P L D 1967 Karachi 175 (PLP)

(a) where an arbitration agreement provides that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment or appointments; or (b) if any appointed arbitrator or umpire neglects or refuses to act, or is incapable of acting, or dies, and the arbitra tion agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy; or (c) where the parties or the arbitrators are required to appoint an umpire and do not appoint him; any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy. (2) If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator, or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties." "

9. Where an arbitration agreement provides that a refer ence‑shall be to two arbitrators, one to be appointed by each party, then, unless a different intention is expressed in the agreement‑ (a) if either of the appointed arbitrators neglects or refuses to act, or is incapable of acting, or dies, the party who appointed him may appoint a new arbitrator in his place; (b) if one party fails to appoint an arbitrator, either originally or by way of substitution as aforesaid, for fifteen clear days after the service by the other party of a notice in writing to make the appointment, such other party having appointed his arbitrator before giving the notice, the party who has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator in the reference, and his award shall be binding on both parties as if he had been appointed by consent : Provided that the Court may set aside any appointment as sole arbitrator made under clause (b) and either, on sufficient cause being shown, allow further time to the defaulting party to appoint an abritrator or pass such other order as it thinks fit. Explanation.‑The fact that an arbitrator or umpire, after a request by either party to enter on and proceed with the reference, does not within one month comply with the request may constitute a neglect or refusal to act within the meaning of section 8 and this section."

12. Let us note, firstly, that both the sections provide that a substitute can be appointed by a certain party in the place of an arbitrator who neglects to act‑see section 8 (I)(b) and section 9 (a). If the party who is to concur in such an appointment or is to appoint such a substitute, fails, in terms of the section, to do so, then under section 8 (2), recourse is to be taken to the Court but under section 9 (b) the opposite‑party may appoint his own arbitrator to act as the sole arbitrator. In other words, recourse to the Court is not required under section

9. Secondly, the words : "by consent of the parties", which occur in section 8 (1) (a) and the words "notice to concur", which occur after clause (c) of that subsection, unmistakably indicate that the section applies to those arbitration agreements under which arbitrators are appointed by the consent of both the parties. On the other hand, section 9 applies to those of such agreements under which two arbitrators are appointed and one of them is to be appointed by each party. This is clear from the opening pert of the section. The facts of the case would thus attract section 9, and not section 8.

13. Mr. Shaikh Haider, Advocate, for the respondent did not dispute the above propositions, but advanced the view that, even if section 9 was attracted, an arbitrator could not be appointed by a party as a substitute of a previously appointed arbitrator, because the exercise of such a power was inconsistent with section 5 of the Arbitration Act, 1940. That section runs as under: "

5. The authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the arbitration agreement." He emphasised the opening words of this section. With reference to the latter part of it he pointed out that no contrary intention has ever been alleged in this case to be inferable from the arbitration agreement:

14. The above contentions of counsel for the respondent, whether right or wrong, are intelligible; but his point of view became embarrassingly blurred by the manner in which he proceeded to support it. His method was to cite a number of precedents without noticing their differences or their applicability to the facts of this case in terms of the Arbitration Act, 1940. None of those precedents appear to be really applicable in the circumstances of this case. Let us see them: Harimram Khiaram v. Gobindram Rattan Chand A I R 1949 Sind

24. In this case the arbitrators had been named in the arbitration agreement. They were not to be nominated. Section 9 of the Arbitration Act, 1940 was thus not applicable to it. Moreover, there is nothing in it to indicate that section 5 barred the appoint ment by the parties of a substitute in terms of section

8. The trend is against it. Dwarkaprasad v. Firm Dipchand Parsram 44 I C

360. To this case section 8 of the Act was applied, and the learned Judge in effect pointed out that a substitute could not be appointed without following the procedure laid down in section 8 or in section 5 of the Act. Here too the trend is against the view advanced by counsel. Bharat Construction Co. Ltd. v. Union of India A I R 1954 Cal.

606. In this case neither section 5 nor section 9 has been applied. The discussion does not appear to be helpful. Haji Sattar Haji Muhammad v. Abdul Karim Haji Issa P L D 1958 Kar.

378. Here too, sections 5 and 9 were not applied. The division Bench has held that failure to appoint an umpire did not vitiate the proceedings because the objection was waived by omitting to seek remedy against the failure in terms of section 8 (c). Dwarkaprasad v. Dipchand Parsram A I R 1918 Sind

21. This judgment deals with sections 5 and 8 of the Arbitration Act, 1899. The learned Judge pointed out that, as the mandate of the arbitrator was not revocable without the leave of the Court in terms of section 5, the proper procedure to follow, if the arbitrator neglected to act, was that which is to be found in section

8. This case, like the Calcutta case, can be said to be against counsel. Dwarkaprasad v. Firm Dipchand Parsram I L R 11 S L R

101. This is the same ease which is reported in 44 I C

360. A. Ramjibhai & Ca. v. Yousifali & Brothers A I R 1925 Sind

12. In this case, section 8 of the Arbitration Act, 1948 has been examined and applied. It was held that the facts did not warrant the appointment of a substitute in terms of the section because the arbitrator who was substituted was willing to act. The trend of the case is against counsel. Reference to the above cases appeared to be particularly inept because the reason of the applicability of section 9 in this case to the exclusion of section 8, was disregarded by counsel.

15. If section 9 of the Act is applicable to this case, as to my mind it is, then section 5 of the Act does not come in the way o the appointment, in terms of section 9 (a); of an arbitrator as a substitute to the previously appointed arbitrator. The reason is that section 5 of the Act applies to those cases in, which the authority of an appointed arbitrator or umpire subsists and need to be revoked. Revocation means withdrawal, recall, annulment or repudiation. The occasion for such an action arises when the appointee is living, is capable of acting, is willing to act and doe carry out the mandate. If he is dead, or is otherwise incapable of acting, or refuses to act or neglects to act, then there is a vacancy. Note the use of the word "vacancy" in section 8(1) (b) and after clause (c) of subsection (1) of that section. The words, "may appoint a new arbitrator in his place", which appear in clause (a) of section 9, without any reference to revocation of authority or displacement of the previously appointed arbitrator, are also significant. There is a presumption in this clause that an arbitrator who has died or has become incapable of acting or has refused or neglected to act, has left the office letting it fall vacant. "To neglect" means, according to the Ballentines Law Dictionary, "to omit"; according to the Oxford Dictionary, it means: with infinitive, to omit through carelessness to do something. There is no point in getting revoked the authority of an arbitrator who has neglected to act. The fourth criticism of Mr. Suleman Panja is, therefore, upheld.

16. But the above rejection of Mr. Shaikh Haider's contention does not very much help Mr. Suleman Panja because what is required to justify the appointment of a new arbitrator under clause (a) of section 9 of the Arbitration Act, 1940 is satisfactory establishment of death, incapacity, refusal or omission to act. In this case, Muhammad Sadiq was out of Karachi on the 2nd of May 1960. He was perhaps hampered in the discharge of his duties owing to his absence from Karachi and there was consequent delay, but the learned First Appellate Court has held that be cannot be said to have neglected to act because he did actually discharge his duties as the sole arbitrator. There is a difference between neglecting or omitting to act and being careless or being fettered by incidents which are not ones own doings or being imprudent in applying one self to work. Neglecting to act is entirely different from acting negligently. In the latter sense there is an omission to act like a prudent or reasonable man, whereas neglecting to act means failing to act. I agree with the learned First Appellate Court that Muhammad Sadiq did not neglect to act. If he has acted negligently and caused delay, then the remedy open to the present applicant was to apply to the Court for his removal under section 11 (1) of the Act, or for leave, under section 5 of the Act, to revoke his authority. His substitute could not be appointed by the respondent under section 9 (a) of the Act. Thus the appointment by the applicant of Abdus Sattar under section 9 (b) of the Act as the sole' arbitrator owing to the supposed failure of the respondent to act under section 9 (a) was illegal. Consequently, Abdus Sattar had no authority to give an award as the sole arbitrator. His award has been rightly set aside.

17. Mr. Suleman Panja contended that the appointment of Abdus Sattar ought to have been questioned by the respondent before a Court under the proviso to section

9. The respondent having omitted to do so, could not, according to counsel, re‑open the question under section 30 of the Act. I invited the attention of counsel to clause (c) of section 30 under which an award can be set aside on the ground that it was "improperly procured" or was "otherwise invalid". If, in this case, the conclusion is correct that Abdus Sattar had no authority to give the award as the sole arbitrator, then there is apparently no reason why the award should not be open to question under section 30 of the Act. Counsel advanced no argument against the point of view. The plea of waiver could not be entertained because, apart from other reasons, the respondent's conduct in appointing its own arbitrator as the sole arbitrator is inconsistent with it. Counsel's fifth criticism, therefore, does not hold good.

18. In conclusion of the above discussion, the revision application is dismissed with costs. K. B. A. Application dismissed.