' NAZIM HUSSAIN SIDDIQUI, J.---The petitioner, under Article 185(3) of the Constitution of Islamic Republic of Pakistan, 1973, seeks leave to appeal against the judgment dated 26-5-1999 of a learned Division Bench of High Court of Sindh, Karachi, passed in H.C.A. No,52 of 1991, whereby the judgment dated 4-2-1991 of learned Single Judge was upheld and the award of Sole Arbitrator, Mr. Justice (Retd.) Fakhurddin G. Ebrahim, was made rule of the Court.
2. The respondents are building contractors and were awarded by the petitioner the work of constructing an International Pavilion at Pakistan International Trade Fair, 1984. The bill of quantities
(BOQ) for civil work contained as many as 25 items. In relation to 7 items, viz. 4 (ix), ((a), 8, 12, 22, 24 and 25, the respondents were required to furnish unit rates. Above items of work were not quantified while the others were.
3. The Letter of Intent dated 26-4-1984 was issued by the petitioner to the respondents showing total value of Rs,27,37,000 inclusive of civil, plumbing and electrical works. Aforesaid 7 items were, however, excluded. Admittedly, work on said items was carried out by the respondents and the dispute between the parties was confined to the unit rates of those items. The respondents have claimed that they were required to quote the unit rates of said 7 items which they did. It is their case that petitioner had accepted the same and the work on those items, under instructions from the petitioner, was carried out. According to them, they are entitled to be paid for said items on the basis of unit rates quoted by them.
4. The case of the petitioner is that work on said 7 items could not be carried out without its approval and that the respondents were entitled to receive only minimum rate for each of said items.
5. There being dispute about payment between the parties, the respondents had filed an application under section 20 of the Arbitration Act (Suit No, 160 of 1985), which was allowed by the High Court vide judgment, dated 17-12-1985 mentioning therein that by consent Mr. Justice (Retd.)
Fakhurddin G. Ebrahim was appointed as sole Arbitrator.
6. On 10th September, 1987, the Sole Arbitrator gave his award holding that an amount of Rs,14,38,075.38 was payable by the petitioner to the respondents. Beside above, the petitioner was also liable to pay a sum of Rs,2,50,579.6 being interest thereon at the rate of 6 per cent. Per annum from 15th October, 1984 till the date of the award. The petitioner was also directed to pay Rs,60,000 as the cost of the proceedings.
7. The petitioner has impugned the validity and genuineness of the respondents' letter dated 28-4- 1984 and also contended that clause 66 of the General Conditions of the Contract was not interpreted in its true, sense. Both said letter and clause are as follows:-- "Dated 28th April, 1984.
' The Federation of Pakistan Chambers of Commerce and Industry, Main Clifton Road. KARACHI ' Sub: CONSTRUCTION OF INTERNATIONAL PAVILION 1E-5 IN PAKISTAN INTERNATIONAL TRADE FAIR, 1984.
' Dear Sir, ' With reference to the letter of Intent/Acceptance of our tender and award of the subject work in our favour. Today, we hereby return one copy of your letter dated 26th April, 1984 duly signed and accepted by us subject to our mutual understanding that all the rates of items quoted by us BOQ shall be binding on the parties, i.e, ourselves and the owners.
' Assuring you our best cooperation and services. Thanking you, Your faithfully, For Al-Farooq Builders."
"66. Settlement of Disputes Arbitration: ' If any dispute or difference of any kind whatsoever shall arise between the Employer and the Contractor in connection with arising out of the Contract or the carrying out of the work (whether during the progress of the works or after their completion and whether before or after termination abandonment or breach of the Contractor) it shall in the first place be referred to and settled by the Employer who shall give written notice of his decision to the Contractor.
' If the Employer has given written notice of his decision to the contractor and no claim to arbitration has been communicated to the Employer by the Contractor within a period of 30 days from receipt of such notice the decision shall remain final and binding upon the Contractor. If the Contractor be dissatisfied with any such decision then he may within 30 days after receiving notice of Employer's decision require that the matters in dispute be referred to arbitration. The matter or matters shall then be referred to the award of a sole arbitrator agreed to by both the parties or failing such agreement to the award of two arbitrators one to be nominated by the Contractor and one to be nominated by the Employer or in case of the said two arbitrators not agreeing between themselves then to the award of an umpire to be appointed by the said two arbitrators in writing before proceeding on the reference. The decision of sole arbitrator or as the case may be or two arbitrators or in the event of their not agreeing of the umpire so appointed by them shall be final and binding the parties. The provisions of the Arbitration Act in force in Pakistan shall apply and govern the proceedings. Reference to arbitration as provided herein shall be a condition precedent to any other acting at law. Upon every and any such reference the assessment of costs incidental to the reference and award respectively shall be at the discretion of the sole arbitrator, the two arbitrators or the umpire as the case may be: ' The venue of arbitration shall be at Karachi Pakistan."
8. Learned D.B. Agreeing with the findings of the Sole Arbitrator and of learned Single Judge dismissed the appeal. However, the judgment and decree of learned Single Judge were modified in respect of interest and it was held that the Sole Arbitrator could grant interest only from the date of award till the date of decree, as the period subsequent to passing of the decree was governed by section 29 of the Arbitration Act and the Court was empowered to grant interest from the date of decree till payment.
9. It is contended on behalf of the petitioner that the proceedings before learned Arbitrator stood vitiated as the dispute was raised in violation of clause 66 referred to above. Learned counsel submitted that the dispute, in fact, was to be determined by the architect/engineer by recourse to said clause 66 and since no such dispute was raised or referred to in the application under section 20 of the Arbitration Act, learned Arbitrator had no jurisdiction in respect of the matter. Learned counsel also argued that the award of the Arbitrator amounted to error apparent on the record and was liable to be set aside, being outside the scope of reference.
' Learned counsel also contended that the High Court had failed to appreciate that the contract between the parties was a 'lump sum' contract and the respondents were not entitled to any sum over and above the agreed contract price viz. Rs,27,37,000. He also argued that the letter dated 28- 4-1984 quoted above was a disputed document and could not be relied upon unless its genuineness was established.
10. As regards first contention, it is noted that the dispute was referred to Sole Arbitrator by consent of the parties. Both the parties had appeared before the Arbitrator and led the evidence. Learned Arbitrator from the pleadings of the parties had settled 4 issues and recorded his findings thereon.
The dispute at the first instance could not be referred to the employer as the petitioner had waived its right when by consent Sole Arbitrator was appointed. Even otherwise, the contention has no force for the reason that legal notice was served upon the petitioner and in response thereto it could settle the dispute with the respondents. Instead of doing above, the petitioner had agreed for the appointment of Sole Arbitrator. There is hardly any substance in the argument that Sole Arbitrator was not empowered to settle the dispute.
11. So far, the plea of payment exceeding 27,37,000 is concerned, it is noted that Letter of Intent dated 26-4-1984 showed above amount for work including civil, plumbing and electrical works. It is, however, an admitted fact that in awarding the work aforesaid 7 items were specifically excluded.
It is pertinent to point out that the respondents had submitted 5 running bills, which included said 7 items. In these bills, the respondents claimed the amount at their BOQ quoted rates and prior to start of the work had quoted those rates to the petitioner. It is also a proven fact that the petitioner had ordered the respondents to carry on the work on said items. If the petitioner was not satisfied with said rates, it should have informed the respondents before start of the work accordingly. It is important to note that the running bills as well as the final bill were scrutinized both as to the quantities as well as the rates by the petitioner's architect representative at site and these bills were passed at rates given in BOQ for said 7 items. The petitioner is not, at all, justified to claim that the rates quoted by the respondents were not approved by it.
12. Adverting to the letter dated 28-4-1984, it is noted that the respondents by said letter, made it clear to the petitioner that the acceptance of Letter of Intent was "subject to mutual understanding that all the rates of items quoted in BOQ shall be binding on the parties". This clearly established that the parties were bound by BOQ rates, including the rates for the items in question. Above letter, admittedly, was received by the petitioner and at no stage its validity, genuineness and contents were questioned. Besides, when running bills of the respondents were passed this letter must have been examined by the petitioner. In fact, it was already accepted and acted upon.
13. In consequence, leave to and the petition is dismissed.
Petitioner dismissed.