P L D 1976 Karachi 31 (PLP)

2. For understanding the real dispute that has arisen in this case it would appear to be necessary to briefly survey the facts culminating in this dispute. After the war with India in 1971 supplies of raw jute for the jute mills in West Pakistan from Bangla Desh were totally stopped. The Government of Pakistan being in urgent need of gunny bags invited Pakistan Jute Mills As sociation and the representatives of the Jute Mills for negotiations in February and March 1972. Meanwhile under letter dated 25-2-72 the Controller- General of Prices and Supplies, Government of Pakistan, had frozen the stocks of gunny bags lying in the godowns of the plaintiffs Messrs Crescent Jute Products Limited. The plaintiffs had, however, stocked this supply to meet their commitment for delivering 8000 bales of jute bags to Government of Punjab. It is the case of the plaintiffs that during the negotiations with the Joint Secretary of the Government of Pakistan the plaintiffs reluctantly consented to divert 4000 bales from that stock, provided the Government of Punjab was made to agree to receive only the balance quantity of their contracted supplies, the defendants then sent the Acceptance of Tender in the usual form to the plaintiffs but there being actually no tender or offer from the plaintiffs it was mentioned in that agreement that the contractor's tender comprised of the negotiations with the Joint Secretary, Industries.

3. The subsequent correspondence filed by the parties shows, that the Crescent Jute Products Limited, the plaintiffs had made it specifically clear that they would not be in a position to honour the supplies of 4000 bales unless they- were relieved of the obligation in respect of supplying this quantity to Punjab Government. The Government of Pakistan, however, passed subsequent orders by which the stocks of the plaintiffs, which had been frozen were released and directions were issued to the plaintiffs, to supply the entire quantity of 8000 bales to Government of Punjab. Under these circumstances the plaintiffs found it impossible to deliver 4000 bales also to the Government of Pakistan and they accordingly supplied only 500 bales and intimated the Government of Pakistan that the order with regard to the supply of 4000 bales be treated as cancelled. The Government of Pakistan, however, extended the time for delivery in respect of the first order and placed a second order at rates which were very much enhanced, as by that time the price level in respect of gunny bags had gone up beyond proportion.

4. This led to a dispute between the two parties as no further supplies were made by the plaintiffs to the defendant, Government of Pakistan. As per terms of the accepted tender the Additional Director-General, Investment Promotion and Supplies, Government of Pakistan nominated Mr. Zarif Ahmad, a retired section officer in the Ministry of Law and Parliamentary Affairs as sole arbitrator to adjudicate this dispute: (i) Whether Messrs Crescent Jute Products Limited, Karachi were entitled to claim price increase from Rs. 450 to Rs. 605 allowed in a subsequent contract? (ii) Whether Messrs Crescent Jute Products Ltd. having supplied only 500 bales against the relevant contract for 4000 bales, the contract in question could be cancelled for the balance unsupplied at the risk and costs of the suppliers ?

5. The arbitrator in his award, however, decided that the plaintiff's/' contractors had shown reluctance to enter into this contract with the Government and this contract was imposed on them by issue of the acceptance of tender. This contract was to be performed until April 1972 and the price was fixed according to a formula which could not be stretched beyond April, 1972. Thereafter in another A/Tender in June, 1972 the price for similar goods was increased to Rs. 605 ; that the plaintiffs could not effect supplies in March and April 1972 on account of the fact that the respondents failed to pursuade the Government of Punjab to postpone the deliveries to them. Consequently the contract came to an end and there could not be any financial repurcussions on either side. Regarding the price of 500 bales supplied by the contractors the arbitrator decided that the price be settled by the parties on the basis of quantum meruit. That the Government having accepted tie bags was bound, in the absence of the contract, to pay a reasonable sum for the benefit received.

6. Mr. Waheed Faruqui has accordingly argued that the question whether the contract came to an end had not been referred to the arbitrator but the only question referred was whether the plaintiff was entitled to raise the price for supply of goods and whether the defendant-Government could cancel the contract at the risk of the plaintiff/contractor. The learned Advocate has also argued that the second question relating to the price of 500 bales had been left vague and the decision was that the price be settled between the parties; that as such this portion was incapable of execution; that the award was, therefore, without jurisdiction and illegal on the face of it and was also bad for being vague and indefinite.

7. It has, on the other hand, been argued by Mr. Muhammad Ali Sayeed on behalf of the plaintiff contractor that there was no concluded contract as such between the parties and at the most it was a supply order which was accepted on condition that the Government of Punjab would be prevailed upon to forego supplies of that specific quantity from their order of 8000 bales. This condition not having been fulfilled, the obligations of the plaintiff-contractor came to an end. In any case the stocks of the plaintiff-contractor were frozen and this order was imposed by coercion and undue influence. There was a release order for making full supplies to Government of Punjab and on the top of ix there was devaluation of the Pak. rupee. The subsequent order was placed at enhanced price. Therefore, it has been rightly held by the arbitrator that the previous contract due to non-fulfilment of the conditions came to an end. With regard to the determination of the price for 500 bales Mr. Muhammad Ali Sayeed has referred to the price formula provided in the A/ Tender, para. 14, under which the contractor was to be paid the actual cost plus 5 % profit and he has argued that the actual figure could be worked out and determined by the parties. Therefore, the question of price had not beers left vague but can be calculated by the parties themselves.

8. In proceedings under section 14 of the Arbitration Act the Courts are pot to be regarded as Courts of appeal from tile decision of an arbitrator. Thief Courts are not supposed to go into the evidence and re-assess the same for deciding whether the decision of the arbitrator is in accordance with evidence or not. The Court can only interfere if the award is bad on the face of it or there is an error of law apparent on a mere perusal of the award. In the absence of any such indication if the award substantially decides the actual disputes between the parties, it would not render the award as invalid or without jurisdiction, if the precise questions referred are not answered in the manner indicated in the reference. Nor can the award be set aside as illegal on the ground that the arbitrator has committed error of law in arriving at the decision. The arbitrators are supposed to be lay men not conversant with the niceties of the law and rules and if the award is badly stated it cannot for that reason be considered as liable to be set aside. Only when a legal proposition forming the basis of the award is, on the face of it, erroneous, can the award be set aside or remitted. It must be contrary to the specific provisions of the law and this error should be apparent on the face of the award.

9. In Raminder Singh v. Mohinder Singh (A I R 1940 Lab. 186), it was held by Young, C. J. that "where an award has clearly dealt with the subject-matter of the suit referred, the mere fact that the relief given by the award is different from what either party claimed, does not make the award invalid on the ground that it went beyond the scope of the suit". In Penukonda Bathakrishn amurthy v. Balasubramania & Co. and others (A I R 1949 Md. 55). It was observed by Mack, C. J. as under:-- "There I may be many cases in which the arbitrator though, aware of the strict law on the subject, may in order to do substantial justice on principles of equity, decide to deviate from it. Even to justify remission of the award on the ground of illegality apparent on its face, it must, I think, be one of such a nature as to permit of no arguments, and to be patent on its face and if permitted to pass un-rectified would do substantial injustice in both law and equity to the parties concerned. It is not sufficient that there should be merely an arguable case on a point of law determined b y arbitrators. The words "or is otherwise invalid" in section 30 (c) of the Arbitration Act would apply to very exceptional cases where for instance, principles of natural justice had been violated by the award and in cases where it is found to be perverse and unconscionable." In Ch. Abdul Rauf and another v. Mohammad Saeed Akhtar and others (P L D 1958 Katy. 145), the arbitrators determined only some of the questions referred to them, and had left out certain other questions. It was observed by Inamullah, J. as under; "A well-settled rule of construction of the award is that the award should be construed liberally and in accordance with common consent, and it should be so read that it can be given effect to, and not so that it would nullify the efforts of the arbitrators appointed by the parties themselves. In determining awards the Court cannot lose-sight of the fact that the arbitrators as a rule are laymen, not conversant with the procedure of Courts of law." Mr. Waheed Faruqui has referred to the case of Muhammad Sadiq v. Ministry of Industries (P L D 1962 Kar. 113) to show that where the arbitrators decided questions not referred to them, there was an error apparent on the face of the record and the award was liable to be set aside. In that case, however, the entire decision was based on a mistaken proposition of law, and the arbitrators had decided a question which was not even disputed by the parties them selves.

10. Regarding the objection that the price of 500 bags has not been fixed by the arbitrator and has been left to be settled by the parties them selves, Mr. Muhammad Ali Sayeed has referred to a decision in Mian Nathu v. Abdul Ghani (A I R 1930 Lah. 22). It was observed in that case that the very fact that an amount is not actually ascertained or calculated by the arbitrators, is not a sufficient justification for holding the award uncertain, for the principle does apply that, it is sufficiently certain which can be made certain. In another decision reported in Nanak Chand and others v. Banarsi Das and others (A I R 1930 Lah. 425), this principle was reiterated that where the arbitrator lays down principles according to which accounts are to be settled, award cannot be said to be indefinite or incomplete. In the case of Ramji Ram v. Salig Ram (11I C 481), it was observed that an award is nonetheless final though it does not execute itself or preclude all future controversies, if it leaves nothing to be done but the performance of some ministerial act, it is not faulty for want of such finality and certainty, for that is sufficiently certain which can be made certain. In Manindra Nath Mandal and another v. Mohanunda Roy and others (13 I C 161), it was held that where an arbitrator states rules for calculating the amount of money to be paid, without giving the result of such calculation, the award is sufficiently certain, on the principle that that is sufficiently certain which can be made certain.

11. In the present case also the question of calculation of the price of 500 bales has been left to the parties. The arbitrator has referred to the price formula in the award. According to this formula the plaintiff-contractor was to be paid five per cent. profit over the cost, and this question being of minor calculation it was left to the parties themselves. Even where the price is left to be determined according to the then prevailing market price, then the award can be upheld as a valid award and cannot be remitted for being vague or uncertain.

12. Thus the award does not appear to be either without jurisdiction or invalid due to any illegality apparent on the face of it ; although the specific questions referred have not been answered the real dispute between the parties regarding the risk purchase has been substantially decided by holding that the contract came to an end and there were no financial obligations on either side. The question of the price of 500 bales was left to be determined after referring to the formula in the Acceptance of Tender document. Under these circum stances I find no illegality or error apparent on the face of the award nor can I hold that, the award is invalid on account of vagueness and uncertainty. The objections of the defendants cannot, therefore, be upheld and the award is accordingly made rule of the Court. The decree may be passed in terms of the award. S. Q. Suit decreed.