2023 M L D 974
[Balochistan]
Before Muhammad Kamran Khan Mulakhail and Shaukat Ali Rakhshani, JJ
Haji ZAHIR KHAN--- Petitioner
Versus
MURAD ALI and others ---Respondents
C.P. No. 1475 and Civil Revision No. 495 of 2020, decided on 16th September, 2022.
Arbitration Act (X of 1940) ---
----Ss. 14, 30 & 33---Arbitration award ---Objections ---Misconduct of arbitrator,
determination of --- Jurisdiction of Court --- Scope ---Concurrent findings of two Courts
below ---Petitioner assailed arbitration award and order d ismissing objections filed by him on
the plea of misconduct of arbitrators ---Neither any specific allegations of misconduct figured
in objection filed by petitioner, nor was it reflected in evidence adduced except an assertion
that he did not expect justic e from arbitrators ---Such assertion did not, in any way, absolve
him or give a way to escape from arbitration agreement, which he at his free will had entered with respondent ---Proceedings carried out by arbitrators were quasi -judicial proceedings ---
Court while parting with the objections or making award as rule of Court could not sit as
court of appeal looking into nitty gritty of proceedings and arbitration award---High Court declined to interfere in concurrent findings of facts of fora below, which did not suffer from any illegality or infirmity making the same to be unjust and unreasonable ---Constitutional
petition was dismissed, in circumstances.
Province of Punjab v. Mian Muhammad Saleem & Co. 1985 SCMR 1215; President
of Islamic Republic of Pakistan v. Tasneem Hussain Naqvi 2004 SCMR 590 and Mian
Corporation v. Lever Brothers of Pakistan Ltd. PLD 2006 SC 169 ref.
Adnan Ejaz Sheikh for Petitioner.
Muhammad Riaz Ahmed for Respondents.
Date of hearing: 15th August, 2022.
JUDGMENT
SHAUKAT ALI RAKHSHANI, J. ---Petitioner has brought in Constitutional
Petition No.1475 and Civil Revision Petition No.495 of 2020, assailing a common order dated 3rd November 2020, whereby Arbitration Appeal No.60 of 2019 and Civil Revision Petition No.02 of 2019 filed by the petitioner were dismissed.
As the lis in hand is knitted with a similar thread of factual and legal controversies,
therefore, the captioned petitions are decided through this consolidated judgment.
2. Concise and germane facts are that the petitio ner having a firm by the style 'Zahir
Khan and Brothers' ("ZKB") was awarded a Project of Hub -Uthal Road, which was
completed through different petty contractors by the petitioner, for which, earth- soil was
utilized. However, a controversy arose between th e petitioner and respondent regarding levy
of excise and royalty tax, thus, the parties to the lis with mutual consent and freewill vide
agreement dated 10th May 2010 (Ex.A/2) entered into an agreement of arbitration, whereby four arbitrators namely Haji F azal Qadir Sherani, Haji Abdul Wahid, Malak Zafar Latif and
Malik Salahuddin were appointed as arbitrators with the mandate to resolve the issue of an amount relating to levy of excise and royalty tax of the said Project. The arbitrators after due deliberation and consultation on 28th June 2010 rendered the award (Ex.A/3) unanimously in favour of the respondent.
However, it is the claim of petitioner that he revoked the arbitration agreement dated
10th May 2010 by filing an application dated 24th June 2010 (Ex.A/4) way before the
Arbitration Award was rendered and pronounced.
3. Petitioner being dismayed with the Arbitration Award filed an application- objections
under sections 30 and 33 of the Arbitration Act, 1940 for setting aside the Arbitration Award dated 28th June 2010, whereas respondent filed an application under section 14 of the Act
ibid to make the said award as rule of the court, which was contested by the parties, which led the Trial Court to frame the following issues;
"1. Whether the applicati on is not maintainable in views of legal objection "A", "B" of
rejoinder?
2. Whether the applicants have not been properly heard, while passing the award dated 28.06.2010 and misconducted the arbitration proceedings?
3. Whether the arbitration award dated 28.06.2010 is null void and of no legal effect? OPP
4. Whether the applicants are entitled to the relief claimed for?
5. Relief?
The petitioner produced AWs Shahid Iqbal, Muhammad Aslam Zehri, who produced certificate dated 2nd July 2010 (Ex.A/1), one of t he arbitrators Abdul Wahid, who produced
application dated 24th June 2010 (Ex.A/4) and petitioner got recorded his statement, whereas, on the other hand, respondent produced Fazal Qadir Sherani, who produced arbitration agreement dated 10th May 2010 (Ex.A/ 2) and Arbitration Award dated 28th June
2010 (Ex.A/3) and got recorded his own statement.
4. The Trial Court, while concluding the trial pronounced a consolidated order dated
29th June 2012, whereby the application- objections filed by the petitioner was d ismissed,
whereas application filed by the respondent for making the award dated 28th June 2010 as
rule of the court was accepted, following a decree thereof. Petitioner being aggrieved
preferred an appeal as well as a revision petition before the Addition al District Judge -IX,
Quetta. On 3rd November 2020, the appeal filed under section 39 of the Arbitration Act, 1940 and Civil Revision Petition filed under section 115, C.P.C. were dismissed for being devoid of merits.
5. Learned counsel for the petitioner inter alia contended that both the fora below have
failed to appreciate the evidence produced by him in its true perspective, ignoring the application (Ex.A/4) pertaining to revocation of arbitration agreement as well as the testimonies of the a rbitrators Abdul Wahid mentioned as AW -4 and as such on this ground
alone the impugned judgments of both the courts below requires to be declared as null and void, illegal, in excess of authority and jurisdiction.
Conversely, learned counsel for the respo ndent vigorously controverted the
contentions so put forth by learned counsel for the petitioner. Added further that the arbitration agreement has not been disputed at any stage, whereas the Arbitration Award dated 28th June 2010 has been rendered by the a rbitrators unanimously as evident that the
signatures of all the four arbitrators figures thereon, which was not controverted at the relevant time, but, subsequently, the petitioner came up with a cooked up story of filing an application for revocation of the arbitration agreement, therefore, requested for dismissal of
the captioned petitions for the same being devoid of merits.
6. Heard. Record pondered upon with the able assistance of learned counsel for the
adversarial parties. Coming to the admitted facts first, it may be observed that there exists monetary dispute regarding an amount of Rs.7,77,36000/ - pertaining to levy of excise and
royalty tax, whereof the parties to the lis entered into an amicable settlement by executing an agreement of arbitration dated 10th May 2010 (Ex.A/2), but controversy arose when the
Award in question was rendered by the arbitrators, which was not accepted claiming that the petitioner vide application dated 24th June 2010 (Ex.A/4) revoked the arbitration agreement dated 10th May 2010.
7. Petitioner resorted to the remedy available under sections 30 and 33 of the Arbitration
Act, 1940 challenging the locus standi of the arbitrators and the award rendered by them. Section 30 provides grounds for setting aside an award that whe re an arbitrator or an
employer exposes himself to misconduct or to the proceedings of the arbitration or in a case where an award has been made after passing of a court order, superseding the arbitration proceedings, whereby proceedings have become invali d as enunciated under section 35 of
Arbitration Act, 1940 or when an award has been procured improperly or is otherwise invalid. Section 33 pertains to a remedy before the court, challenging the very existence or validity of an arbitration agreement. For ease of reference section 33 is as infra;
"33. Arbitration agreement or award to be contested by application. Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of
either determined shall apply to the Court and the Court shall decided the question on affidavit:
Provided that where the Court deems it just and expedient, it may set down the
application for hearing on other evidenc e also, and it may pass such orders for
discovery and particulars as it may do in a suit."
8. We have cautiously with all care have minutely examined the claim and evidence of
the petitioner. Shahid Iqbal (AW -1) is an engineer in the company of the petitio ner, who
testified that in the year 2007, a Project of Hub -Uthal Road commenced and ended in April
2009 and the A -4 soil was used, whereupon no tax is leviable, however, admitted that a
dispute arose and to settle the controversy, arbitrators were appointe d by the petitioner and
the respondent. According to him, the decision made by the arbitrators was unjust as they did not call any person as witness including an expert. During cross -examination, he admitted
that he did not read the terms of the contract arrived at between the petitioner and respondent and that A -4 soil is known as silty soil. He knew the names of two arbitrators Fazal Qadir
and Abdul Wahid, but did not know about the remaining two arbitrators. He was also unaware as to when the award was p ronounced and was ignorant too as to whether the award
was registered or not. Muhammad Aslam Zehri (AW -2) Deputy Director NHA produced
certificate (Ex.A/1) pertaining to the use of A -4 soil -material in the Project of Hub -Uthal
Road. Abdul Wahid mentioned a s AW -4, who was one of the arbitrators, stated that he along
with Malik Zafar, Malak Salahuddin and Fazal Qadir Sherani were appointed as arbitrators, but, the petitioner submitted an application for including some other persons as well in the arbitration process, which he received and identified his signatures at the back of the said
application and produced the same as Ex.A/4. He admitted that the parties have appointed all three arbitrators at their own freewill. He showed ignorance as in whose presence he received the said application, however, admitted that none of the other arbitrators were present at that time and that he did not take any receipt of delivery of the application. He admitted that he had signed the award besides the other arbitrators. In application (Ex.A/4) dated 24th June
2010 only the signature of arbitrator Abdul Wahid has been found scrawled. He scrawled his signatures upon the award in question, which belies him in respect of submission of said application by the petitioner. There i s no evidence as to where the said application was safely
placed by arbitrator Abdul Wahid, more particularly, without showing it to the other arbitrators, whereof the petitioner has failed miserably. Besides, the admissibility of the application for revoking the arbitration is questionable agreement because same was to be proved as enunciated under the provisions of Chapter -V of Qanun- e-Shahadat Order, 1984,
but in vain. Statement of petitioner Zahir Khan though was on similar lines as mentioned by him in his application -objections, but he admitted appointing the aforesaid arbitrators
through an arbitration agreement dated 10th May 2010. Arbitrator Haji Fazal Qadir Sherani (AW -3) appearing on behalf of respondent Murad Ali appeared and testified to have bee n
appointed along with Malik Zafar, Malik Salahuddin and Haji Abdul Wahid as arbitrators through arbitration agreement dated 10th May 2010 (Ex.A/2); following an Arbitration Award dated 28th June 2010 (Ex.A/3) and scrawling of signatures by all the four ar bitrators
unanimously upon the award in question. The excerpt of the award ibid is as infra;
Haji Abdul Qadir Sherani (AW -3) during cross -examination denied to have not rendered a
correct award. He categorically denied that petitioner Haji Zahir through an application
asked him to consult an expert. Respondent Murad Ali in his statement reiterated his claim
with regard to the controversy of outstanding amount against the petitioner, appointment of
the nominated arbitrators vide arbitration agreement dated (Ex.A/2) and award (Ex.A/3).
During cross -examination, he denied the stance of the petitioner that an application dated
24th June 2010 was given to the arbitrators that he has no trust in them to get justice and that the award is unjust. The relevant portion of the application is reproduced hereunder;
9. After scanning the above evidence in view of the judgments rendered by both the fora
below, we have observed that neither any specific allegations of misconduct figures in the
objections filed by the petitioner nor reflects in the evidence adduced by the petitioner except
the assertion by the petitioner that he does not expect justice from the arbitrators, which does
not in any way absolve him or give a way to escape from the ar bitration agreement, which he
at his freewill had entered with the respondent. Reliance can be placed upon the cases "Province of Punjab v. Mian Muhammad Saleem & Co." (1985 SCMR 1215), "President of
Islamic Republic of Pakistan v. Tasneem Hussain Naqvi" ( 2004 SCMR 590) and "Mian
Corporation v. Lever Brothers of Pakistan Ltd." (PLD 2006 SC 169). Relevant excerpt of
Province of Punjab's case is reproduced herein below;
"The only question in issue between the parties was "whether the arbitrator has
misconduc ted himself". All the Courts dealing with the question have on the factual
and legal plane found out concurrently that no case of misconduct was made out. What was established during the proceedings was only a typographical error which was corrected by the Courts. In other respects, the award was found not liable to
interference by the Court. The submissions made by the learned counsel for the petitioner do not make out to be a case of misconduct such as may vitiate the award
itself. No question of law aris es in the petition which may require further examination
in this Court. Leave to appeal is, therefore, refused."
[Emphasis is ours]
It may also be observed that the proceedings carried out by the arbitrators are quasi -judicial
proceedings and the court whi le parting with the objections or making the award as rule of
the court may not sit as a court of appeal, looking into the nitty- gritty of the proceedings and
the Arbitration Award.
Whereas, in the case of Mian Corporation para -7 is reproduced hereunder;
"7. Learned counsel attempted to persuade us to examine the merits of the claim of
the petitioner involving disputed questions of Fact. It is well -settled that the arbitrator
acts in a quasi -judicial manner and his decision is entitled to utmost respect a nd
weight, unless the misconduct is not only alleged, but also proved against him to the satisfaction of the Court. The arbitration award may however, be discarded, if the findings are contrary to law and the material on record. Learned counsel has been unable to pinpoint any inherent legal infirmity or defect or want of jurisdiction on the part of the arbitrator who has elaborately dealt with the claim of the petitioner in minute details with reference to the explanation furnished by the respondent -
Company . Suffice it to observe that while examining the award, the Court does not sit
in appeal over the award and has to satisfy itself that the award does not run counter to the settled principles of law and the material available on record. Indeed, a arbitrato r is final judge on the questions of law and facts and it is not open to a party
to challenge the decision, if it is otherwise valid. If an IB arbitrator has made an award in terms of the submissions made before him, no adverse inference can be drawn again st him. An award cannot be lawfully disturbed on the premise that a
different view was possible if the facts were appreciated from a different angle. In
fact Court while examining the correctness and legality of award does not act as a court of appeal and cannot undertake reappraisal of evidence recorded by a arbitrator in order to discover the error or infirmity in the award. Learned counsel for the respondent has referred to Pakistan Steel Mills Corporation v. Mustafa Sons (Pt.) Ltd. PLD 2003 SC 301, whic h fully supports the impugned judgment as well as the view
taken by us in this petition."
[Emphasis supplied]
10. Petitioner also failed to assert that which arbitrator was carrying what bias, whereby,
the petitioner formed an opinion that he does not expe ct justice, besides the fact that he also
miserably failed to prove that the application dated 24th June 2010 containing his concern was conveyed to all the arbitrators through a valid proved application because its safe custody and not being afterthought instrument is questionable and inadmissible, more
specifically not proved as well.
11. It is regretfully observed that the arbitration agreement dated 10th May 2010 and
award was rendered on 28th June 2010, but the parties to the lis had been knocking the doors of the courts since last twelve (12) years and as such instead to non- suit a party on technical
premises, substantive justice requires to be parted with.
The award as well as concurrent findings of the fora below has been gone through by
us, which do not suffer from any illegality or infirmity, making the same to be unjust and
unreasonable.
In the light of above discussion, the captioned petitions being bereft of the merits are
dismissed with no order as to cost.
MH/22/Bal. Petition/Revision dismissed.This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
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