P L D 1971 Lahore 693 (PLP)

(e) where the parties or the arbitrators are required to appoint an umpire and do not appoint him; any party may serve the other parties or the arbitrators, as the case may be with a written notice to concur in the appointment or appointments or in supplying the vacancy. (2) If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties." It is to be read with section 9, which reads as follows :‑ "

9. Power to party to appoint new arbitrator or, in certain cases, a sole arbitrator.‑Where an arbitration agreement provides that a reference shall be to two arbitrators, one to be appointed by each party, then, unless a different intention is expressed in the agreement . . . . . (a) if either of the appointed arbitrators neglects or refuses to act, or is incapable of acting, or dies, the party who appointed him may appoint a new arbitrator in his place ; (b) if one party fails to appoint an arbitrator, either origi nally or by way of substitution as aforesaid, for fifteen clear days after the service by the other party of a notice in writing to make the appointment, such other party having appointed his arbitrator before giving the notice, the party who has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator in the reference, and his award shall be binding on both parties as if he had been appointed by consent: Provided that the Court may set aside any appointment as sole arbitrator made under clause (b) and either, on sufficient cause being shown, allow further time to the defaulting party to appoint an arbitrator or pass such other order as it thinks fit. Explanation.‑The fact that an arbitrator or umpire, after a request by either party to enter on and proceed with the reference, does not within one month comply with the request may constitute a neglect or refusal to act within the meaning of section 8 and this section." Both these sections are to be further read along with section 25, which falls in Chapter IV of the Act and reads that, "the provisions of the other Chapters shall, so far, as they can be made applicable apply or arbitrations under this Chapter", which deals with arbitrations in suit (as is the case here) and goes on to say, "provided that the Court may, in any of the circumstances mentioned in sections 8, 10, 11 and 12, instead of filling up the vacancies or making the appointments, make an order superseding the arbitration and proceed with the suit, and where the Court makes an order superseding the arbitration under section 19, it shall proceed with the suit."

4. A perusal of section 3 will show that it applies to such cases where the arbitrator or arbitrators are to be appointed by consent of all parties and not to those where each party is to appoint his own arbitrator. Clause (a) of subsection (1) of section 8, deals with cases of omission to make initial appoint ments, whereas clause (b) covers cases where appointed arbi trator neglects or refuses to act or is incapable of acting or dies. But the common feature of both these sub‑clauses is that the nature of the agreement should be such where the concerned arbitrator or arbitrators are to be appointed with consent of all parties. This is more clear from subsection (2), where it is written that, " . . . . . . the Court may, . . . . . appoint an arbitrator or arbitrators, . . . . as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties". This shows that in cases where any arbitrator was to be appointed by the parties collectively, then on their failure to do so, when Court itself makes an appointment, it is to be considered that the appointee has been appointed by consent of all parties, there was difference of opinion in some case‑law, rendered with reference to the earlier Arbitration Act on the point as to whether clause (b) of subsection (1) of section 8, or as a matter of fact the whole of section 8, referred to the case of a single arbitrator or also covered cases where more than one arbitrators were to be appointed. In Gopaljl Kuverji v. Murarji Jeram Naranji and another (I L R 43 Born. 809), Uttamchand Brijlal v. Balmokand S. L. (A I R 1929 Sind 55) and Ramji Purshotam v. Hari Shamla (A I R 1939 Sind 81), it was held that it covered cases of agreement pertaining to a single arbitrator, while in General Electric Trading Co. v. Siemens (Ind.) Ltd. (I L R 56 Cal. 848), it was held to the contrary N. D. Basu in his Book "The Arbitration Act" (Third), 1955‑Edition while taking note of this controversy at p. 141, write as follows :‑ " . . . . . . . To avoid that interpretation‑-- (namely, it applies to cases of agreement pertaining to a single arbitrator) (the bracket is mine)‑the word `any' has been substituted for the word an. It now means that if one of two arbitrators neglects, refuses to act etc., this clause is applicable."

5. In the report of the Select Committee concerned with the vetting of the relevant Bill of the Act of 1940, it is written as follows :‑ "We have removed an obscurity from clause 8(1)(a) where it was not clear whether a failure to concur in any one of the appointments or failure to concur in all the appointments was contemplated. We have omitted the words or is removed from clause 8(1)(b) and also from clause 9(a) to remove the inconsistency which would otherwise exist between these clauses and clause 12, which gives to the Court and not to the parties power to appoint arbitrators in place of arbitrators removed by the Court. In sub‑clause (2) we have extended the time for making an appointment to fifteen days from the service of notice under sub‑clause (1)." This shows that the view that section 8 covered cases of a single arbitrator may not now be correct but the position that the arbitrator whose vacancy is to be filled up shall be such who was or was to be appointed by all parties (and not by one party alone), remains the same. From that point of view, on the facts of this case, it can safely be held, that since Ch. Muhammad Hussain was an arbitrator of one side only (and not of all parties) therefore, section 8 was not attracted here.

6. Though we have differed on the legal plane from the view of the learned Single Judge vis‑a‑vis the applicability of section 8 of the Act, the net result remains the same, namely, that the awards have rightly been set aside and there is no justification to admit this Letters Patent Appeal which is not likely to yield any fruit to the appellants. Learned counsel for the appel lants submitted that we should give a direction‑ to the learned trial Court for proceeding further in the matter because accord ing to him, in the absence of any such direction, in the order of the learned Single Judge, the learned trial Court may not be prepared to take up the case or proceed further with it. The apprehension of the learned counsel is unfounded because the reference to arbitrators was in a pending suit under Chapter IV of the Arbitration Act and the case shall have to be concluded either through arbitration (if so warranted) or through Court in accordance with the relevant law on the subject. No express direction In this respect is called for on our part and even the parties shall be at liberty to invoke the Court's jurisdiction for adopting whatever course they wish to be adopted, and if any applications are made in that behalf, the same shall be dealt with by the trial Court in accordance with law. The appeal is dismissed in limine. . K. B. A. Appeal dismissed.