1986 PLP 644 (CLC)

‑‑‑Ss. 5, 33 & 37(1)‑‑Revocation of authority of arbitrator‑‑Claim being time‑barred, reference to arbitration, held, was not valid‑‑Revocation of authority of arbitration allowed in circumstances. Pakistan v. Messrs Ameeje Valeeje & Sons P L D 1978 Kar. 344 and Messrs A . C . Yousuf & Co. v . Messrs K . B . H . M . & Co. P L D 1965 Kar. 374 ref. Sajjad Zahid for Applicants. Samiuddin Samifor Respondents. Date of hearing: 6th November, 1985. This is an application under section 33, read with sections 5 and 37(1) of the Arbitration Act, 1940 for revocation of the authority of the arbitrators as the claims are time‑barred under section 115 of the Limitation Act, 1908, read with section 37(1) of the Arbitration Act, 1940, which on the conclusion of the arguments advanced by the learned counsel for the parties was allowed by me by my short order, dated 6‑11‑1985 for reasons to be recorded separately. Now these are the reasons for the same.

2. The facts relevant for purpose of this application are that the parties on 19‑1‑1974 entered into a contract of affreightment, whereunder respondent No.l submitted their claims demurrage which, according to the terms of the contract were to be submitted within 150 days of the completion of the voyage. The claims, as submitted, being beyond 150 days were rejected by the applicants as long back as 1975. Respondent No.l did not commence any legal or arbitration proceedings against the applicants to enforce their alleged demurrage claims until the respondent No. l's letter dated 5‑1‑1985 (subsequently corrected to read as 5‑2‑1985) appointing their arbitrator and requesting the applicants to likewise appoint their arbitrator which as alleged by the applicants, is time‑barred.

3. The parties have filed their respective affidavits alongwith a number of documents. I have heard Mr. Sajid Zahid, learned counsel for the applicants and Mr. Samiuddin Sami, learned counsel for the respondent . No.l on the points at issue. Mr. Sajid submitted two‑fold arguments. (i) The claims were submitted beyond the stipulated time and as such stood waived. They ought to have been submitted within 150 days of the completion of the voyage as per clause (6d) of the contract. (ii) The arbitration proceedings have been initiated after three years of the submission of the alleged claims and as such are time‑barred.

4. Mr. Samiuddin learned counsel for the respondents did not advance any arguments on the first submission of the learned counsel for the applicants. He, however, submitted that the claims for demurrage arising out of the contract of affreightment, dated 19‑1‑1974, which was intended for one year, pertain to nine voyages as mentioned in the letter of claim, dated 2‑10‑1976. These claims were never repudiated by the applicants. The first letter of refusal received from the applicants was, dated 2‑5‑1984. The limitation would thus start from the date of the receipt of the said letter. It was further submitted that the limitation being a mixed question of fact and law cannot be decided in these proceedings. Lastly, it was also submitted by him that the arbitration proceedings have already commenced and the applicants by participating in the proceedings have waived their right, if any, to challenge the invocation of the arbitration clause 12 of the contract in these proceedings.

5. Dealing first with the last submission, suffice it to say that appointing arbitrator and taking part in arbitration proceedings by the applicants as evidence from their letters dated 12‑2‑1985 and 19‑2‑1985 was without prejudice to their objection to the invocation of the arbitration proceedings on, inter alia, the ground of limitation. In fact, it was specifically stated in their letter, dated 12‑2‑1985 that it shall not be deemed to construe as submission to the arbitration proceedings. In view of these letters, the objection that the right of challenging the invocation of the arbitration clause and proceedings thereunder stood waived is without any substance.

6. In support of the second objection, Mr. Sami, learned counsel for respondent No. l relied on a number of decision reported as Karachi Shipyard and Engineering Works Ltd. v. Muhammad Aslam Khan P L D 1979 Kar. 635; West Pakistan Water and Power Development Authority, Lahore v. Umer Sons Limited P L D 1970 Lah. 398 and Government of Pakistan v. National Agencies P L D 1978 Kar.

827. On the other hand Mr. Sajid Zahid, learned counsel for the applicants relied on the cases reported as Board of Trusteees of Port of Karachi v. National Construction Company Limited and another P L D 1981 Kar. 377 and Messrs United Electric & Refrigeration Company v. Veb Deutsche Seeree Derex, Rostock East Germany and another 1980 C L C 921.

7. It is true that limitation is a mixed question of law and fact and, generally speaking, is not determinable without an inquiry into the facts, but I am of the view that if the facts are not disputed, the question of limitation can be decided by the Court under the provision of section 33 of the Arbitration Act, if such question can be determined without recording oral evidence of the parties. In the instant case the parties have filed the relevant documents which were relied upon by them for the purpose of determining the question of limitation can thus be decided on affidavits of the parties as determination thereof does not depend on disputed facts. Mr. Sajid has placed reliance on Messrs Haji Muhammad Sharif Atta Muhammad v. Messrs Khoja Mithabhai Nathoo and others P L D 1960 Kar. 10 and Uttamchand Brilal v. Balmokand A I R 1929 Sind 55 wherein a principle has been enunciated that when a claim submitted for decision by the arbitrators is disputed as barred b by time, the Court is to see whether the dispute is real or a mere pretence. If it is real, then it can be a proper subject of arbitration, but if one party to the arbitration agreement sleeps over its right and the statutory period of limitation prescribed for filing the suit is allowed to expire, its claim is liable to be defeated as time‑barred, and as no suit can be instituted in respect thereof, there remains no real dispute enforceable by arbitration. In other words, if the claim is clearly time‑barred, there is no arbitration clause subsisting in the eye of law and thus there is no jurisdiction of the arbitrators to enter on the reference. I am in respectful agreement with the view expressed in the above‑cited two decisions and hold the second objection as without force.

8. Now, adverting to the contention of the applicants that the claim has become time‑barred, learned counsel agree that the period of limitation as applicable to the presence case, will be three years. There is, however, a disagreement on the point as to when this period will start. Mr. Sami contended that the period of limitation will start from 2‑5‑1984 when the claims of respondent NO‑1, for the first time, was repudiated by the applicants, whereas Mr. Sajid submitted that the period for the payment of demurrage will be three years from the date the claims were lodged with the applicants and remained unpaid.

9. Mr. Sajid invited my attention to the applicants' letter, dated 18‑12‑1975 attached with their rejoinder Annexure 'A' and submitted that the demurrage claims were received on various dates during February, 1975 and September, 1975 as mentioned in the said letter. These claims were, however, repudiated by the applicants as they were submitted after expiry of the time agreed under the contract. He, therefore contended that the arbitration proceedings could be started within three years from February, 1975 and September, 1975 or, at the most, within three years from December, 1975 when the claims were repudiated by the applicants.

10. Mr. Sami, in reply, submitted that the revised claims for demurrage as submitted on 2nd October, 1976 were never repudiated. The applicants, time and again, admitted these claims with respondent No. 1 in joint‑meeting as is evident by various letters and telegrams produced by them. I specifically asked Mr. Sami if any minutes of the joint‑meetings were recorded so as to prove that the claims of respondent No.l were at any point of time admitted in writing by the applicants. His reply was in the negative that there were no minutes of the said meetings. Even if at any relevant time the claims of respondent No.l were orally admitted by the applicants it does not amount to a valid acknowledgment as provided under section 19 of the Limitation Act, 1908. In this respect, reference may be made to Messrs Yacoob Habib Kaliya v. Messrs A. A. Sattar P L D 1958 (W.P.) Kar. 534, Muhammad Akbar Khan v. The Province of West Pakistan P L D 1959 (W.p.) Lah. 295 and Haji Ghaffar Habib Janu v. Khawaja Wakil Ahmad P L D 1959 (W.P.) Kar.

611. The fact, however, remains that the claims submitted by respondent No.l in 1975 stood repudiated by the applicants by their letter, dated 18‑12‑1975.

11. I am, therefore, of the view that the claim is clearly time‑barred as it stood repudiated as long back as 1975. Reliance may be placed on Pakistan v . Messrs Ameeje Veleeje & Sons and others P L D 1978 Kar. 344 which relies on Messrs A . C . Yousuf & Co. v . Messrs K . B . H . M . & Co. P L D 1965 Kar.

374. The reference to arbitration in 1985 is, therefore, not a valid reference in the eye of law. The application is, therefore, allowed, a5 prayed, as already ordered by me on 6‑11‑1985‑ A , A ?????????????????????????????????????????????????? Application allowed.