P L D 1986 Karachi 21 (PLP)

The defendant has filed objections under section 30 of the Arbitration Act to this Award, dated 31st January, 1976 given by Mr. Rafi Ahmed as sole arbitrator in the dispute between the plaintiff and the defendants. Mr. Murtazallai has raised before me two-fold objections to the award. His first objection is that the plaintiff has filed a suit based on earlier award being Suit No.2262 of 1975 which is pending in the court of Ist civil Judge, Karachi. According to him this award relates to the same subject matter which was subject matter of reference on the basis of which the present award has been given. The second objection is that the sole arbitrator has acted illegally in awarding future interest from the date of the award till the date of payment. So far as the first objection is concerned the plaintiff has filed a counter affidavit explaining that the award in Suit No. 2262 of 1975 relates to the dispute which is not only between the plaintiff and defendants but there are also two other parties to the suit namely, Maqbool Ahmed and Messrs Hassanali and Company and they claim the subject‑matter of the award related to the sale of 1200 bales of Desi cotton on behalf of Hassanali & Company defendant 3 in that suit which were sold by the plaintiff on behalf of the defendants vide sale note, dated 19‑10‑1972, whereas they dispute which was referred to Mr. Rafi Ahmed relates to Commission Agency Business arising out of the agreement, dated 25‑10‑1972. According to Mr. Anis the subject‑matters of the two awards are different and distinct. Further, the award in Suit No. 2262 of 1975 was given in favour of Hassanali & Company and against the plaintiff and not against the defen dant in this suit. This position is not denied by Mr. Murtaza at the bar. I, therefore, find no substance in the first objection and overrule it. As regards the second objection according to Mr. Anis this objection has not been taken in the objections to the award. However, this is al legal objection I can go into it in view of the provisions of section 17 of the Arbitration Act as the error is apparent on the face of the award, and I am inclined to entertain it. According to the provisions of section 29 where and so far as the award is for payment of money, the Court is empowered while passing decree to award interest from the date of the decree at such rate as the Court deems reasonable. Therefore, it follows. that the arbitrator cannot award interest beyond the date of the decree, unless the reference includes a term granting the power to the arbitrator to grant future interest after the date of the decree. Reliance is placed upon a Division Bench judgment of erstwhile High Court of the West Pakistan (Lahore Bench) in Mahbuob Alam v. Mumtaz Ahmed (P L D 1960 (W. P.) Lah. 601) wherein their Lordships opined as follows :‑ "We are of the opinion that in the absence of any specific reference to an arbitrator on a question as to what interest is to be paid sub sequent to the passing of the decree, the arbitrator does not possess any authority to award post‑decree interest. His jurisdiction is limited by the terms of his reference. if the reference be to him only as to the liability of a person he can only determine that liability". I may also refer to a decision from the Indian jurisdiction given by the Punjab High Court in Pash Behari v. Anand Sarup Bhargava (A I R 1962 Punjab 51) wherein it was observed as follows "The fourth contention of MV. Sastri, however, seems to have a good deal of force. Under section 34 of the Civil Procedure Code the Courts have specifically been given powers to award future interest. An arbitrator, however, is not a Court and evidently the power given by section 34 to the Courts cannot be exercised by an arbitrator. The parties never referred the matter of future interest to the arbitrator and they had, in my opinion, no jurisdiction to award future interest from the date of the award till the date of realisation of the awarded amount. This is an obvious error on the face of the award but the award in this respect can be amended by modifying this part without affecting the other part of it. I would, therefore, modify the award to the extent that the clause with regard to the future interest will be taken out of the same and will have no operation". It is not claimed that the reference in the present case included a ter granting power to the arbitrator to award future interest beyond the date of the decree. Therefore, the arbitrator had no jurisdiction to award' interest beyond the date of the decree. Accordingly the award has to be modified so far as the future interest is concerned. 1t is not disputed that the Court has discretion so far as interest from the date of decree is concerned. Mr. M. Anis has no objection if no future interest is awarded provided, the defendant pays the decretal amount within six months. Mr. Murtaza is agreeable to this condition. I, therefore, dismiss the objections and make the award the rule of the Court subject however, to the above modification and direct that in case the defendant pays to the plaintiff the decretal amount within six months he will not be liable to pay any interest from the date of the decree otherwise, he will be liable to pay the interest at 11 per cent per annum on the decretal amount or such part thereof as is not paid within six months from the date hereof. A. A. Award made rule of Court.