P L D 1994 Lahore 40 (PLP)

This is an appeal against order dated 9‑1‑1989 of the learned Civil Judge 1st Class, Jhelum, whereby he declined to make the award rendered by the arbitrators rule of the Court on the ground that as they arbitration agreement had not been stamped, it could not have been acted upon nor could any arbitration award be rendered in the proceedings, which had commenced on the basis of such an unstamped arbitration agreement.

2. Learned counsel for the appellant in support of this appeal, relying upon the judgment of the Supreme Court in Union Insurance Company of Pakistan Limited v. Harz Muhammad Siddiq PLD 1978 SC 279 contends that neither the award nor the proceedings for arbitration could be set aside only on the basis that the arbitration agreement was not stamped. This contention of learned counsel for the appellant is well founded and is fully supported by the precedent relied upon by him.

3. Learned counsel for the respondent did not dispute this proposition. He has, however, stated that there are other grounds available on the basis of which the impugned order refusing to make the award rule of the Court can be sustained. In this respect, it was elaborated by the learned counsel that though only 8 persons had been appointed as arbitrators but the award was signed by 9 persons. It was also emphasized that the claim of the appellant was barred by time. He further argued that it was the duty of the Court itself to have considered this aspect of the matter. In the last, an objection was also raised that this appeal was not competent.

4. Learned counsel for the respondent has pointed out that the appellant had twice filed objections to the award, which were rejected as being barred by time and, therefore, no objection to the validity of the award can now be entertained. He also submitted that after the rejection of the objections, there was no occasion for the trial Court to take upon its suo motu examination of the award in order to find out as to whether the same suffered from any defect or not. The learned counsel has also argued that the appeal was competent as according to him, the order had the effect of setting aside the award and was, therefore, appealable

5. Taking up the objection as to maintainability of. this appeal, a reference to section 39 of the Arbitration Act, 1940, would show that under clause (vi) thereof, the order setting aside or refusing to set aside the award is appealable. Although the learned trial Court did not in so many words, say that the award was being set aside but its refusal to make it rule of the Court, E3 holding the same to be illegal can legitimately be construed as an order setting aside the award. There is, therefore, no merit is this objection raised by learned counsel for the respondent. Be that as it may, it would be a fit case for treating the appeal as a revision under section 115 of the C.P.C.

6. There is, however, considerable force in the contention raised by learned counsel for the respondent that notwithstanding that the objections filed by the appellant to the award had been rejected, it was the duty of the Court to examine as to whether or not the award suffered from any error patent on the face of it and to refuse to make it rule of the Court. The two questions which deserve consideration by the Court itself, according to the learned counsel, were (1) whether the award was signed by 9th person in addition to the eight who were mentioned in the arbitration agreement, and (2) whether the claim of the appellant was barred by time.

7. Learned counsel for the respondent explains that the name of the 9th person was omitted inadvertently from the arbitration agreement as the parties intended to appoint all the 9 persons as their arbitrators. The learned counsel has pointed out that no such objection was raised at any stage of the trial or even before the arbitrators.

8. So far as the limitation is concerned, it was contended that the claim was within time and further that as the so‑called defect was not apparent on the face of the award the award could not be set aside. As has been held by the Supreme Court on repeated occasions, while in the case of M/s. Awan Industries Ltd. v. The Executive Engineer, Lined Channel Division and another (1992 SCMR 65) it was duty of the Court to have examined the award to ensure that it does not suffer from any legal defect apparent on the face of it. As in the present case the award was not being made rule of the Court on a wholly untenable ground that the arbitration agreement was not stamped, this exercise was not undertaken by the !earned trial Court. That being so, it appears to be a fit case, which should be remanded to the learned trial Court. In view of what has been stated above, this appeal is allowed; the impugned order of the learned Civil Judge is set aside and the case is remanded to the learned trial Court for decision afresh in accordance with law. The parties are left to bear their own costs AA./M‑1270/1 Case remanded