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First Appeal from Original Order No. 181 of 1983, decided on 28th December, 1985.

---Ss. 20 & 39--Nomination of arbitrators and submission of nomination in Court--Order for--Legality--Non-speaking order of Court below, directing parties to nominate their arbitrator and to submit their nomination in Court passed without conscious application of mind to language or requirements of nomination and import of arbitration agreement, held, suffered from legal infirmity as a result of complete misdirection on part of Court below--High Court accepting appeal set aside order of Court below and sent back case for disposal of matter in accordance with law after proper application of mind through reasoned order.

Province of Punjab and another v. Messrs Industrial Machine Pool Lahore P L D 1978 Lah. 829 ref.

Aftab lqbal Ch. for Appellant.

F.K. Kureishy for Respondent.

Date of hearing: 13th February, 1984.

This first appeal against the order has been filed by Province of Punjab to call in question the impugned order of la learned Civil Judge in terms of section 20 of the Arbitration Act dated 27-6-1983 and in the process rejected the objections of the appellant and directed the parties to nominate their arbitrators and to submit their nomination on the next date.

2. The brief facts are that the appellant had awarded contract to respondent which was witnessed by a duly executed agreement. The parties were at variance and contractor, according to his version, took all the steps to have the matter resolved. Having failed in his efforts, he moved an application before the civil Court. A perusal of the impugned order of the learned Civil Judge shows that the present appellants who were respondents before the civil Court resisted this application alleging that the petitioner had no cause of action, it was mala fide, beyond limitation and the Court had no jurisdiction. These objections were answered by the trial Court. That the contract having been made in between the parties and arrived at Lahore, the Civil Court had the jurisdiction; the cause of action was to be determined by the arbitrator and not by the Court. In respect to point of limitation, the learned Civil Judge noted that respondents .have submitted a copy of the agreement which contains the arbitration clause. He further took note of the fact that two arbitrators are to be appointed. He accordingly directed the parties to nominate their arbitrators and submit their nominations by 3-7-1983.

3. Learned counsel appearing in support of the appeal submitted that the question of limitation ought to have been examined by the learned Civil Judge. The learned counsel. I think, failed to elaborate his objection whether it related to moving of application under section 20 of the Arbitration Act or the claim itself was objected to be barred by time. If the objection related to limitation for moving the application under the aforesaid provisions then it would be governed by Article 181 of the Limitation Act and right to apply accrues when differences had arisen. However, if the objection be that the claim itself was time-barred then it being a mixed question of law and fact, requiring inquiry, such a question is better left to be determined by the arbitrator who is the sole Judge of fact of law. The sketchy order of the learned Civil Judge does not show that he was conscious of the nature of objection. I also find- that the learned Civil Judge misdirected .himself in law in omitting to take notice of the fact that there was no consent course between the parties as regards the nomination of arbitrators. A copy of the arbitration agreement had been filed before him and, therefore, he was called upon to carefully peruse the agreement as regards the resolution of differences and disputes as provided in that agreement through arbitration. He did note the fact that two arbitrators are to De appointed, but he failed to take further notice of the fact that the appointment of two arbitrators was specified and agree to between the parties...The Court below was thus further required to construe whether the two arbitrators were to be the serving officer of the department and if so he was obliged to observe that the parties should nominate their respective arbitrators in terms thereof. There is nothing on the record to show justification for departure from this course. In oblivion of this requirement, he merely content himself by observing that the parties be directed to nominate their arbitrators and submit their nominations on the given date. This has led to the grievance of the Punjab Government because it is alleged that it was made convenient for the respondent to nominate as his arbitrator a person who was not covered by the arbitration agreement inasmuch as a retired officer had been nominated by the respondent. There is no conscious application of the mind of the learned Civil Judge to the language or requirements and import of arbitration agreement. It was thus his bounden duty to apprise himself of the stipulations of arbitration clause and he should not have, by passing a vague order, thrown the matter open for further controversy or provided an opening for one of the parties to indirectly achieve what could not have been achieved directly under the law.

4. Learned counsel for the respondent tried to defend the order of the learned Civil Judge on the strength of decision of this Court in re: Province of Punjab and another v. Messers Industrial Machine Pool, Lahore P L D 1978 Lah. 829 by submitting that agreement to submit an existing prospective dispute to arbitration rests on the consent of the parties and such agreement may be amended, modified, rescinded or revoked by mutual consent or by acts or conduct of parties. In the cited precedent, it was observed, that the law of arbitration was a law of compromise within the framework of agreement of parties, if not opposed to public policy and that its very nature was not different from conciliation.

5. I have no cavil with this enunication of law, but I must observe that the principles laid down do not stand attracted to the facts of the present case. It is not a case of consent of the parties, but the parties are very much at variance. The judicial process of the Court is intended to bring quick relief to the parties and not multiply or breed litigation on account of acts of omission or commission in the course of exercise of jurisdiction. It was required of the learned Civil Judge, as already observed, to examine the arbitration clause embodied in the contract agreement and construe it properly and then to direct the parties to nominate their arbitrators in terms thereof.

6. The import of arbitration agreement was sought to be argued before this Court in an oblique manner, but I do not think I am called upon to enter into this contentious question in appeal without at first there being a determination by the learned Civil Judge.

7. Before parting with the case, I may refer to the relief claimed by the respondent under section 20 of the Arbitration Act. The relief claimed inter alia, was:

(a) that the Executive Engineer may be directed-to file the agreement of the work in question in Court;

(b) respondents be directed to nominate their nominee on the panel of arbitrators and the arbitrator so nominated alongwith the nominee of the petitioner be directed to adjudicate upon the dispute between the parties and file the award with the Court within time allowed to them.

The above shows that the agreement was required to be filed in Court and relief claimed in terms thereof. In the face of this obvious position, the learned Civil Judge, it may once again be emphasised could not simply ignore the arbitration agreement in so far as it pertains to the requirements of nomination of specified arbitrators by the either side. There has, therefore, been complete misdirection on the part otl the learned Civil Judge in the relevant respect.

The net result of above discussion is that the appeal is accepted, impugned order set aside and case is sent back to the learned Civil Judge for disposal of the matter in accordance with law and after proper application of mind through a reasoned order. In the circumstances of the case, there shall, however, be no order as to costs.

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