1997 PLP 503 (CLC)

2. On 11‑5‑1993, the petitioner filed an earlier petition before this Court under section 8 of the Arbitration Act, 1940 (J. Misc, 27/1993), which was granted vide judgment dated 23‑2‑1994 by this Court, through which respondent No.2 was appointed as Sole Arbitrator. Following is the operative portion of the said judgment:

3. The case of the petitioner is that the Arbitrator was required to give Award within the prescribed period of four months, which ended on 23rd February, 1994 but no Award was given, thereafter time was extended for the next four (4) months, which also expired on 19th November, 1994 but again no Award was given, According to the petitioner the proceedings have not yet been concluded and one of the cause for delay attributed to the Arbitrator is that he has granted several adjournments to the respondent No. I for cross‑examination and thereafter, for filing written arguments, The next ground for removal of the Arbitrator is that he has committed misconduct by not disclosing the fact 0 that he has earlier dealt with the matter in dispute on behalf of the Chief Engineer, K.D.A. In view of this background of facts, the petitioner has prayed for the following reliefs:‑‑ (a) The respondent No.2 be removed. (b) That another Sole Arbitrator be appointed in this matter to commence the arbitration and give an Award. (c) Costs. (d) Such other relief as this Hon'ble Court may be pleased to grant in the circumstances of this matter.

4. The respondent No.2 has not fled any objection or counter‑affidavits to the main petition, However, defendant No. 1 has filed its counter‑affidavit to the application under Order XXXIX, Rules 1 and 2, C.P.C., submitted by the plaintiff, wherein it is stated that the arbitration proceedings have been concluded and the case is reserved for pronouncement of Award; that the petitioner has participated in the arbitration proceedings even after expiry of the stipulated period but no such objection was raised by him before the Arbitrator; that the instant proceedings may be dismissed with costs. The petitioner has denied the averments of the counter‑affidavit of the respondent No. l ,through its affidavit‑in‑rejoinder.

5. I have heard Mr. A.F.M. Mokarim, for the petitioner and Mr. Naziruddin A, Qazi, for respondent No.

1. The first contention of Mr. A.F.M, Mokarim, is that the Sole Arbitrator is liable to be removed in view of the fact that he has misconducted by not disclosing the fact that he has previously worked for the respondent No. 1, namely, K.D,A. In this regard he has referred to the case of M.A. Ghani Soofi & Sons v, The Federation of Pakistan (PLD 1957 (W.P.) Lahore 363), where it was held by a learned Single Judge of Lahore High Court, Mr. B.Z. Kaikaus, J. (as he then was) that known interest of an arbitrator does not in any way invalidate its appointment. It was further held that it is only in case where such an interest was concealed at the time, of appointment of an arbitrator or it comes into existence after the appointment which make the appointment invalid or liable to be revoked. (For further reference see the cases of Jubilee Chamber of Commerce Ltd. v. Amrit Sha (AIR 1940 Lah. 180), Mc‑Kanzies Ltd. v. Sulleman & Co. (AIR 1932 Sind 75), Mulchand Sobhraj v, Radakishin Parumal (AIR 1926 Sind 27), Parhathamma v. Subbamma (AIR 1935 Mad. 349) and Eckersley v. Mersey Docks and Harbour Board ((1894) 2 QB 667)). In the present case the respondent No.2 was appointed in the previous proceedings i.e. J, Misc. 27 of 1993, filed by the petitioner, the relevant portion of the judgment dated 23‑2‑1994, passed in the said J, Misc, has already been reproduced hereinabove, which indicates that the Arbitrator was a retired Superintending Engineer of K,D.A. and was appointed on the suggestions made by the petitioner, It is too late in the day, for the petitioner to turn around and say that he was not aware of the fact that the Arbitrator has served in the service of the respondent No.

1. This is a frivolous and baseless ground, which is not sustainable.

6. Coming to the next objection of Mr. A.F.M. Mokarim, that despite extension of time by this Court the Arbitrator was not able to give Award and that such delay was caused due to unnecessary indulgence shown by the learned Arbitrator to the respondent No.

1. In this connection he has referred to the cases of Haroon Oil Mills v. Kohinoor Cotton Ginning Factory (PLD 1967 Kar. 175) and WAPDA v. Naeem Trading Co. (1982 CLC 353). In the former case, it was held by this Court, inter alia, that where a sole arbitrator acted negligently and caused delay then it was open for the party to seek his removal under sector. 11(1) or section 5 of the Arbitration Act, 1940. In the latter case a learned Single Judge of the Lahore High Court, Mr. Muhammad Afzal Lone, J. (as he then was) held, inter alia, that the term "misconduct" not only includes moral turpitude but also includes neglect or breach of duty on the part of an arbitrator. The irregularity in not obtaining enlargement of time from the Courts concerned to contemplation of section 28 of the Act was termed as serious and was classified as "misconduct" warranting removal of such arbitrator under section 11(2) of the Act, 1940.

7. In the present proceedings the time to give Award was finally extended up to 19‑11‑1994 and thereafter, till filing of this petition i.e. on 24‑7‑1995 the learned Arbitrator was not able to give Award. It was pleaded by Mr. Naziruddin A. Qazi that even after expiry of time to give award the petitioner has participated and, therefore, acquiesced in the extension of time. The plea of waiver may be a good ground to defend an Award where the parties have participated in an arbitration proceedings even after expiry of time and the Award was given after the expiry of extended time. (For reference see the case of Engro Chemicals Pakistan Limited v. Trading Corporation of Pakistan (1996 CLC 3444) and the case of Sulaiman Ebrahim H. Jaffer v. Karachi Cooperative Housing Societies' Union Limited. (PLD 1963 Karachi 316). But in the instant case the petitioner has raised this objection before the Award was announced and after expiry of the extended time In view of this admitted positions, the plea of waiver on the alleged ground that the petitioner after participating in the proceedings is not entitled to raise this plea cannot be accepted. (For reference see the case of Nihal Chand and another v. Shanti Lal (AIR 1935 Oudh 349 at 352 (DB)). Neither the teamed, Arbitrator nor respondent No. 1 ever approached this Court after 19‑11‑1994 for extension of time.

8. As a result of above discussion, I hereby revoke the authority of the learned Arbitrator, respondent No.2, namely, Mr. Afzalullah to act as Arbitrator. In furtherance of the same, I hereby direct the said Arbitrator to hand over the case file of the arbitration proceedings to the office of this Court within 30 (thirty) days after receiving intimation of this order. I also direct the parties to suggest new name for the appointment of new Arbitrator within two,(2) weeks. With the above observation, this petition stands disposed of. A.A./Q‑6/K Order accordingly.