1985 PLP 397 (MLD)

(a) That the Umpire was requested by the Government of Sind/ defendant by its letter dated 15th May, 1984 to complete the proceedings within two months' time but the said Umpire could not proceed with the matter as the record of the arbitration case was received by him very late from the office of this Court. It is stated that the record was delivered to the Umpire under registered parcel on 16-7-1984. (b) That even thereafter the Umpire -could not proceed with the matter as he then became pre-occupied extremely with the special assignment pertaining the feasibility reports, estimates and follow up action and was to complete the task by 30-9-1984 in view of the decision taken by the Government." (iv) Both the learned counsel at the time of arguments conceded that the period of one month within which after receipt of letter of the defendant (Government) the Umpire ought to have entered upon the reference and the time, i.e. 2 months within which the Umpire was required to make the award have already expired and that such delays constitute neglect or refusal to act on the part of the Umpire within the meaning of section 8 read with Explanation to section 9 of the Arbitration Act; 1940- The only question, therefore which remains now for considerable is as to whether on the grounds mentioned in the application moved on behalf of the defendant, sufficient cause has been made out for condona tion of the delay and for extension of time to enable the Umpire to make the award. After hearing the counsel for both the parties I am of the opinion that merely because the papers were not received by the Umpire from the Court till 16-7-1984, that could not have prevented him from entering upon the reference and/or proceeding with the matter after receipt of the letter dated 15-5-1984. The Umpire while entering upon the reference could have taken steps and/or given directions for getting the record from the Office of this Court, if the said record was required. It would, also be observed that even after the receipt of the record on 16-7-1984 froth the Court, tile Umpire neither caret' for yet another 2 months to enter upon or proceed with the reference nor moved the Court for extension of time to make the award for the alleged reason that the record was not received by him till 16-7-1984. This brings me to the consideration of the second ground. The learned counsel for the defendant argued that even after the receipt of the award the Umpire could not proceed with the matter because he then became pre-occupied with a special assignment. However, neither the date on which he became occupied as alleged has been given nor the nature of the assignment has been disclosed. Even otherwise the arbitration proceedings, could have been taken up by the Umpire, after the office hours and as such his alleged pre-occupation in any official work could riot have prevented him for entering upon and proceeding with tile reference. The Honourable Supreme Court of Pakistan in the case of Province of East Pakistan v. Abdur Rashid 1970 S C M It 320 while disposing of an appeal arising out of a case, where the arbitrator was removed for his failure to enter upon the reference acrd make the award with reasonable despatch, held:- "Section 11 Clearly confers power on the Court to remove, on the application of any party to a reference, art arbitrator who fails to use all reasonable dispatch in entering in and proceeding with the reference arid making all award. In view of this express provision of section 11 . The trial Court removed the arbitrator under the said section and the High Court was justified in refusing to interfere in revision with the trial Court s decree removing the arbitration. Reference may also be made here to the case of WAPDA v. Naeem Trading Company 1982 C L C 353 at p. 356, where a learned judge of the Lahore High Court while observing that misconduct means not only moral turpitude but also neglect or breach of duty on the part of an arbitrator. The learned Court finding that the proceedings recorded by the arbitrator amply smacked of lack of reasonable despatch in proceeding with the reference and making the award held : Contravention of the provisions of para 3 of the 1st schedule of the Arbitration Acct, by the Arbitrator is quite apparent on the face of the record. Equally serious is the irregularity in not obtaining the enlargement of time from the Court concerned in contemplation of section 28 of the Act. All this on the part of the arbitrator clearly amounts to misconduct, calling for his removal under section 11(2). The impugned order thus does not suffer from any illegality on this account.

2. In view of the principle laid down in the cases referred above, I have no hesitation in holding that though there is no allegation against the Umpire of any moral turpitude but his failure to enter on and proceed with the reference within one month in spite of request made by the defendant/Government of Sind on 15-5-1984 while appointing the Umpire to complete the proceedings within 2 months, constitutes of neglect or refusal to act within meaning of section 8 of the Arbitration Act. Further being of view that no sufficient ground of exercese of judicial discretion in extension of time to make the award having been made out the application under section 28 of the Arbitration Act, 1940 for condonation of delay and extension of time to make the award cannot be granted. Accordingly the authority of the Umpire (Mr. Sajjad Haider) is revoked and the application for extension of time to make the award is dismissed.

3. The only question now remains for consideration is as to who should now be appointed Umpire in the case. Mr. A. K. Lakhan, the learned counsel for the plaintiffs, submitted a list which consists of retired Judges, while Mr. S.A. Farooqui, Advocate contended that in view of the decision reached by thin Court as above, the Department may be allowed to appoint an Umpire in exercise of the powers under the agreement between the parties. Mr. A.K. Lakhan, Advocate, however, submitted that the procedure referred was deviated as earlier Mr. Muhammad Ali Sayeed, a senior Advocate of this Court was appointed Umpire by the two arbitrators of the parties which fact is recorded in the order of the Court passed on 29-8-1982, but the said Umpire could not make the award. Thereafter Mr. Shah Naseemuddin Chief Engineer was appointed as the Umpire by the Department but his authority to act as the Umpire was also revoked and thus Mr. Sajjad Haider was appointed as the Umpire by the defendant, but his authority has been revoked by this order. In the circumstances, according to Mr. Lakhan, the Court may appoint the Umpire and in support relied upon the case of WAPDA v. Naeem Trading Company. In the said case the Court observed that unless there is intention to the contrary the power conferred on a third person to appoint an arbitrator cannot be exercised again and again. Relying upon the case of Olivers Collings (11 East 365). on the facts of the case, the learned High Court observed:- "Once Mr. Ziau1 Haq was appointed as the arbitrator under clause 25-A of the agreement the power vesting in the depart mental authority to appoint an arbitrator was exhausted." Thus the argument of Mr. S.A. Farooqui, that the departmental authority alone is to again exercise the power to appoint a new Umpire cannot be accepted as an absolute rule. It would also be not out of place to mention here that at the initial stage the two arbitrators had appointed Mr. Muhammad Ali Saeed an Advocate as the Umpire to which the Department had raised no objection. This negatives the contention now advanced that the new Umpire can be appointed by the department alone.

4. In the circumstances of the present case finding that on one occasion Mr. Muhammad Ali a senior Advocate of this Court was appointed an Umpire by the arbitrators and on other two occasions the defendants were allowed to nominate Umpires but each one of them failed to make the award and their authority had to be revoked. I am of the opinion that it is a fit case in which the Court should now appoint the Umpire who shall make the award with all despatch. Taking all the facts and circumstances in consideration I appoint Mr. Agha lmdad Ali, formerly a Judge of this Court as the Umpire. He shall make the award within 2 months from the date of the receipt of the notice from this Court. The fee and the manner of its payment will be decided by the Umpire himself unless otherwise direction of Court becomes necessary. M .I . Order accordingly