1988 PLP 430 (CLC)

(6) Damages due to suspension of work etc. Rs 55,792 (7) Costs of Litigation Rs 25,000

3. The learned Arbitrator after taking into consideration the evidence led by the parties allowed claims for (1) Security Deposit, (2) Bitumen, (4) Compaction of earth and (6) Damages and rejected the claims for (3) Extra work of sub‑grading, (5) Escalation and (7) Costs of litigation.

4. The award was filed in the Court by the Arbitrator on 19‑8‑1986. The plaintiff did not file any objections against the said award. The defendants No.l and 2 have filed their objections to the award.

5. I have heard Mr. S.A. Mannan, Advocate for the plaintiff and Mr. A.R. Akhtar, Advocate for the defendants.

6. The plaintiff's first claim relates to the balance of security deposit amounting to Rs.3,

908. The defendants had admitted their liability for this amount and, therefore, the learned Arbitrator allowed this claim by consent. As such there is no scope for interference with the said finding of the learned Arbitrator. Counsel for the defendants also did not challenge the same. Hence the finding in respect of this claim is approved.

7. The plaintiff's next claim is for bitumen used in the first coat, which according to the plaintiff was not provided in schedule 'B' of the tender and therefore he was not bound to use bitumen in the first coat. As against this the defendants' contention was that the word binder used in second schedule was for bitumen and it was incorrect to say that there was no provision for using bitumen in the first coat. It was pointed out before the learned Arbitrator on behalf of the defendant that schedule 'B' of the tender clearly provided that the binder was to be heated. It again provided that the binder was to be sprayed. It was therefore contended that by word binder no other cementing material was intended except bitumen because it is only the bitumen which is to be heated and sprayed and no other binding or cementing material. During the arguments it was alleged by the plaintiff's counsel Mr. S.A. Mannan that the plaintiff was not required to use bitumen in the first coat. By the word binder used in the schedule he was supposed to use morum. The contention on6 the face of it looks funny because neither the morum is heated nor sprayed while being used as a cementing material. It was next contended on behalf of the plaintiff that since the defendants had asked them to use bitumen as a cementing material without providing the same in the schedule, it was the duty of the defendants to supply it to the plaintiff free of cost and not to charge any price for the same. This contention of the plaintiff's counsel on the very face of it appears to be without any substance. Firstly because there is clear provision in the schedule of the tender for using bitumen as a cementing material as already pointed out by me above. Secondly it is not correct to argue that there was no provision for payment of price of the bitumen by the plaintiff. The tender very clearly provides as under:‑ "I/we hereby tender for the execution for the Governor of the Sind for the work and agree that when materials for the work are provided by the Government such materials and the rates to be paid for them shall be as provided in schedule 'A' hereto."

8. Schedule ' A' clearly provides in the very first para that bitumen will be issued, if available, by the Government at the rate of Rs.650 per ton. The learned Arbitrator has discussed the contentions of both the parties and observed as follows:‑ "I cannot read into schedule 'B' any obligation to pay for the binder, but can this obligation be inferred from the fact that schedule 'A' specifies the price at which the contractor can, at his option, buy bitumen ? Liabilities are not to be inferred lightly, but at the highest, if schedule 'A' is read with schedule 'B', the position is ambiguous. It is however settled law, and this was not disputed also, that an ambiguity in a document must be construed against the authors of the document and the tender was prepared by the defendants."

9. It would, therefore, appear that he allowed this claim on the ground that according to the tender the plaintiff was not liable to pay the price of bitumen. He‑ was also of the opinion that even if tender made a provision for payment of price of bitumen by the plaintiff the said provision was ambiguous and the ambiguity should be resolved in favour of the plaintiff. I am not in agreement with the above reasoning of finding of the learned Arbitrator. As already stated by me above there is clear mentioned in the tender as well as in the schedules 'A' and 'B' that bitumen was to be used by the plaintiff in the first coat and that he had to pay the price of the same to the Government if it was supplied to him. It is not proper to conceive that first coat of a road can be constructed without using the bitumen as binder or that bitumen was to be supplied by Government to the contractor free of cost.

10. It was next argued by the counsel for the plaintiff that the jurisdiction of this Court, while hearing objections against the award, was limited by section 30 of the Arbitration Act which reads as under:‑ "

30. Grounds for setting aside. An award shall not be set aside except on one or more of the following grounds, namely:‑ (a) that an arbitrator or umpire has misconducted himself or the proceeding; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35; (c) that an award has been improperly procured or is otherwise invalid.

11. He therefore submitted that until unless the Court was of the view that the Arbitrator had misconducted himself or the proceedings it cannot set aside the award. There can be no cavil with the proposition that an award cannot be set aside except when the Arbitrator has misconducted himself or the proceedings but it must be remembered that misconduct does not necessarily mean any moral turpitude on behalf of the Arbitrator. In P L D 1977 S C 237 (Brooke Bond (Pak.) v. Conciliator and others) the term misconduct hasl been discussed. It will be useful to reproduce the following observations:‑ "The term misconduct used in connection with arbitration does not necessarily imply anything in the nature of fraud or moral turpitude. In the judicial sense the misconduct of an Arbitrator means his failure to perform his essential duty, resulting in substantial miscarriage of justice between the parties. According to Atkin, J. In Williams v. Willis (1), the words "misconducted the proceedings" means such a mishandling of arbitration as is likely to cause some substantial miscarriage of justice. In the American jurisprudence Vol. 3 on pages 964‑5 it is observed that awards which are valid on their faces may be set aside in equity for misconduct on the part of the arbitrators, and the extrinsic evidence is admissible to prove such misconduct. Conduct inconsistent with the duties imposed upon those selected as the arbitrators, either at the hearing, or in reaching their conclusions will frequently constitute misconduct as will impeach an award." Similar view has been taken in P L D 1974 Karachi 155 (Pak. through Secretary, Ministry of Industries v. M/s. Asian Associates Agencies).

12. By now it is a settled law that the Arbitrator was duty bound to enquire into terms of the contract and to strictly follow the same. Even misconstruction of terms of contract will vitiate an award. Reference in this connection may be made to 1980 C L C 470 (M/s Barisons (Pak.) Ltd., Karachi v. Pakistan through Secretary Ministry of Industries & Natural Sources and another), where it was held as under:‑ "Consequently, in view of the principle laid down in the aforesaid authority, if the decision of the arbitrator is wrong on the face of the award, it is open to review. The meaning of the expression "error" on the face of award has been thus stated by the Privy Council in the case of Champesy Bhara & Company v. Jivraj Ballo Spinning & Weaving Company:‑'An error in law on the face of the award means in their Lordships' view that you can find in the award or a document actually incorporated thereto, as for instance, a note appended by the arbitrator stating reasons for his judgments to some legal position which is the basis of the award and which you can say is erroneous '." Thus, although an arbitrator is competent to construe a clause of the contract but in the absence of any specific reference about the interpretation of the contract it is open to the Courts to consider whether the finding of the arbitrator on that point was good or bad in law. The statement of claim filed before the arbitrator, by itself, is not enough to oust the jurisdiction of the Court to subject the finding of the arbitrator to scrutiny." Similar view has been taken in P L D 1978 Kar

585. I therefore, reject the second claim and reverse the finding.

13. The third claim of the plaintiff was with regard to the sub‑grading. He had claimed Rs.37,856 on this account. The learned Arbitrator rejected this claim. The plaintiff has not filed any objection 1 with regard to this finding of the learned Arbitrator. The defendants for obvious reasons did not contest the same. Hence, I uphold the finding of the learned Arbitrator with regard to the same.

14. The next claim of the plaintiff is on account of compaction of balance earth work for which he had claimed a sum of Rs.19,

620. The learned Arbitrator has allowed this claim as he has believed the evidence of the plaintiff and has held that the plaintiff had done compaction work. He has disbelieved the evidence of the defendant that no compaction work was done or that it was not necessary nor possible to do the compaction as ditches were too small and depth was more than two feet. The finding of the learned Arbitrator on this claim appears to be justified. The defendants are not clear in denying the plaintiff's claim. On the one hand they have stated that the plaintiff had not compacted the earth at all while on the other hand they have pleaded that it was not necessary to compact the 1 earth as the depth was more than four feet. Again another explanation is given by the defendants to the effect that since the depth was less than four feet compaction was not possible. All these are questions of fact. The finding of the learned Arbitrator is based on the evidence led before him by the respective parties. The Court has no reason whatsoever to disagree with the finding of the learned Arbitrator.

15. His next two claims were: (i) for Rs.37,856 for sub‑grading, and (ii) for Rs.1,19,329 for compensation for the loss suffered by the plaintiff on account of defendants' delay. Both these claims were rejected by the learned Arbitrator for good reasons. His findings have not been challenged by the plaintiff. The defendants had no' reason to challenge the same. I, therefore, uphold the findings in respect of both these claims. Thereafter comes the claim for compensation on account of extra expenditure incurred by the plaintiff and shown in para 15 of the statement of claims. These are detaled at serial number 6 and provide for damages due to suspension of work for 9 months, difference in cost of prooding metal, quantity If base course, difference in cost of cartage and carpenting and pay of staff for 9 months. The learned Arbitrator has come to the conclusion on the evidence led by the parties that the plaintiff was entitled to the same and has accepted his claim for a sum of Rs.55,792 on this account. The finding of fact of the Arbitrator, who is a Judge of own choice of the parties, cannot be allowed to be challenged by them lightly.

16. The last claim is about the cost of litigation. This was al discretionary claim and the learned Arbitrator has chosen to reject the same. He left the parties to bear their own costs. I also do note find any reason to disagree with the same.

17. It would therefore appear that I am in agreement with all the findings of the learned Arbitrator except the finding of claim of price of bitumen. It is a settled law that where the Court comes to the conclusion that an award is partly valid and partly invalid it can confirm the part which is valid and reject the part which is invalid. Reference in this connection may be made to P L D 1980 Lah. 422 where it has been held that where the award consists of a bad as well as good parts and the parts are severable, the Court should uphold the good part and reject the bad part.

18. I, therefore, uphold the award except so far as it relates to the claim of the bitumen and reject the claim for bitumen and direct that the award except so far as it relates to the claim for bitumen be made rule of the Court and a decree for a sum of Rs.79,320 be passed in favour of the plaintiff. The parties to bear their own costs. M.Y.H./0‑5/K Suit decreed