2017 C L C 1298
[Balochistan]
Before Muhammad Ejaz Swati and Abdullah Baloch, JJ
GOVERNMENT OF BALOCHISTAN through Secretary Education Department ----
Appellant
Versus
Messrs CAMPAIGNER ASSOCIATES (PVT.) LTD. through Chief Executive and 2
others ----Respondents
R.F.A. No.22 of 2009, decided on 2nd May, 2017.
Arbitration Act (X of 1940) ---
----Ss. 20 & 33---Award by umpire made rule of the court ---Agreement between the parties for
completion of construction project ---Appointment of empire in wake of disagreement between
the parties to appoint Arbitrators and no objections was raised by the appellant (Provincial
Government) in the proceedings of the Court ---Scope ---Appellant/Provincial Government
contended that no claim of payment of extra work could be agitated as per the undertaking of the
respondent/contractor and thus award of the umpire was unjustified--- Respondent/contractor
contended that they completed work to the entire satisfaction of the Government but was denied
payment without reason---Respondent/contractor further submitted that the award by the umpire
was justified and the umpire was appointed with consent as parties had failed to appoint
Arbitrators ---Validity ---Record revealed that parties had suggested names of Arbitrators, but
agreement was not arrived at, thus under the circumstances, Trial Court with consent of the
parties nominated the umpire to make award independently within 30 days by providing
opportunities to both the parties in accordance with law ---Record further trans pired that both the
parties had put their claims before the umpire who, after hearing both the parties, passed award--
-Award was submitted before the Trial Court and the parties were directed to file their
objections, if any, however, counsel for the respondent appeared before the Trial Court and
raised no objection over the final award and despite of several opportunities, the appellant (State)
had failed to file any objections as required under S.33 of Arbitration Act, 1940---Said order of
the Trial Court was not assailed by the appellant before the appellate forum which attained
finality, as such, the contentions of appellant with regard to non- providing opportunity of filing
of objections was not tenable ---In view of provisions of S.33 of Arbitration Act , 1940 the
appellant had failed to comply with the provision of law ---Findings of the umpire showed that
the respondent/contractor had completed the work to the entire satisfaction of the department ---
Department had never raised any objection regarding the performance of work ---Contract
agreement being in existence, the work was completed on the instructions of Provincial
Government through its department, therefore, Government could not absolve itself from the
liability ---Impugned judgment and decree passed by the Trial Court did not suffer from
misreading or non- reading of evidence ---Appeal was dismissed accordingly.
Muhammad Saleem Baloch for Appellant.
Ms. Shehnaz Rana and Rehmatullah Barech for Respondent No.2
Date of hearing: 17th April, 2017.
JUDGM ENT
ABDULLAH BALOCH, J. --- This judgment disposes of R.F.A. No.22 of 2009 filed by
the Government of Balochistan Education Department, through Additional Advocate General
Balochistan, against the judgment and decree dated 28th February, 2009 (hereinafter referred as
"the impugned judgment and decree") passed by learned Civil Judge- V, Quetta (hereinafter
referred as "the trial Court"), whereby the Award dated 6th August, 2008 passed by the Umpire
was made as rule of the Court (hereinafter the Award dated 6t h August 2008 is referred as, "the
Award").
2. Facts of the case are that the respondent No.1 filed an application under Section 20 of the
Arbitration Act for arbitration award with the averments that the respondent No.1 is registered
Company under the Com panies Act, having its business under the name and style of M/S
Campaigner Associates (Pvt.) Ltd. 75- E Maulana Shaukat Ali Road, M.A. Johar Town Lahore;
that an agreement for completion of contract of project "Construction of Additional 6
Workshops, 6 Clas s Rooms and Hostel for 200 Students in the Government Polytechnic Institute
for Boys at Sariab Road, Quetta (Package No.2) was executed, whereafter the work was
completed to the entire satisfaction of the Engineer Incharge, who has been defined under the
terms and conditions of the agreement as M/S Unique Associates, who verified all the bills, but it
was unfortunate on the part of the appellant (Government of Balochistan) and other respondents
not to follow the terms and conditions of the agreement and denied the payments payable to the
respondent No.1. It is pertinent to point out that on different occasions the payments were
determined in favour of the respondent No.1, but the same were withheld without any reason and
rhyme, which is also disturbed flow of finance for the execution of the job, resultantly the
respondent No.1 was left with no alternate, but to invoke the jurisdiction of this Court in C.P.
No.1114/1999, which petition was disposed of vide judgment dated 19th April, 2000 in the
following terms:
(i) The agreed amount regarding which there is no dispute at the moment be paid to
the petitioner.
(ii) For disputed amount the mechanism provided in the contract agreement be
followed.
(iii) The work shall not be discontinued/suspended without following the provisions
contained in Clause 55 of the contract.
(iv) In view of the serious apprehensions of Project Director that petitioner may not
complete the Project after getting the amount in question could be met by obtaining
surety in accordance with con tract agreement.
(v) The requisite certificate for the work done which is not disputed shall be issued
without further loss of time.
(vi) The bid price package No.1 and package No.2 shall remain within the agreed
limits of Rs.61,433,439.58 and Rs.55,455,399.66 respectively and it shall have not
bearing on the extra work done by the petitioner with the mutual consent of the
respondents, but total price shall not cross the limits of Rs.61,433,439/58 and
Rs.55,455,399/66 (excluding extra work)."
The respondent No.1 further averred that in compliance with the above order, he
followed the procedure laid down under the agreement and on 28th September 2004 served a
legal notice to the appellant with the request for appointment of the Arbitrator on the panel of the
Arbitration Committee and the respondent No.1 suggested his nominate as Mr. M.M. Chandion,
Ex-Chief Engineer, House No.12 Mehran House near citizens Colony, Hyderabad, but the
appellant and the respondent No.2 did not rise to the occasion with the target period of the notice
to appoint their nominee. The respondent No.1 prayed for appointment of the Arbitrators in the
following terms:
a. Payment under the B.O.Q. items amount to Rs.5,948,869.65
b. Extra Payment for new items amounting to Rs.3,448,843.57 cropped up during
the execution of the job for which no rate was available.
c. Compensation at the rate of 16% per annum for delaying the payment actually
done to the petitioner till the filing of this application for Rs.14,703,233.11.
d. During the execution of the job on different occasions the work was stopped and
the petitioner had to suffer losses on account of overhead charge and Idle T&P for
Rs.3,541,457.30.
e. Loss sustained by the petitioner amounting to Rs.751,600.00 due to incident on
08.10.2001 wit hin the premises of the job in question.
f. Litigation charges.
g. Any other claim at the time of arbitration proceedings.
In the last the respondent No.1 prayed that:
(a) The respondent No.2 may kindly be directed to file the agreement for the work in
dispute in this Court.
(b) The respondents may kindly be directed to nominate their nominee on the panel
of the Arbitration Committee and the nominee so nominated along with the nominee of
the petitioner, may kindly be appointed as arbitrators to adjudicate upon the dispute and
file the award in this Court on the date fixed by this Court.
3. It appears that, the appellant filed rejoinder to the application and contested the same.
After filing rejoinder, the parties were directed to file the names of their resp ective arbitrators, to
which both the parties suggested the names of different arbitrators, but no agreement was arrived
at, thus under the circumstances, the trial Court with the consent of both the parties nominated
Mr. Sakhi Sultan, Advocate Supreme Court as Umpire, to make award independently within 30 -
days after providing opportunities to both the parties in accordance with law. In pursuance of
such order, the parties have put their award and facts before the umpire, who after hearing both
the parties passed a common award dated 6th August 2008, the relevant portion is reproduced
hereinbelow:
"In view of the facts and circumstances explained hereinabove, the Contractor is entitled
to their relief claimed for, except the amount of loss being occurred due to the law and
order situation and the award is given in the following manner:
S.No. Description of claim. Amount of Claim
1. Payment of B.O.Q.
Items (less paid/Not
paid) Rs.9,359,433.09
2. Extra Works. Rs.3,141,740.14
3. Use of SR Cement. Rs.283,182.00
4. Loss occurred due to
the law and Order
situation Not entitled.
5. Idle Charges suspended
period Rs.6,738,398.15
6. Interest on delayed
payments Rs.1,78,00,863.00
7. Compound Interest. Not entitled.
Grand total of claim Rs.3,73,23,516/ -
4. After passing of final award by Umpire, the same was filed before the learned trial Court,
hence the parties were directed to file their objections, if any, to which the learned counsel for
the respondent No.1 appeared before the Court and raised no objection over the final award,
while despite several opportunities the State has failed to file any such objection. Hence, under
the circumstances the Award dated 6th August 2008 was made as Rule of the Court, vide
impugned judgment and decree dated 28th February 2009.
5. Learned Additional Advocate General contended that Arbitration Award passed by
Arbitrator Malik Abdul Rauf and umpire Sakhi Sultan, Advocate have failed to consider the facts
and circumstances of the case; that the app ellant specifically raised objections in his rejoinder;
that he was not a party to the agreement as agreement was executed between respondents Nos.1
and 2, but this point was not considered by the Arbitrator, umpire, as well as by the learned trial
Court; that the Arbitrator, umpire and the learned trial Court have failed to consider the facts of
the case; that the respondent No.1 has given undertaking through written reference in which he
stated that he will not claim payment of extra work, but in spite of this fact no one considered
this point; that the umpire was appointed by the learned trial Court without the consent and
permission of the appellant; that according to clause 21- 1 of the agreement executed between the
parties, in which it was decided that all the disputes arising in connection with the present
contract and which cannot be amicably settled between the parties, shall be finally settled under
the rules of conciliation and arbitration of international chamber of commerce by one or more
arbitra tors appointed in accordance with rules; that all the work which was completed by the
contractor and payment of that work has been paid to the respondent No.1 and the award is not
sustainable; that the Arbitration Award was made as rule of Court by the lea rned trial Court in a
hazard manner which resulted in miscarriage of justice; that there are sufficient illegalities and
irregularities in the award which is liable to be set aside.
6. Conversely, the learned counsel for the respondents strongly opposed the arguments so
advanced by the learned counsel for the appellant and contended that the respondents had carried
out the entire contractual work according to contract agreement executed between the parties;
that the appellant have failed to discharge their liabilities; that the appellant was approached by
the respondents for settlement of dispute through amicable settlement and arbitration, but the
appellant delayed the matter by one pretext or the other; that ultimately the respondents after
issuing legal n otice to the appellant and on failure of reply of the same the respondents have filed
an application in the Court for appointment of arbitrators, which was contested by the appellant
and with consent of the parties the learned trial Court nominated Mr. Sakhi Sultan, Advocate as
umpire to make award independently; that the umpire was appointed with the consent of the
appellant and thereafter the award was passed; that the appellant have failed to file objections on
the award made by the umpire; that the lear ned trial Court had rightly made the award as rule of
Court.
7. Heard the counsel for the parties and perused the record with their valuable assistance the
record reveals that the dispute as stated above arose between the parties, initially the parties
approached this Court under C.P No. 1114 of 1999, however, the petition was disposed of vide
Judgment dated 19th April, 2000 with certain terms as stated above in para No.2 and in
compliance of the said order the respondents have issued a legal notice to the appellant with the
request for appointment of arbitrator on the panel of arbitration Committee and respondent No.1
suggested his nominate as Mr. M.M. Chandio ex Chief Engineer, but the appellant and
respondent No.2 did not rise to the occasion with the tar get period of notice to appoint their
nominees.
8. The record further reveals that due to failure of the appellant and respondent No.2 the
respondent No.1 filed an application before the Arbitration Court for appointment of Arbitrator
on the terms and conditions given therein; it is further transpired from the record that the said
application was contested by the appellant by means of filing rejoinder and thereafter the parties
were directed to file the names of their respective Arbitrators, to which both t he parties suggested
names of different Arbitrators, but no agreement was arrived at, thus under these circumstances,
the learned trial Court with consent of the parties nominated Sakhi Sultan, Advocate Supreme
Court as umpire to make award independently w ithin 30 (Thirty Days) days after providing
opportunities to both the parties in accordance with law. The record further transpires that both
the parties have put their claims before the umpire who after hearing both the parties passed a
common award on 6t h August, 2008.
9. The record further indicates that the award was submitted before the learned trial Court
and the parties were directed to file their objections, if any, however, the learned counsel for the
respondent No.1 appeared before the trial Court and raised no objection over the final award,
while despite of several opportunities, the appellant (State) has failed to file any such objections
as required under Section 33 of Arbitration Act, 1940. For convenience relevant provisions of
Section 33 of Arbitration Act, 1940 is reproduced as under: -
"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 ag reement or an award or to have the effect of
either determined shall apply to the Court and the Court shall decide the question on
affidavits:
Provided that where the Court deems it just and expedient, it may set down the
application for hearing on other e vidence also, and it may pass such orders for discovery
and particulars as it may do in a suit."
10. We have also consciously observed that despite several opportunities the State counsel
was failed to file objections over the award despite of the fact tha t it reflects from the order sheet
dated 5.09.2008 of the trial Court last opportunity was afforded to the D.A for State for filing of
objections on the next date fixed for hearing i.e. 20.9.2008 and order sheet dated 20.9.2008
shows that the D.A was prese nt and failed to file objections and sought further time for filing of
objections which was opposed by the other side and ultimately the right of appellant was struck
off for filing of objections.
11. The record further reveals that the said order was not assailed by the appellant in the
appellate forum which attained finality, as such, the contentions of learned counsel for the
appellants with regard to non- providing opportunity of filing of objection is not tenable and in
view of the provisions Section 33 of Arbitration Act the appellants have failed to comply with.
12. The perusal of Arbitration Award passed by the learned Arbitrator indicated that after
proper opportunity of hearing and participation of parties the learned Umpire had rightly passed
the award in accordance with law and thereafter the same award was made as rule of Court in
accordance with law wherein the parties were represented by their counsel and the appellant was
duly represented by the learned District Attorney namely Ms. Farhat Shameem, as such the
appellant cannot say the judgment and decree was passed by the learned trial Court in their
absence.
13. According to findings of the umpire the Contractor/respondents has completed the work
to the entire satisfaction of the department and the department never raised any objection
regarding the performance of work, since the contract agreements are in existence and the work
was completed on the instruction of Government of Balochistan through Education department,
therefore they cannot absol ve themselves from the liability simply on the ground that the project
in question has been wound up. The work so carried out by the respondents they are entitled to
relief claimed for. The learned Additional Advocate General has failed to point out any ma terial
illegality or irregularity in the impugned judgment and decree passed by the learned trial Court.
In view of the above discussion we are of the considered view that the impugned
judgment and decree passed by the learned trial Court does not suffer from misreading and non-
reading and mis -appreciation of evidence, neither ridiculous nor perverse or suffers from any
infirmities to be interfered by this Court, as such the appeal is devoid of merits and is hereby
dismissed. The parties are directed to bear their own costs.
MQ/77/Bal. Appeal 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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