SYED JAMSHED ALI, J. -- The order/judgment dated 23.12.1999 of the learned Civil Judge 1st Class, Lahore, has been assailed in this appeal. It disposed of the application of respondent No. 1 under Sections 14 and 17 of the Arbitration Act. The objections filed by the WAPDA, appellant No. 1 (hereinafter referred to as the Authority) to the award were rejected and it was made the rules of the Court. Chief Engineer (R.E) has been joined as appellant No. 2, although he was not party before the learned Trial Court nor is otherwise a necessary part.
2. On 4.9.1991 a consultancy agreement was executed between the Authority and M/s. ICE-PAK, respondent No 1 (hereinafter called the consultant), for rural electrification of a number of villages in North, West Frontier Province. The project was finance. By the Overseas Economic Co-operation Fund Japan (Loan No. P.K. 21). The period of completion was 20 months at an estimated cost of Rs.
1,84,59813/-. For a variety of reasons the project could not be completed and extensions were allowed by the 'Authority' from time to time through amendments Nos. I to V to the aforesaid agreement. According to these amendments time for completion of the project was extended upto 31.12.1996. However, the project could not be completed even within the extended period, but the consultant continued to work on the project. The consultancy agreement was ultimately terminated by the Authority vide letter dated 5.6.1998 i.e.f. 30.6.1998.
3. The consultant, whose dues were outstanding for the period upto 31.12.1996 and for the period from 1.1.1997 to 30.6.1998 invoked, the arbitration clause. Vide letter dated 5.12.1998 (Ex.A.2) the Authority proposed the name of S. Jawad Haider Shah, Ex-Chief Engineer (Wapda) and the consultant was called upon to convey its. Acceptance. Accordingly, on 8.12.1998, the consultant accepted Mr. S. Jawad Haider Shah as the sole arbitrator.
4.- The arbitrator entered upon the reference Respondent No. 1 submitted following claims before him.
(a) Dues outstanding upto 31.12.1996 Rs. 4684,390/-.
(b) For additional work (not covered by the agreement) Rs. 3331271/-.
(c) Negotiated cost of work from 1.1.1997 to 30.6.1998 Rs. 7200920/-.
(d) Interest on the withheld payments Rs.118,80,000/-.
5. The claims filed before the Arbitrator were resisted by the Authority. It was asserted that for the period upto 31.12.1996 consultant had been paid the amount in accordance with the percentage of work done. As far as the remunerations for the period from 1.1.1997 to 30.6.1998 are concerned, it was averred that the Project Director had only made a proposal while the Authority had finally approved an amount of Rs. 18,00,000/-. It was further contended that the vehicles and equipment were not returned by the consultant and therefore, he was liable to pay rental charges. There was no formal extension of the contract beyond 31.12.1996. The other claims including the claim for interest were also controverted.
6. The arbitrator received evidence and on 22.5.1999 rendered the award in the following terms:- "(a) The right to the payment of unpaid invoices for the period upto 31.12.1996 amounting to Rs.
2,605,431/- is adequately proved and is awarded (subject to rectification of calculation error if any).
(b) Payment of Rs. 7.2 million as cost of consultancy invoices for period 1.1.1997 to 30.6.1998 is awarded (subject to rectification of calculation error if any).
(c) Claim of ICEPAK for interest on delayed payment of invoices prior to 31.12.1996, is not admissible as the payments were accepted without any objection of the consultant.
(d) Clause 5.61 "payment to Consultants" stipulates crediting of interest/profit accrued on account of revolving fund to the Authority. On the basis of equity ICEPAK is entitled to interest on withheld payment of invoices prior to 31.12.1996 and those for the period 1.1.1997 to 30.6.1998, on the negotiated cost of Rs. 7.2 million from the dates due @ rate of 10% fixed by State Bank of Pakistan till 9.12.1998.
Equipment, tool and plant with the Consultant shall be returned as per terms and conditions of the Agreement."
7. Objections were filed by the Authority against the award . It was asserted that there was no written agreement beyond 31.12.1996, between the parties, the proposal of the Project Director for the negotiated cost at Rs. 7.2 million was not approved by the Authority, the evidence was not considered by the arbitrator, the award was not properly reasoned, it was vague and 'in-definite, the amount due to the consultant had been paid, the award of interest was also questioned. It was asserted that the award was perverse, arbitrary and the arbitrator was guilty of mis-conduct.
8. The learned Trial Court framed the following issues:- ISSUES, "(1) Whether there did not exists any written Agreement between the parties for the appointment of arbitrator, if so, its effect? OPR.
(2) Whether the arbitrator has mis-conducted in the arbitration proceedings? OPR.
(3) Whether the sole Arbitrator has not taken into consideration the evidence adduced by the parties? OPR.
(4) Whether the application under Section 14/17 Arbitration Act is misconceived and liable to be rejected? OPR.
(5) Whether the application u/s. 30/33 Arbitration Act is barred by time? OPR.
(6) Whether the respondent's application 'for set asiding the award is not maintainable in view of judgment reported in 1983 SCMR 718? OPA.
Whether the award is in-sufficiently stamped and is liable to be impounded? OPR.
Whether the award dated 22.5.1999, merits to be made rule of the Court? OPA.
(9) Relief."
9. Respondent No. 1 examined Col. Khalid Bashir Farooqi, Chairman of respondent N. 1, and tendered documents Ex.A.1 to A.3. The Authority examined Kh.
Abdul Rashid as R.W.1, Ex.R.1 to R.19 were also found on record as having been exhibited on 25.9.1999.
These exhibits do not bear the initials of the learned Presiding Officer nor are mentioned in the interim order dated 25.9.1999. The evidence collected by the arbitrator was also annexed to the record.
10. On issue No. 1 the learned Trial Court found that there was an arbitration agreement between the parties. On issues Nos. 2 and 3 the learned Trial Court observed that the learned counsel for Wapda had not uttered a single word to highlight the misconduct attributed to the arbitrator. It was found that the award was based on solid reasoning and evidence adduced by the parties. Issues Nos.4, 5, 6 and 7 were not pressed before the learned Trial Court. Accordingly, the objections were turned down and the award was made the rule of Court. According to the decree sheet the Authority was burdened with costs which included an amount of Rs. 3,45,25/-, the stamp duty, paid by the consultant on the award and Rs. 100,000/- as counsel fee. The basis thereof, was the certificate of the learned counsel which is on the record.
11. The learned counsel for the appellants has raised the following contentions:-
(i) The objections filed by the Authority were not duly considered. It was the duty of the learned Trial Court to have seen' that the award had been validly rendered. Reliance was placed on Section 15, 16 and 17 of the Arbitration Act and Pakistan through General Manager, Pakistan Railways, Vs. Messrs Q.M.R. Expert Consultants (PLD 1990 S.C. 800) and M/s. Awan Industries Ltd. Vs. The Executive Engineer, Lined Division (1992 SCMR 65).
(ii) Regarding claim for the amount due upto 31.12.1996, his contention was that material documents were not considered by the Arbitrator Ex.R.9 was relied upon to contend that according to the said letter dated 16.12.1996 of the consultant an amount of Rs. 4,05,76,011/- was received by him as against the total amount of Rs. 3,94,02,4421- and thus, in fact the consultant had been over paid. Ex.R.12 was also relied upon in support of this submission.
(i.e) That by virtue of amendment No. V, the agreement was extended upto 31.12.1996. There was no written agreement further extending the consultancy contract and therefore, i.e.f. 1.1.1997 the agreement, containing the arbitration clause, ceased to be operative. Elaborating this submission, he contended that no provision of the agreement could be pressed to adjudicate the claim of the consultant. This period was described by him as a non-agreed period. According to him, the extension was provided by clause 3.3 of the agreement which could only be done, by the Authority.
He further contended that the consultancy cost of the work done during the non-agreed period was to be mutually settled and was not therefore, referable to arbitration.
(iv) The claim of the consultant to an amount of Rs. 7.2 million for the work done during the non- agreed period on the basis of the negotiated cost worked out by the Project Director was unsustainable as it was only a proposal of the Project Director. It was only the Authority who could finally adjudicate upon the said claim of the consultant. He relied on Article 3.3(b) of the contract to contend that the Project Director had forwarded the claim of respondent No. 1 which was duly considered and an amount of Rs. 1.8 million was sanctioned by the Authority.
(v) By awarding 7.2 million to the consultant the arbitrator acted contrary to the terms of the contract. It was further contended that even according to the award the negotiated cost of Rs. 7.2 million was only a proposal of the Project. Director.
(vi) Regarding the claim to interest, his contention was that in clause (c) of para 20 of the award the arbitrator declined interest on the amount due upto 31.12.1996 but in clause (d) he allowed interest not only on the said amount but also allowed interest on the amount of Rs. 7.2 million. His contention was that the arbitrator could not allow any interest at all .And further that while allowing interest Article 5.6.1 (a) was ignored. It was further contended that interest in all forms has been declared as repugnant to the Injunctions of Islam.
Reliance was placed on Dr. M.' As/am Khaki, Vs. Syed Muhammad Hashim and 2 others (PLD 2000 S.C. 225).
(vii) The arbitrator did not record reasons in support of his conclusion's nor considered or referred to the evidence produced before him.
(viii) The learned Trial Court clearly exceeded its jurisdiction by including in the cost an amount of Rs. 3,42,25/-. It was payable by respondent No. 1 on the award.
12. On the basis of the above submission, he contended that there were not only errors apparent on the face of the award but also that the arbitrator was guilty of legal mis-conduct.
13. In support of his submissions the learned counsel for the appellants placed reliance on the following judgments:-
(1) Wazir Khan and 8 others Vs. Sardar All and 25 others (2001 SCMR 750).
(2) Muhammad Iqbal Vs. P.I.D.C. (2000 CLC 876).
(3) Province of Punjab through Collector, Bahawalpur Vs. Sufi Habib Ullah (1982 SCMR 243).
(4) Karachi Metropolitan Corporation Vs. Associated Constructors Ltd. (1984 CLC 1077).
(5) M. Aslam Amin Vs. Muhammad All Khan and another . (1995 CLC 1795).
(6) Province of the Punjab and another Vs. M/s. Industrial Machines Tools Government Contractors (1986 MLD 501).
(7) The Director of Industries and Mineral Development Vs. Dada Bhoy Hormusjee & Sons (1990 MLD 301).
(8) Government of Pakistan' Vs. M/s. Overseas Enterprises (PTE, Ltd. (1992 CLC 1138).
(9) M/s. Awan Industries Ltd. Vs. The Executive Engineer, Lined Channel Division and another (1992 SCMR 65).
(10) Pakistan through General Manager, Pakistan Railways Vs. Messrs Q.M.R. Expert Consultants (PLD 1990 S.C. 800).
(11) Punjab Province through Secretary to Government of the Punjab, Irrigation and Power Department, Lahore and another Vs. Messrs Ghauhan & Company through Managing Partner (PLD 2000 Lah. 314).
(12) Pir Bakhsh represented by his Legal Heirs and others Vs. The Chairman, Allotment Committee and others (PLD 1987 S.C. 145).
14. On the other hand the learned counsel for the respondents has raised the following contentions:-
(i) The appellants did not urge any thing in support of issues Nos. 2 and 3 before the learned Trial Court while issue No. 6 was not pressed. Therefore, the contentions being urged before this Court to attack the award cannot be considered.
(ii) That the agreement was .Duly extended as is borne out by the letter of termination of the contract dated 5.6.1998 and therefore, the contention that the non-agreed period was not covered by the agreement of the parties has no merit. It was further contended that the Authority had proposed the arbitrator, particularly for the non-agreed period, and therefore, it could not be heard to' say that there was no arbitration agreement. The correspondence between the parties clearly constituted the arbitration agreement.
(i.e) An arbitrator is a domestic tribunal chosen by the parties and therefore, is free from the constraints which apply to a judicial forum. According to him, the award in this case was well- reasoned which could be found in paras 13 to 18 of the award, it was a speaking award. Reliance was placed on M/s. Abdullah Traders through Partner Mukhtar Ahmad Vs. Trading Corporation of Pakistan Ltd. Through Chairman, Attorney, Principal Officer and 2 others (1999 CLC 2047), M/s. Hafeez Construction Co. Vs. M/s. Javedan Cement Ltd. (1989 CLC 885).
(iv) There was neither an error of law or fact apparent on the face of the award nor it was established that the arbitrator was guilty of mis-conduct. It is the duty of the Court to give -every reasonable intendment in favour of the award and lean towards up-holding it rather than vitiating the same. Reliance was placed on Zaka . Ullah Khan Vs. Govt. Of Punjab (PLD 1998 Lahore 281), M/s. Joint Venture KG/RIST Vs. Federation of Pakistan (PLD 1996 S.C. 108), G.M.K. Enterprises Vs. Shaheen Builders (1999 CLC 698), Ashfaq. All Qureshi Vs. Municipal Corporation, Multan and another (1985 SCMR 597), Lahore Development Authority- Vs. M/s. Khalid Javed & Co. (1983 SCMR 718), M/s. Maqbool Associates Ltd. Vs. Messrs Sindh Sugar Corporation Ltd. (1990 CLC 55), Ghulam Abbas Vs. Trustees of the Port of Karachi (PLD 1987 S.C. 393).
(v) Reasons were given in sufficient details in the award. It- was not necessary for the. Arbitrator to incorporate the evidence-in the awards. Reliance was placed, on Province of Sindh and 4 others Vs. Waseem Construction Co. (1991 CLC 66) and Province of Baluchistan Vs. Mirza Abdul Hayee (1.991 SCMR 1313)..
(vi) The arbitrator is the sole judge of all questions of law and fact, and the error apparent on the face of the award should be discoverable by reading the award itself and the evidence before the arbitrator could not be reappraised by this Court. According to him, conclusions of the arbitrator on the questions of law and fact cannot be interfered with on the ground of a latent error. Reliance was placed on the cases of Ghulam Abbas, Ashfaq All Qureshi, Joint Venture KG/RIST.
(vii) As far claim No. 1 is concerned it was explained that the total cost of the preject was .4,,31810442/- which included the cost of vehicles, etc. At Rs. 37,7900/- and out of the net cost of work after payments received by the consultant, an amount of Rs. 2.61 million was outstanding which was allowed by the arbitrator. In support of this submission various documents on the record produced before the arbitrator were referred to.
(viii) As far as, the remunerations for the extended period i.e. 1.1.1997 to 30.6.1998 are concerned he Contended that in accordance with the terms of the contract the Project Director acted as Authority. He always acted with the permission of the Authority and therefore, the negotiated cost of 7.2 million worked out by the arbitrator was binding on the Authority and this is the interpretation placed by the arbitrator on crause 3.3 of the agreement.
(ix) The arbitrator acted as an agent of the Authority and therefore, had the necessary authority to decide the negotiated cost. It was therefore, rightly awarded by the Arbitrator. Reliance was placed on .The Commerce Ban Ltd. Karachi Vs. Habib Bakhsh and another (PLD 1978 Quetta 45) and Muhammad' Banaras Khakan Vs. Miss Rubina Chaudhry and others (1997 C.LC 997).
(x) As far as the grant of interest is concerned, he contended that the arbitrator could award, interest on equitable grounds and in any case the award having been affirmed by the learned Trial Court it became part of the order of the learned Trial Court under Section 29 of the Arbitration Act.
Highlighting the justification for the interest, he contended that although the revolving fund was initially created but it was not recouped with the result that the respondent had to borrow a sum of Rs. 13' million, on huge interest, to carry out The operations while the Authority illegally withheld payment due to the consultant. It was further submitted that the consultant was paid in yen which were converted into dollars and payment made accordingly. He contended that with the rising tate of the dollar the consultant had to suffer a loss. Reliance was placed on K.F. Development Ltd. Vs. M/s. Dawood Cotton Mills Ltd. (1999 MLD 2953), Province of Sindh and 4 others Vs. Waseem, Constructions Co. (1991 CLC 66), Muhammad Saleem Butt Vs. M/s. Tading Corporation of Pakistan, Karachi (1986 CLC 254) and (1995 CLC 914).
(xi) As to the costs allowed by the Court, his contention was that since the respondents had succeeded in litigation and their due payments were un-lawfully withheld the award of cost including the stamp duty on the award was fully justified as expenditure on litigation. Reliance was placed on Muhammad Akram Vs. Mst. Farman (PLD 1990 S.C. 28).
15. I have considered the submissions made by the learned counsel for the parties. The contention of the learned counsel for the appellants that for the non-agreed period (1.1.1997 to 30.6.1998) there was no written agreement between the parties, and the original agreement having ceased to be operative i.e.f. 1.1.1997, there did not exist any arbitration agreement and the Arbitrator had no jurisdiction to adjudicate upon the claim for the said period is devoid of any merit. The contention formed subject-matter of issue No 1 and was rightly repelled on the basis of the letters of the Authority Ex.A.1 and A.2. Un-disputedly vide letter dated 5.6.1998 the contract was terminated i.e.f.
30.6.1998. There was only one basic agreement between the parties which contained the arbitration clause. Further it was the 'Authority' itself, who had proposed Mr. S. Jawad Haider as the sole arbitrator to settle the dispute regarding the non-agreed period, which was accepted by the appellant. Having agreed to refer the matter to arbitration, the appellants could not be heard to say that there was no agreement in writing regarding the non-agreed period. Further, the learned counsel for the appellants himself pressed same provisions of the agreement to attack the award.
16. In fact the main bone of contention between the parties is the amount of Rs. 7,2 million, the consultancy cost of the extended period, and the interest awarded by the Arbitrator.
17. To appreciate the contentions of the learned counsel for the parties reference to the relevant provisions of the contract will be necessary. These are reproduced hereunder:- "means Pakistan Water and Power Development Authority also known as (Wapda)."
The Project Director has been defined as under in Article 1(e).
"Project Director means the person appointed as such by the Authority from time to time who will represent the Authority in all matters relating to the project."
Article 3.3(a) of the contract providing for extension of services and the remuneration for the extended period is as under:- "The Authority shall have the right to extend 'the period for all or any part of the services provided in this agreement beyond the period mentioned in. Article 3.2 by written notice to the consultant. The remuneration to the consultant for providing services during the extended period shall be decided by mutual agreement at the time when such extension is allowed."
Article 4.3.3 provides for appointment of Project Director, in the following terms:- "The authority shall designate a Project Director for the project for day to day administration of the project (emphasis supplied) who shall represent the Authority. In carrying out all services covered by the agreement, the consultant or their representative at the project site shall coordinate all times with the Project Director or his site representatives."
18. A perusal of Article 3.3(a) shows in un-ambiguous terms that it is 'Authority' as defined in Article 1(d) of the contract to decide the remuneration of the consultant for .Providing services during the extended period by mutual agreement at the time when such extension is, allowed. Therefore, by relying on Article 3.3(a) of the contract to assume that Project Director was the final authority to work out the negotiated cost, the arbitrator ignored various articles of the contract. The Authority referred to in Article 3.3(a) will have to be interpreted in the light of the definition given in Article 1(d) of the contract. The authority of the Project Director, according to clause 4.3.3., was restricted only to day to day administration and nothing beyond it. In fact the consultant was aggrieved of the decision of the 'Authority' to approve a. Sum of Rs. 1800,227/- against the proposal of the Project Director for Rs. 7.2 million for the extended period. Even, in pare 5 of the award the arbitrator noted that the negotiated cost of 7.2 million was a proposal submitted by C.E.R.E: (underlining is mine). Despite noting that it was a proposal, the entire amount of negotiated cost was allowed to the consultant.
This by itself constituted an error apparent on the face of the award. It may be noted that the arbitrator was supposed to render the award in the light of the contract made by the parties and to give effect to it and not to make a new contract on behalf of the parties as has been done in the present case by the Arbitrator by relying upon the proposal of the Project Director, as if it he was the final authority to determine the remunerations for the services rendered by the consultant from 1.1.1997 to 30.6.1998. The failure of the arbitrator in not giving effect to the terms of. The contract also constitutes an error apparent on the face of the ward. In fact the dispute having arisen between the consultant and the 'Authority the arbitrator was supposed to decide the controversy as to the amount, due to the consultant for the extended period.
19. The contention of the learned counsel for the consultant that the Project Director represented the Authority, was an agent of the Authority and therefore, the negotiated cost worked out by the Project Director was binding on the.' Authority has no merit because the authority of the. Project Director has to be found in the contract itself. The articles of the contract, as noted above, did not authorize the Project Director to finally decide the remuneration to be paid to the consultant for the extended period.
20. As far the claim of ,respondent No 1 to the un-paid amount upto 31.12.1996 is concerned the arbitrator awarded an amount of Rs. 26,05,431/- on the basis of un-paid invoices against the claim of respondent No. 1 far a sum of Rs. 46,84,390/-. In para 16 of the award it was clearly observed by the arbitrator that payment to. Consultant on percentage progress-was not tenable. It was adequately. Explained by the learned counsel for the respondents that payments received by respondent. No. 1 as mentioned in Ex.R.9 included the cost of vehicles and equipment. This is duly supported by the material on the record.
21. There is merit in the contention of the learned counsel for the appellants that in clause (c) of para 20 of the award the arbitrator found that respondent No. 1 was not entitled to interest prior to 31.12.1996 while under clause (d) of para 20 interest was allowed even on the amount of the invoices prior to 31.12.1996. The grant of interest under clause (d) of para 20 was, therefore, clearly inconsistent with the finding of the arbitrator under clause (c). This constitutes an error apparent on the face of the award.
22. As far as the direction of the Trial Court awarding the amount of Rs. 3,42,525/- paid by respondent No. 1 as Stamp Duty on the award is concerned, no reason is forth coming in the judgment to burden the Authority with the said amount. It only finds a mention in the decree sheet.
It may also be noted that the impugned judgment does not direct making of the award, rule of the Court with costs.
23. The award of interest on the amount of Rs. 7.2 million was necessarily linked up with the adjudication of the claim of the consultant and grant of interest could only be considered after the decision of the arbitrator .As to the amount due for the extended period .
24. As far as the return of vehicles and equipment is concerned-, the learned counsel for the consultant contended that a number of articles have already been returned. I find that the award on this question is also vague and un-enforceable. The appellant, has before this Court, put up a counter claim. The arbitrator was required to determine as to what articles were being withheld by respondent No. 1 which were required to be returned end these should have clearly been *specified to avoid further litigation.
25. The contention of the learned counsel for the respondents that the Arbitrator was the sole judge of all questions of law and fact and his conclusions are sacrosanct has not in the circumstances, impr,essed me. Under Section 26-A of the Arbitration Act, an arbitrator is bound to record reasons.
It necessarily follows that the Court while scrutinizing the award can examine the validity of the reasons with reference to the material placed before the arbitrator and the law applicable thereto.
Z6. The import of the aforesaid provisions of law was considered by a learned Division Bench of the Karachi High Court in the case of Karachi Metropolitan Corporation Vs. Associated Constructors Ltd.
(1984 CLC 1077) and the following observations were made:- "The object of amendment in the Arbitration Act, 1940 by insertion of Section 26-A seems to be that if the award is based on irrelevant or extraneous considerations or matters or erroneous view of law or material facts or evidence and other relevant matters have not been considered, it could be known to the parties so that any of them aggrieved by the award could challenge it and also to enable the Court to consider any question of law arising out of the award."
Reference may be made to the case of J.F.C. Gollaher Vs. Samad Khan (1993 MLD 726) wherein it was observed that the prodeedings before the arbitrator are of a quasi judicial nature and if the conclusions drawn are based on reasons which are bad it would be open to attack. The aforesaid judgments were noted with approval by this Court in the case of Muhammad Iqbal, supra and it was observed that if the conclusion drawn by the arbitrator is perverse or the reasons given by him are not based on evidence produced before him or the law applicable, it constitutes misconduct.
26. Likewise the contention of the learned counsel for the consultant that nothing was urged before the learned Trial Court, in support of issues Nos. 2 and 3 by the appellants and, therefore, the pleas now being raised cannot be considered has no merit. Irrespective of the objections or the contentions of the parties, it is the duty of the Court to see that the award is validly rendered.
Reference may be made to the cases of Pakistan through General Manager and M/s. Awan Industries, supra. It may also be noted that an appeal is continuation of original proceedings and all questions of law and fact are open to the consideration by the Court of appeal. It may observe that civil proceedings are not to be necessarily treated as adversarial, because in that .Case the object of law i.e. To do justice between the parties is likely to be defeated.
27.
28. The judgments cited by the learned counsel for the consultant have been considered. In the case of M/s. Abdullah Traders, supra, it was observed that all relevant pieces of evidence and documents were thoroughly discussed in the reasoning of the arbitrator. In the case of M/s. Hafiz Construction, supra, it was found that the arbitrator gave detailed reasons, the award was speaking and therefore, no interference was possible. In the case of Zakaullah Khan, supra, it was observed that the error in the award must be apparent on the face of it and not latent to be discovered after scrutiny of the material beyond the award. In this case the arbitrator had rccorded a finding of fact which could not be reopened. It may also be observed that in the said case the award was announced on 24.11.1960 before introduction of Section 26-A in the Arbitration Act. In the case of M/s. Joint Venture K.G/R/ST it was held that while considering the award the Court was not to act as a Court of appeal and re-appraisal of evidence was not possible to discover error or infirmity in the award. However, it was observed that perversity in reasoning of the arbitrator was to be established with reference to the material considered by the arbitrator. The Hon'ble Supreme Court found that no such infirmity or error was pointed out. In the case of G.M.K.
Enterprises, supra, the claim was refused by the arbitrator while interpreting various clauses of the contract. It was held that there was no error apparent on the face of the award. In the case of Ashfaq All Qureshi, supra, the Trial Court had dismissed objections to the award on the ground that these were barred by time. The High Court, inter a/ia, interfered on the ground that reasons for the award were not given by the Arbitrator. The Hon'ble Supreme Court found that reasons for the award had been given. In the case of LDA, supra, the Hon'ble Supreme Court observed that the arbitrators were nominated by the petitioner and no mis-conduct was established. It was further, observed that the Government departments should gracefully accept the award of their nominee.
In the case of M/s. Maqbool Associate, supra, it was observed that the Court could not go behind the award and re-open the whole case. However, it was found that the award was well-reasoned, based on record and met the requirements of Section 26-A. In the case of Ghulam Abbas, supra, the award was announced on 14.7.1975. The Hon'ble Supreme Court observed that the High Court could not substitute its on findings for the findings of the arbitrator. In the case of Government of Sindh, supra, it was observed that if the award was not supported by evidence, the 'Court can interfere. In the case of Province of Balachistan, supra, the Horeble Supreme Court found that the objection to the award, i.e. That,it did not contain reasons was not tenable as the arbitrator had recorded reasons in accordance with the terms of the contract between the parties. In the case of Commerce Bank Ltd., supra, it was held that the authority of an agent may be implied as well. It was a case in which an officer of the Bank had entered into a lease agreement with the owner of the premises. In the case of Muhammad Bilal Khan, an application for temporary injunction in a suit for specific performance was decided. The last mentioned two cases were cited by the learned counsel for the respondents to show that the Project Director, as an agent of the Authority, was fully competent to work out the cost of consultancy for the extended period and it. Was binding on the 'Authority. As observed above, the authority of the Project Director was restricted to the day to day administration and the final decision as to the remuneration for the extended period lay with the Authority in terms of the contract. It may be noted that an agent is bound to act within the four corners of the authority conferred by the principle.
29. The judgments relied upon by the learned counsel for the respondents proceed on their on facts. However, from none of the judgments cited by him it could be inferred that even, if the reasons given by an arbitrator are not supported by the material placed before him even them his conclusions are untouchable. If this contention is accepted, it will render the scrutiny of the award by the Court a meaning-less formality and may result in miscarriage of justice.
30. Examination. Of the judgments noted under clauses (x) and (xi) of para 14 regarding the grant of interest and the cost is not considered necessary in view of the order proposed to be made. It may however, be observed that it appears to be settled law that an arbitrator cannot award interest pendent lite. However, future interest could be granted by the arbitrator on equitable grounds. The arbitrator should however, record reasons therefor, and the Court while considering the award must address itself to the question whether grant of interest was justified in the circumstances of the case.
31. The learned counsel for the parties had not made submissions as to scope of reference. They were called upon to address the Court on the said question. They accordingly made submissions.
'32. Vide letter Ex.A.2, dated 5.12.1998, the consultant was asked to convey whether he accepted Mr. S. Jawed Haider Shah as an arbitrator. The subject of this letter was as follows:- "Rural Electrification Project under O,F.C.F. Japan Loan No. P.K. P.21-extension in .Consultancy agreement between Wapda and Consultant with cost and time extension i.e.f 1.1.1997 to 30.6.1998."
This was accepted by the consultant vide its letter dated 8.12.1998. A perusal of the subject of the offer and acceptance for appointment of the Arbitrator ostensibly shows that the dispute referred to the Arbitrator ostensibly shows that the dispute referred to the Arbitrator was the cost and extension of time from 1.1.1997 to 30.6.1998. The learned counsel for the Consultant submits that notwithstanding the subject of the aforesaid letter, all the outstanding disputes between the parties were referred to the arbitrator within the scope of clause 7.5 of the agreement. He further submitted that the consultant had filed claims before the arbitrator, these were contested by the Authority without raising any .Dispute as to the terms of reference, the arbitrator adjudicated upon the said claims, who rendered the award and no objection was taken either before the arbitrator or before the learned Trial Court. He relied on M/s. Waseem and Construction Company Vs. Govt. Of Sindh and others (PLD 1987 Karachi 575) in support of the contention.
33. I have considered this aspect of the matter, I am in agreement with the learned counsel for the consultant. Once the parties chose to appoint an arbitrator within the terms of their agreement then all outstanding disputes arising out of the work done by the. Consultant under the agreement stood referred to the Arbitrator. To insist that for every dispute. Arising out of a contract there should be a specific reference to the Arbitrator will result in to multiplicity of litigation which has to be avoided.
34. Accordingly, the award to the extent of cost of consultancy upto 31.12.1996, being severable, is maintained while the award under clauses (b), (d) and (e) of Para 20 thereof and the order and decree of the learned Trial Court to that extent are set aside. The matter is remitted to the arbitrator to render a fresh award in respect of the claim of the consultant for the extended period i.e. From 1.1.1997 to 30.6.1998, vehicles, tools and equipment and the entitlement to interest of the consultant on the amount found due for the extended period. The parties may be allowed to produce further evidence before the arbitrator. The fresh award shall be rendered within a period of four months from the date of appearance of the parties before him and filed before the learned Trial Court. The arbitrator may take into consideration the material already placed before him and the learned Trial Court shall, if requested by the Arbitrator, make available to him the record of earlier proceedings taken by him.
35. Before parting with this judgment, miscellaneous applications moved by the parties may be attended to. C.M. 7C/2000 has been filed by the consultant for a direction to the appellants for the deposit of an amount Rs. 13,94,410/- as interest from the date of the decree. C.M. 694/C/2000 has been filed by the appellants and seeks a direction to respondent No. 1 to pay an amount of Rs.
3,385 million to the appellants for the vehicles, tools and equipment retained by the consultant.
Since the award is being remitted to the arbitrator, applications moved by the parties are dismissed.
36. The appellants were directed to purchase Defence Saving Certificates in the name of the Trial Court. However, in view of the circular letter dated 27.3.2000 of the State Bank of Pakistan, institutional investment in the National Saving Scheme was stopped. Accordingly, on 17.7.2000 the appellants were directed to deposit the decretal amount with the Deputy Registrar (J). An amount of Rs.11500,717/- was deposited accordingly and Defence Saving Certificates for Rs. 11500,500/- were purchased. These Will be encashed. The consultant will be entitled to the amount of Rs.
26,05431/- alongwith the profit thereon while the rest of the amount with profit will be returned to WAPDA.
37. This appeal is allowed in above terms. The record of the case shall be immediately returned to the learned Trial Court.