' Through this common judgment, I intend to decide, three suits, between the same parties, involving similar questions of facts and law.
2. Plaintiff a proprietary concern, engaged in the business of Civil Engineer and Contractors was awarded following three contracts by the defendant Port Qasim Authority containing arbitration agreement, each subject-matter of separate suit proposed to be decided herein.
(i) Construction of 36" Dai meter (10-MGD) gravity main from Total phari to PQA water words awarded in October 1993: ' Contract Price Rs,113,824,087
(ii) Contraction of 30" Dai meter rising main from booster Pumps Station to Break Pressure Tank awarded in October 1993.
' Contract Price Rs,68, 005, 140
(iii) Construction of RCC (20 MGDO gravity conduit awarded in February, 1995.
' Contract Price Rs,139,900,898
3. It is alleged by the plaintiff, that since, the award of the contract, defendant was at breach, plaintiff has outlined acts of omission and commission on the part of defendant in para.4 of the plaint and as a consequence claimed amount mentioned separately against each contracts referred in para above, detail breakup is also given in para.8 of the plaint.
4. Earlier also the plaintiff invoked arbitration, through intervention of Court by filing Suits Nos. 1033 of 1998, 1035 of 1998 and 334 of 1999 in respect of each contract separately, which suits were allowed vide order, dated 31-3-1999 and disputes therein were referred to the Arbitration.
5. It is claimed that disputes as are sought to be referred to arbitration, through instant proceedings, were not ripe for reference to arbitration when earlier, this Court referred the matter to arbitration. It is averred that the dispute that is urged in instant proceedings had arisen four months after (i.e, Annexure 'C' to the plaint) the earlier reference by this Court, dated 31-31999.
According to Mr. Bilal learned counsel for the plaintiff, dispute or difference under the agreement is subjected to arbitration, only after following the sequential requirement provided for under the agreement. According to him as a first step under clause 67.1 of the agreement claim is required to be submitted to the Engineer, which was done vide letter, dated 29-7-1999 and unless the grievance is redressed within 84 days thereof by the engineer or on failure of engineer to resolve the dispute, intention to commence arbitration in terms of clause 67.2 is to be shown, which was done vide letter, dated 25-11-1999, offer to appoint same arbitrators as were appointed by this Court in earlier proceedings was declined by the defendant. Resultantly instant proceedings were initiated.
6. Mr. Arif Khan learned counsel for the defendant seriously resisted the application. His objections may be summarized as follows.
(i) Plaintiff abandoned the work and repudiated the contract on 22-8199g.
(ii) Dispute urged in paras.6 and 7 of the plaint as per Annexure 'A' relates to alleged acts of omission and commission prior to the date of 1st reference by this Court, dated 31-3-1999.
(iii) In presence of earlier reference subsequent reference is hit by principles of res judicata and Order 2, Rule 2, C.P.C.
7. In support of his contentions he has relied upon (i) Land Acquisition Collector v. Aurangzeb Khan (PLD 1993 SC 197), (2) Allah Baksh v. Abdul Waheed PLD 1996 'Kar.458 and (3) Akbar Ali Malik v.
Chairman A.K. M.I.D.C. (1999 MLD 236).
8. Exercising right of rebuttal, Mr. Khawaja Bilal, learned counsel for the plaintiff submitted that;
(i) Neither time frame is fixed nor any embargo is imposed under the agreement for raising as many number of disputes as may arise from time to time.
(ii) Successive arbitration is permissible under the Arbitration Act, neither the principle of res judicata, nor provisions of Order 2, Rule 2, C.P.C. Are attracted in Arbitration proceedings.
9. In support of his contentions he draws support from.
(a) Bal Mukund Ruia v. Gopirans Bhotica (AIR 1920 Cal. 808);
(b) Seth Kerorimall v. Union of India (AIR 1964 Cal. 545);
(c) Messrs Al-Karma New Delhi v. Dehli Development Authority (AIR 1981 Delhi 230);
(d) Shah Construction Co. Ltd. v. Municipal Corporation of Delhi (AIR 1985 Delhi 358) and
(e) Purser & Co (Hillingdon) Ltd. v. Jackson and another (1976) 3 All E.R. 641)
' I have heard the arguments and perused the record.
10. Adverting to the legal objections raised by Mr. Muhammad Arif that in presence of earlier reference subsequent reference is barred under Order 2, Rule 2, C.P.C. And is hit by principles of res judicata. Elaborating his arguments it was stated that all the disputes urged now, are pre dated to the first reference and according to him by virtue of section 41 of the Arbitration Act, provisions of C.P.C. Are applicable in arbitration proceedings. According to him since dispute raised now, were not agitated earlier would amount to relinquishment and deemed to have been waived in terms Of Order 2, Rule 2, C.P.C. And so also principle of constructive res judicata will be attracted reliance on PLD 1993 SC 197, PLD 1996 Karachi 458 and 1999 MLD 236 was made.
11. As stated above plaintiff in para.4 detailed the acts of omission and commission on the part of defendant. Claim is contained in para.8 of the plaint. Reply of defendant to para.8 is relevant for the purpose of instant proceedings, which reads as under.
"As regards contents of para.8 it is submitted that the claims listed by claimant from serial Nos.I to VI were never raised right up to the time of arbitration commenced in 20-7-1999 when he filed his entire claim before the arbitrators on 17-7-1999. These are afterthought and barred under Order II, Rule 2, C . P. C . Without prejudice, the position is explained below."
' Then each of claim was specifically refuted on merits same are not reproduced herein.
12. An agreement, whereby parties out of their own violation agree for the resolution of present or future difference through the medium of arbitration, their intention is apparent, to avoid the technicalities and rigours of procedure and law as are applied in proceedings in Courts of law.
Once parties have agreed to arbitrate, they cannot be allowed to import the rigours and technicalities of rules of procedure and intricacies of law in proceedings before the arbitrator.
13. In a case cited as Ismail Brother Ltd. v. S.M. Fazail & Co. (PLD 1958 (W . P. ) Karachi 158 at page 161 it was held.
"The object of the Arbitration Act is to give expeditious rekef to the parties concerned unhampered by the rules and procedure prescribed by Code of Civil Procedure or the Evidence Act."
' In another case Azad Government of the State of J&K v. Muhammad Aslam (PLD 1981 Azad J&K 71) at page 77 it was held: "Coming to the question of appraisal of evidence, it may be pointed out that this is a settled law that Arbitrator is not bound by the technicalities of law; neither the principle of Evidence Act nor the C.P.C. Are applicable to the proceedings before the arbitrator."
14. Contention of learned counsel for the defendant that provision of C.P.C. By virtue of section 41 of the Arbitration Act, are made applicable to proceedings before the arbitration is misconceived.
Provisions of C.P.C. Are made applicable to all the proceedings before the Court and not before the arbitrator.
15. The terms "Arbitration agreement" under section 2(a) of the Act is defined to mean; "a written agreement to submit present or future differences to Arbitration, whether an arbitrator is named therein or notes." (emphasis added).
' Above referred definition postulat submission of present or future DIFFERENCES the plural use o "difference" clearly indicated that there c be more than one differences that may arise, if such is the case then each may be subject matter of separate reference. It, however depends on the nature of the contract.
16. Commercial contract generally and more particularly building contract inherently are serial contract each series comprised of numerous stages, each State may comprise of bundle of reciprocal obligations and each of the obligation may give rise to a claim and same if converted into a difference may give rise to a reference to an arbitration.
17. It is not always necessary that each and every dispute or difference may be subject-matter of reference. A situation may arise where a claim is made by one party and that claim is settled after negotiation. It is only those claims, which are not settled, may be converted into a dispute/difference worth to be referred to arbitration.
18. In cases of a serial contract, like one in hand, several claims at various stage of contract may be raised, and come under consideration at different level for resolution in the manner provided for in the agreement, at occasion one claim may take little longer time to mature into a difference/dispute worth agitation, by way of reference to the arbitration, then other. It is at the option of the party to the agreement to wait for as many number of claims maturing into dispute/ difference to refer to arbitration together or separately as and when they arise. Reliance on the case of 'Land Acquisition Collector' (supra) by Mr. Arif is of no help to him, there can be no cavil to the proposition laid down by the apex Court that, provisions of Order 2, Rule 2, C.P.C. Are attracted in the case of award under the Land Acquisition Act, 1894 (L.A. Act) the case is distinguishable.
Firstly reference under the Land Acquisition Act has entirely different connotation therein, it is used to mean objections by any interested party to the award made by the Collector, whereas, under the Arbitration Act, reference means, actual submission of a particular difference or dispute under the arbitration agreement by any party to the agreement, to the arbitrator for its decision.
Secondly, reference under Land Acquisition Act is subsequent to the award and under the Arbitration Act, it proceeds the award. Lastly provisions of C.P.C. Are applicable as the proceedings in reference under Land Acquisition Act, are before the Court, whereas the procedural rigors of C.P.C. And other laws are not applicable in proceedings before the arbitrator as the arbitrator is not a Court.
19. Cases of Allah Bux PLD 1996 Karachi 458 and Akber Ali 1999 MLD 236 are cases under the Civil Proceedings in civil Courts, principles enunciated therein are not attracted, as discussed above, in the arbitration proceedings before the arbitrator.
20. In the case of Shah Constructions Co. Ltd. (AIR 1985 Delhi 358); a suit filed by the contractor was defended by D.M.C., it was asserted that the D.M.C. Had suffered losses and they reserve right to claim damages, from the contractor. Arguments of contractor that subsequent reference by DMC is hit by the principle of res judicata was repelled by the Division Bench at page 369 in the following terms: "it is not the law that all dispute in relation to one contract must be disposed of in one reference, failure to raise any such dispute in one reference does not debar a party from raising other dispute to be adjudicated in a subsequent reference:"
21. Similar views were expressed in the cases of Messrs Alkarama (AIR 1981 Delhi 230), Kerorimall (AIR 1964 Cal. 545) in all the above three cases, reliance was placed on the case of Bal Mukandi (AIR 1920 Cal. 808) which view still holds the field. It was held; "where by the terms of a contract the parties agree to referral disputes arising on or out of it to arbitration, the right to make a submission is not exhausted by reason of the mere fact that one award final and complete has issued from it, there may be an indefinite number of awards, as it is possible to have further disputes over the same claim which are not covered by the first award and the arbitrator have jurisdiction to make award from time to time in dispute arising out of the contract as such dispute arise."
' In Purser & Co (Hillingdon) and Ltd. (1976) 2 All ER 641 it was held; "In arbitration proceedings it was the terms of reference of the arbitration which determined the issue which the arbitrator had to decide. Accordingly, if a particular issue were included in the terms of reference, the claimant would be estopped by the doctrine of res judicata from raising that issue in subsequent arbitration proceedings even though the arbitration in the original arbitration had made award in relation to that issue where, however, an issue was not included in the terms of reference, even though a dispute between the parties about it existed at the time of arbitration the claimant would not be estoped from raising the issue in subsequent arbitration proceedings."
22. I was able to lay my hand on a case from the jurisdiction of this Court referred to as Haji Hashim Haji Ahmed & Bros v. Trading Corporation of Pakistan (PLD 1977 Karachi 180) wherein dealing with somewhat similar objections as urged by Mr. Arif in instant suit it was held; '
"This is no warrant for the wide proposition that there can be only one reference under an arbitration agreement. There is nothing in the Arbitration Act so to restrict the right of an aggrieved party and there can be cases where successive resort can be had to arbitration, if successive disputes arises in and series of transaction under the same contract as long as the contract remained operative and disputes arise regarding each such transaction separately."
23. From what has been discussed above it is clear that it is only a dispute that had been referred to arbitration, whether an award was given or not, cannot be the subject-matter of a subsequent reference and to that extent such dispute may be hit by the principle of res judicata and not otherwise. Disputes, which could have been raised when making a reference but, were not raised, could not be said to be hit by the principle of constructive res judicata. There can be successive claims depending on nature of contract, maturing into a difference and at the option of party to the agreement may be subject-matter of reference. The moment a party exercises its option to convert a dispute into a reference, other party is obliged to enter into the arbitration and subject to limitation, same cannot be resisted on the ground that it was not raised at a particular point in time.
24. Again adverting to the merits of the suit. Defendant in reply to para.8 of the plaint had admitted that the dispute-raised therein were never raised earlier, which admission, in view of the discussion made above is sufficient to allow the suit.
25. Since admittedly the plaintiff's employment was terminated on 16-11-1998 and the plaintiff had demobilized from the site of work on 17-11-1998. Plaintiff is directed to refer all the disputes that have arisen out of the subject contract till date including one mentioned in para.8 of the plaint to the same set of arbitrators as appointed in earlier Suits Nos.1033 of 1998, 1034 of 1998 and 344 of 1999, as in my opinion same set of arbitrators are already seized of some of the references arising out of the same contract such course is all the more appropriate to avoid different and divergent approach and conflicting award, under similar circumstances.
26. Defendant will be at liberty to raise objections and defend the claim of the plaintiff before the arbitrator on merits. Defendant may also raise counter-claim, if so advised.
27. The application under section 20 of the Arbitration Act stand allowed in terms of above.