspect of the contention does not find support either from the provisions of the law or from any of the cases referred to and relied upon by the appellant. The three subsections of section 14 of the Act contemplate three different situations which are mutually exclusive. Also the fact that by way of an interim order, the Court had once directed the appellant to file objections till a particular date will not by itself extend the statutory period of 30 days for filing of the objections. According to the order sheet entry, dated 2-3-1993 the award was received in the Court on 17-2-1994 which was directed to be put up with the objection file. When it was done the parties requested for time to file objections which was allowed and the next date of hearing was fixed as 20-3-1993. On 20-3-1993, the present appellant sought further time on the ground that its counsel had in the meanwhile died. The prayer was allowed and the objections were filed on 1-4-1993. However, the award having been filed on 17-2-1993 with proper notice to the present appellant, there hardly appears any good ground for its default or failure to meet the statutory period of 30 days. As the Court is not competent to extend the prescribed limitation, none of its orders could directly or indirectly be construed to have granted extension in time or filing of the award.
14. In view of these facts supported by the record, no possible exception to the finding of the trial Court that the objections made against the award were barred by time can be taken.
15. The chain of other objections that the trial Court lost sight of Article 103 of Qanun-e-Shahadat Order, 1984, that the petitioner failed to fulfil the condition precedent for initiating the arbitration proceedings, also do not appear convincing. None of the aforesaid objections stated in the memo.
Of appeal was seriously pressed at the time of arguments. The submissions with regard to framing of issues is not acceptable for two reasons. Firstly once the Court found the objections to have been filed beyond limitation, there was no question of framing of issues on factual controversies. It is also a fact that except for the objection to the jurisdiction of the civil Court at Multan which was otherwise not relevant as far the award was concerned, no mentionable preposition of fact or of law was affirmed by the present appellant which could give rise to an issue. As noted earlier, neither the alleged misconduct qua the proceedings or the award nor lack of proper opportunity having ever been alleged in clear terms there could hardly be any justification for framing of issues in the facts of the case.
16. Therefore, the order of the trial Court, dated 11-11-1993 does not warrant interference on any count whatsoever.
Rejected.