1986 PLP 1 (MLD)

Sir, I am directed to state that the Government of Pakistan have been pleased to appoint you as Sole Arbitrator in accordance with clause 16 of the contract concluded between the Directorate General of Food, Government of Pakistan, Karachi and Messrs M. A. Agencies, 7‑B Zam Zam Chambers, Dunolly Road, Karachi to adjudicate in the dispute arising out of the Interpretation of Clause XIII, Item (iii) sub‑clauses (a to g) of the aforesaid contract. (2) The terms of reference would be as to whether the above contractors are liable to pay the damages /compensation on account of breach of contract committed by them in respect of the aforesaid clauses'. (3) Your fee as Sole Arbitrator has been fixed at Rs. 750 (Rs. seven hundred and fifty only) out of which 1/3rd will be credited to Government under the existing rules. (4) Venue of the Arbitrator will be at Karachi. Your obedient servant (Irshad Muhammad Baig) Officer on Special Duty, Government of Pakistan. Tele: 20336. Copy to:‑‑ Messrs M . A . Agencies, 7‑B Zam Zam Chambers, Dunolly Road, Karachi. (Irshad Muhammad Baig) Officer on Special Duty Government of Pakistan." To 31st May, 16‑6‑1975. Mr. M. L. Naqsh, Deputy Secretary (Finance & Accounts) Ministry of Food, Agriculture and Under Developed Areas, ISLAMABAD. Subject:‑‑APPOINTMENT OF AN ARBITRATOR UNDER ARBITRATION CLAUSE OF CONTRACT NO. RP‑32/71/4, DATED 23‑11‑1971. Sir, Please refer to Letter No. RP‑31/71/4 dated 14‑3‑1974 in the matter of arbitration between Directorate‑General of Food and Messrs M.A. Agencies, Karachi. (2) In clarification I am to inform you that your appointment arbitrator is in terms of agreement of reference contained in clause 16 of the contract between the parties and in terms therewith you have to decide the claims of parties submitted to you for decision. (3) This will substitute and supersede Letter No. RP‑32/71/4, dated 14‑3‑1974. Yours obediently, (S.G. Jilanee) Director (Food). From perusal of the above letters it is quite clear that the dispute between the parties was referred to the Sole Arbitrator Mr. M.L. Naqsh of 14‑3‑1974 by Letter No. RP‑32/71/4 and his appointment was made in accordance with clause 16 of the contract. It, however, appears that in the above letter it was mentioned that the terms of reference only authorised the arbitrator to decide whether the contractor was liable to pay the damages /compensation on account of breach of contract committed by him in respect of clauses XIII, items (III) sub‑clauses (a to g). This position was clarified in the subsequent letter, dated 31‑5‑1975 wherein the arbitrator was informed that his appointment as an arbitrator was in term of clause 16 bf the agreement and he is to decide the claims of parties submitted to him. It is, therefore, quite clear that the letter, dated 31‑5‑1975/16‑6‑1975 did not amount to any fresh reference but only the scope of arbitration proceedings which had commenced under the letter, dated 14‑3‑1974 was clarified. I am, therefore, unable to agree with the learned counsel for the judgment‑debtor that the letter, dated 31‑5‑1975/16‑6‑1975 amounted to a fresh reference to the arbitrator. Apart from it the learned counsel for the decree‑holder rightly contended that the judgment‑debtor having participated in the proceedings before the arbitrator after receipt of letter, dated 31‑5‑1975/16‑6‑1975, without raising any objection as to the competency of the proceedings cannot now be heard to say that the proceedings before the arbitrator were void. The record of proceedings before the arbitrator shows that on 7‑1‑1976 the judgment‑debtor submitted the following additional claim before the arbitrator after service of the copy of letter, dated 31‑5‑1975/ 16‑6‑1975. "That the defendant has been supplied with a copy of the letter, dated 31‑5‑1975 from Director Food addressed to the Arbitrator Mr. M.L. Naqsh and a copy of the same has also been served to the defendant on 23‑12‑1975 and in the light of the said letter the Arbitration has been requested by the plaintiff to decide the claims of the parties submitted, to him. That the Arbitration proceedings were initiated on the reference Clause III(iii), sub‑clauses (a) to (g) and accordingly on the said reference the answering defendant submitted his written statement and the arbitration proceedings proceeded in light of the said reference. That the conversion of the proceeding against the terms of reference and to proceed with the proceeding is to begin afresh and according to law the terms of reference it is to be prepared and the proceeding is to be conducted on such references. That the present dispute between the plaintiff and the defendant is on the interpretation of the terms of Contract No. RP‑32/71/4, dated 23‑11‑1971 but the statement of claim submitted by the plaintiff contains demurrage charges for the period from 15‑5‑1971 to 11‑6‑1971 which is not the period of contract and accordingly and obviously demurrage claim for that period cannot be the subject‑matter of this Arbitration as the contract in question did not exist then. As regards demurrage claimed by the plaintiff from 9‑1‑1972 to 2‑3‑1972 the defendant submits that no such claim can be saddled on him in the light of the terms of the said contract. The contract of the defendant was terminated on 13‑2‑1972 and it was restored on 18‑2‑1972 and as such when it was restored on 18‑2‑1972, large number of wagons were awaiting unloading. The unloading of the same would have been done by the contractor to whom the work was allotted, but because he did not comply, the work was restored to the defendant and as such the demurrage for that period cannot be saddled on the defendant. The demurrage claimed is not owing to the negligence of the defendant, rather the same is owing to the wishful act of the plaintiff. That in reply to the claim of Rs. 3,00,732.29 as claimed in para. 6 of the plaintiffs claim and the annexure of the said plaint, the answer of the defendant is that this amount cannot be claimed because according to the terms of contract the answering defendant was to handle only 50, 000 tons and security money was paid only for that quantity but there was no extension of the contract and accordingly the terms of the contract in question could not be enforced against the answering defendant without extension of the same by the plaintiff and consent of the answering defendant. However, it is to be submitted in this connection that the plaintiff according to the terms of contract could not have cancelled a part of the contract and awarded this work to a different contractor. The defendant is not liable for any damages which is not owing to the breach in the contract. Thus, the plaintiff cannot claim the aforesaid amount of Rs.3,00,732.29. The written statement submitted previously shall form part of this written statement." From reading of the above additional claim submitted by judgment‑debtor before the Arbitrator, it is quite clear that he raised no objection as to the competency of the proceedings before the arbitrator after the letter, dated 31‑5/16‑6‑1975 and the proceedings were treated by him in continuation of the earlier proceedings which commenced on the basis of letter, dated 14‑3‑1974. It is also sufficiently established from the record of proceedings before the arbitrator that after 31‑5‑1975 the judgment‑debtor appeared before the arbitrator on several dates produced evidence in support of his claim, disputed the claim of decree‑holder, argued the case before the arbitrator and made several applications to this Court for extension of time for making award by the arbitrator. On the face of this conduct .of judgment‑debtor in the arbitration proceedings it is hardly open to him in law now, to challenge the competency of the arbitration proceedings. In view of the above discussion 1 find no substance in the contention of the learned counsel for the judgment‑debtor that the decree which is sought to be executed against him is invalid, void or inexecutable. I may mention here, that lengthy arguments were addressed before me on the point whether an executing Court is competent to hold enquiry into the validity of the decree and large number of cases for and against the proposition were cited at the Bar. The learned counsel for the judgment‑debtor cited the cases of Syed Mehboob Hussain Shah v. Anjuman Imdad‑e‑Karza A 1 R 1942 Lah. 129; Sind Provincial Wholesale Co‑operative Society v. Abdul Weavers Co‑operative Society P L D 1960 Kar. 946; S. Mlullick Brother v. Haji Muhammad Brothers P L D 1955 Sind 297 and Chabba Lal v. Kallu Lal A I R 1946 P C 72 to support his contention that the executing Court is competent to hold an enquiry into the validity of decree if its validity is challenged before the executing Court by one of the parties to the case. On the other hand the learned counsel for decree‑holder cited the case of Kazi Abdul Qadeer v . East Pakistan Provincial Co‑operative. Bank Ltd. 1969 S C M R 275; Brig (Retd.) Muhammad Aslam Khan v. Azad Government of State ‑of Jammu and Kashmir 1983 C L C 1204; Yousuf Aziz v. Aqeela Begum P L D 1978 Kar. 205 and Haji Ahmed & Co. v. Muhammad Siddique P L D 1965 Kar. 293 to contend that the executing Court cannot go behind the decree and determine its validity or invalidity. There appears to be some difference of opinion on the point argued before me but I will refrain from expressing my views on it as it is quite unnecessary to do so in view of my conclusion above that the proceedings before the arbitrator did not suffer from any legal default. Before parting with the case I may mention here that the learned counsel for the defendant/judgment‑debtor raised an alternate argument before me that the present execution proceedings cannot proceed until and unless the decree‑holder complied with the other direction contained in para.7(5) of the award which is already reproduced by me earlier The relief granted to parties by the arbitrator are contained in para. 7 of the award which also includes the portion relied by the learned counsel for the judgment‑debtor. I am, however, of the view that the enforcement of the relief granted to the decree‑holder in the award is not dependent on clause (v) of para. 7 of the award relied by the judgment‑debtor. The learned counsel for the judgment‑debtor was unable to point out any direction in the award in this‑ regard. The judgment‑debtor if so advised, may apply for endorsement of the relief which according to him was granted to him by the arbitrator in the award in accordance with the law. The objections filed by the defendant/ judgment‑debtor are accordingly dismissed. Execution to issue as prayed. A. A. Objections to award dismissed.