Award made rule of court

2025 PLD 706 SUPREME-COURT Judicial Precedent

Ss. 14, 17, 30, 33 & 39Contract Act (IX of 1872), S. 74ArbitrationAward made rule of CourtObjections against awardTrial Court inviting evidence without deciding the objections

Dispute between the parties arose and was related to a contract executed on 01.11.2017 and was referred to arbitration by a two-member arbitral tribunal, which rendered the award on 02.07.2021

On 07.07.2021, the arbitrators filed the award before the Civil Court

On 01.09.2021, the petitioner filed objections for setting aside the said award

On 23.11.2022, Civil Court framed the issues and required the parties to submit the list of witnesses for the production of evidence

Said orders were assailed before the High Court by filing a revision petition, which was allowed by setting aside the orders dated 23.11.2022 passed by the Civil Court and case was remanded to the Civil Court for decision afresh on the basis of available record

Validity

Arbitrators were entitled to regulate their own procedure and were not governed by the strict procedure prescribed by the C.P.C. and the rules regarding evidence contained in the Qanun-e-Shahadat, 1984

Arbitrators decided the disputes based on evidence presented during arbitration proceedings

Arbitrators were under no obligation to frame issues as provided in the C.P.C.

Court recorded fresh evidence, disregarding the procedural safeguards in arbitration, such as the arbitrator's exclusive jurisdiction to assess evidence and apply the law

Said fact might lead to inconsistent outcomes and procedural unfairness

If the Court frames issues and records evidence after objections to an award were filed, parties might use this as an opportunity to re-litigate the entire dispute, leading to multiple proceedings on the same issues besides undermining both the legislative intent and the integrity of the arbitral process

Said multiplicity undermined the arbitrator's role in providing a one-time binding decision

Possibility of a trial after the award has been filed in Court creates uncertainty about the finality and enforceability of awards, that discourages the parties from opting for arbitration, defeating the legislative intent to promote arbitration as a preferred mode of dispute resolution

Framing of issues, recording of evidence and hearing arguments post the filing of the award in the Court is bound to increase litigation costs for parties and add to the already heavy workload of Courts

Said fact again defeats the purpose of arbitration as an economical and efficient alternative dispute resolution mechanism

Recording of evidence and conducting a trial effectively converts the Court into an appellate or fact-finding forum, which would be contrary to the statutory scheme envisaged by the Act, 1940

In the case in hand, the sole reason given by the Civil Court for framing the issues was that the contentions raised through the objections formed a factual controversy, which could not be determined without the recording of evidence

Perusal of the issues framed by the Civil Court showed that they were generalized in nature, they lacked specificity and the necessity for framing such issues could not be discovered in the impugned order

Therefore, the High Court did not commit any illegality by setting aside the order dated 23.11.2022 and remanding the matter to the Civil Court with the direction to decide the petitioner's objections to the award dated 02.07.2021 on the basis of the available record

Leave to appeal was declined and the petition was consequently dismissed.

2025 CLD 1639 SUPREME-COURT Judicial Precedent

Ss. 14, 17, 30, 33 & 39Contract Act (IX of 1872), S. 74ArbitrationAward made rule of CourtObjections against awardTrial Court inviting evidence without deciding the objections

Dispute between the parties arose and was related to a contract executed on 01.11.2017 and was referred to arbitration by a two-member arbitral tribunal, which rendered the award on 02.07.2021

On 07.07.2021, the arbitrators filed the award before the Civil Court

On 01.09.2021, the petitioner filed objections for setting aside the said award

On 23.11.2022, Civil Court framed the issues and required the parties to submit the list of witnesses for the production of evidence

Said orders were assailed before the High Court by filing a revision petition, which was allowed by setting aside the orders dated 23.11.2022 passed by the Civil Court and case was remanded to the Civil Court for decision afresh on the basis of available record

Validity

Arbitrators were entitled to regulate their own procedure and were not governed by the strict procedure prescribed by the C.P.C. and the rules regarding evidence contained in the Qanun-e-Shahadat, 1984

Arbitrators decided the disputes based on evidence presented during arbitration proceedings

Arbitrators were under no obligation to frame issues as provided in the C.P.C.

Court recorded fresh evidence, disregarding the procedural safeguards in arbitration, such as the arbitrator's exclusive jurisdiction to assess evidence and apply the law

Said fact might lead to inconsistent outcomes and procedural unfairness

If the Court frames issues and records evidence after objections to an award were filed, parties might use this as an opportunity to re-litigate the entire dispute, leading to multiple proceedings on the same issues besides undermining both the legislative intent and the integrity of the arbitral process

Said multiplicity undermined the arbitrator's role in providing a one-time binding decision

Possibility of a trial after the award has been filed in Court creates uncertainty about the finality and enforceability of awards, that discourages the parties from opting for arbitration, defeating the legislative intent to promote arbitration as a preferred mode of dispute resolution

Framing of issues, recording of evidence and hearing arguments post the filing of the award in the Court is bound to increase litigation costs for parties and add to the already heavy workload of Courts

Said fact again defeats the purpose of arbitration as an economical and efficient alternative dispute resolution mechanism

Recording of evidence and conducting a trial effectively converts the Court into an appellate or fact-finding forum, which would be contrary to the statutory scheme envisaged by the Act, 1940

In the case in hand, the sole reason given by the Civil Court for framing the issues was that the contentions raised through the objections formed a factual controversy, which could not be determined without the recording of evidence

Perusal of the issues framed by the Civil Court showed that they were generalized in nature, they lacked specificity and the necessity for framing such issues could not be discovered in the impugned order

Therefore, the High Court did not commit any illegality by setting aside the order dated 23.11.2022 and remanding the matter to the Civil Court with the direction to decide the petitioner's objections to the award dated 02.07.2021 on the basis of the available record

Leave to appeal was declined and the petition was consequently dismissed.

2025 CLC 525 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 18 & 30Contract Act (IX of 1872), S. 74Award made rule of CourtObjection, dismissal ofAwarding of compensation

Appellant/Trading corporation of Pakistan was aggrieved of dismissal of its objections and being awarded only 50% of performance amount as compensation

Validity

Aggrieved party, under S. 74 of Contract Act, 1872 was still entitled to reasonable compensation for breach of contract, even if it could not prove actual damage or loss

This ensured that party at fault could not avoid liability simply because other party could not quantify the damage

Reasonable compensation should not exceed penalty

Compensation awarded should be reasonable and should not exceed the amount specified in contract or penalty stipulated

Aim is to prevent excessive or punitive penalty that are disproportionate to the breach

There was no basis for awarding 50% of performance amount to appellant/Corporation under S. 74 of Contract Act, 1872

When award was presented before Judge in Chambers of High Court, respondent/company did not raise any objection

After order in question and decree was passed by Judge in Chambers of High Court, respondent/company chose not to appeal against the same

Appellant/Corporation could not question award and order/decree

Division Bench of High Court declined to interfere in partial acceptance of award and its confirmation as rule of Court a the same showed no significant irregularities

Objections of appellant/Corporation did not demonstrate that Judge in Chambers of High Court either deviated from legal standards or misapplied judicial principles

Intra Court Appeal was dismissed in circumstances.

2025 CLC 525 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 18 & 30Contract Act (IX of 1872), S. 74Award made rule of CourtObjection, dismissal ofAwarding of compensation

Appellant/Trading corporation of Pakistan was aggrieved of dismissal of its objections and being awarded only 50% of performance amount as compensation

Validity

Aggrieved party, under S. 74 of Contract Act, 1872 was still entitled to reasonable compensation for breach of contract, even if it could not prove actual damage or loss

This ensured that party at fault could not avoid liability simply because other party could not quantify the damage

Reasonable compensation should not exceed penalty

Compensation awarded should be reasonable and should not exceed the amount specified in contract or penalty stipulated

Aim is to prevent excessive or punitive penalty that are disproportionate to the breach

There was no basis for awarding 50% of performance amount to appellant/Corporation under S. 74 of Contract Act, 1872

When award was presented before Judge in Chambers of High Court, respondent/company did not raise any objection

After order in question and decree was passed by Judge in Chambers of High Court, respondent/company chose not to appeal against the same

Appellant/Corporation could not question award and order/decree

Division Bench of High Court declined to interfere in partial acceptance of award and its confirmation as rule of Court a the same showed no significant irregularities

Objections of appellant/Corporation did not demonstrate that Judge in Chambers of High Court either deviated from legal standards or misapplied judicial principles

Intra Court Appeal was dismissed in circumstances.

2025 CLD 420 ISLAMABAD Judicial Precedent

Ss. 14(2) & 39Limitation Act (IX of 1908), First Sched. Art.178Award made rule of courtFiling of award in court by the Arbitrator upon application made by the appellant

Filing of application by the respondent for return of award due to lack of pecuniary jurisdiction of civil court to entertain and make award Rule of Court

Upon acceptance of application, the award was filed in the court of competent jurisdiction (District Court)

Limitation

Provisions of Art.178 of the Limitation Act, 1908, apply to application under S.14(2) of Arbitration Act, 1940, made by a party to Court

Appellant was prompted by the application of appellant to file the award in the Civil Court

Article 178 to First Schedule of the Limitation Act, 1908, applies only to cases where a party to the arbitration proceedings applies to the court for the filing of an award but it does not apply to an application filed by a party to the arbitrator for filing the award in the Court

Application to have the award filed in Court must be moved by any party within ninety days of the date on which he receives notice of the making of the award and no such application can be made after the expiry of this period

When the award is filed in the Court by the arbitrator, the limitation as may be applicable to a party is not applicable to him

No period of limitation is prescribed for the arbitrator to file the award in the Court and no limitation runs against a party to the arbitration proceedings requesting the arbitrator to file the award in the Court

Arbitrator is also not placed under an obligation to file the award in the Court within the limitation period of 90 days prescribed in Art.178

Limitation period under the said Article applies for the purpose of filing an application to the court for a direction to the Arbitrator to file the award in the Court

High Court converted the appeal into civil revision and accepted the same, in circumstances.

2024 CLD 1335 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 8, 9 & 30ArbitrationObjections, rejection ofAward made rule of CourtPrinciple

Appellant authorities were aggrieved of rejection of objections filed against award which had been made rule of the Court by Trial Court

Validity

While making award rule of Court, in a case where parties does not file objections, the Court is not supposed to act in a mechanical manner like the proverbial post office and place its seal on it

Court is obligated to look into the award and if it finds patent illegality on the face of award, the Court is empowered to set aside, modify or remit the award for reconsideration

Trial Court neither considered the reasons for setting aside the award nor considered as to whether award was liable to be remitted

By simply observing that award had been delivered by two Arbitrators who were Officers of the Department of appellant, irrespective of the fact whether the award was invalid, it was violative of the contract or otherwise violative of the rule of due process and it had no basis

High Court set aside rule of the Court and remanded the matter to Trial Court for decision afresh on the objection to the award by framing proper issues and allowing the parties to produce evidence

Appeal was allowed in circumstances.

2024 CLC 1957 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 17 & 26-ASpecific Relief Act (I of 1877), Ss.8, 42 & 54Civil Procedure Code (V of 1908), S.115Suit for declaration, injunction and recovery of mesne profits and possessionAward made rule of CourtNon-providing of reasons

Petitioners / plaintiffs were aggrieved of judgment and decree passed by Lower Appellate Court making award as rule of the Court

Validity

Arbitrator was obligated to provide sufficient detail in the reasoning for the award to enable Court to consider any question of law arising out of the award and failure to do so necessitated setting aside of the award

Lower Appellate Court confirmed the award as a rule of the Court, pursuant to Ss. 17 & 26-A of Arbitration Act, 1940

Award was short of detailed reasoning required by S. 26-A of Arbitration Act, 1940

In addressing objections submitted by petitioners / plaintiffs, Lower Appellate Court summarily dismissed them without a substantive judicial evaluation

Lower Appellate Court neglected its obligation under S.17 of Arbitration Act, 1940 to judiciously scrutinize the award, which was a departure from expected standard of judicial scrutiny

Lower Appellate Court transgressed legal boundaries by confirming Arbitrator's award as a rule of the Court

When judgment and decree was marred by legal defects specified in S. 115, C.P.C. it was imperative duty of High Court to rectify such deficiencies

High Court in exercise of revisional jurisdiction declared award rendered by Arbitrator as illegal and invalid and judgment and decree issued by Lower Appellate Court was set aside

High Court remanded the matter to Lower Appellate Court to decide appeal preferred by respondents / defendants afresh

Revision was allowed accordingly.

2019 PLD 255 ISLAMABAD Judicial Precedent

S. 17Award made rule of courtAppealPreconditions

Appeal is barred under S.17 of Arbitration Act, 1940 against a decree passed following a judgment pronounced according to award except on ground that it is excess of, or not otherwise in accordance with law.

2013 CLD 1483 ISLAMABAD Judicial Precedent

Ss. 14, 17 & 39Award made rule of courtJurisdiction of Appellate CourtScope

Appellate Court would not interfere with award, if having been made by Arbitrator after framing of issues.