ORDER SHEET

HIGH COURT OF SINDH, KARACHI

J.M. No.99 of 2011

   Date                     Order with signature of Judge

1.For orders on compliance report dated 8.9.2012

2.For hearing of main application

M/s.Besrock (Pvt.) Ltd.            …….         Applicant

                                        Versus

Pakistan Steel Mills Corporation     ….    Respondent

Date of hearing 31.10.2012

Mr.Munir-ur-Rehman, Advocate for the applicant.

None present for the respondent

                                        -----

Muhammad Ali Mazhar, J:     The applicant has moved this application under section 14 (2) of the Arbitration Act, 1940 and claimed the relief as under :-

“That the applicant therefore prays that this hon’ble court be pleased to direct the umpire to file the award in court with full record of claim, counter claim depositions and all documents and upon filing of the same further proceedings be taken according to law.”

2.     The brief facts of the case are that the plaintiff and defendant entered into a contract for the sale and purchase of Iron ore (fine) at Karachi on 6.7.2004. In view of Clause 15 of the contract, it was agreed that any dispute between the parties may be resolved through arbitration under the Arbitration Act, 1940. According to aforesaid clause parties were allowed to appoint arbitrators and the arbitrators were given right to appoint an Umpire. Due to dispute between the parties, the respondent repudiated the contract vide letter dated 31.8.2005. Consequently, the applicant through its letter dated 17.10.05 informed the respondent regarding the appointment of their Arbitrator and in response, the respondent intimated the name of their learned Arbitrator.

3.     After appointment of arbitrators they entered into a reference and on 31.8.2006 appointed learned Umpire. The arbitration proceedings were conducted. Learned Arbitrator of the respondent in his opinion/award dated 30.6.2006 rejected the claim of the applicant and against the claim of both the parties, it was further stated that no party is entitled to any relief, while the Arbitrator of applicant in his opinion/award dated 10.7.2010 found that the claimant/applicant was entitled to Rs.400,206,000/- as damages against the respondent.

4.     Due to difference of opinion between the two learned arbitrators, the matter was referred to the learned Umpire, who made the award, on 13.7.2011 and sent the copies to the parties. The applicant requested the learned umpire to file the award in court with all record and proceedings, but the learned Umpire could not file the same in court.

5.     This judicial misc. application was lastly fixed before me on 13.8.2012, when I issued direction to the Registrar of this Court to contact the learned umpire and submit his report whether the learned umpire is willing to file award and what is the progress in the matter. The Registrar has submitted his report on 8.9.2012 in which he has stated that he contacted the learned umpire on 8.9.2012, who assured him to furnish/file the award in court during the course of the day i.e. upto 2:00 p.m. and he further stated that on account of some defect in the printer the award could not be filed earlier in this court. Mr. Munir-ur-Rehman, learned counsel stated at bar that no award has been filed so far by the learned Umpire. Office has also not put up any note that the award has been filed on 8.9.2012.

6.     Under Section 14 of the Arbitration Act 1940, it is clearly mentioned that when the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof. Under sub-section (2)  it is further provided that the arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any deposition and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award.

7.     Under Section 3 of the Arbitration Act, 1940 it is further provided that an arbitration agreement, unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule insofar as they are applicable to the reference. According to Article 3 of the First Schedule it is clearly provided that the arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow. While under Article 5 it is provided that the umpire shall make his award within two months of entering on the reference or within such extended time as the court may allow.

8.     Since in this case the award was to be delivered by learned umpire and in this particular case two months’ time was available with the learned umpire to conclude the arbitration proceedings and submit the award. Though the award was made by learned Umpire on 30.7.2011 and the copies were also supplied, but no award has been filed in this court for making the award rule of the court under Section 17 of the Arbitration Act, 1940.

9.     The respondent has filed counter affidavit to this application and in paragraph 2 of their counter affidavit, the Chief Law Officer of Pakistan Steel Mill clearly stated that the respondent has no objection for filing the award by the learned umpire, however, they pointed out that the figure of 1300 per metric ton is to be corrected and substituted instead of 13000 per metric ton and after necessary correction the award may be filed, but in principle they agreed that the award may be filed in court and they have not opposed the application moved by the applicant under section 14(2)of the Arbitration Act, 1940.

10.   Section 14 of the Arbitration Act is related to the procedure in filing an award which is ministerial act and nowhere precludes Arbitrator or Umpire from filing award suo motu. Party other than arbitrator can only file award in court when specifically authorized by the arbitrator. Thus, for all intents and purposes it is the role of the Arbitrator/Umpire either to file award himself to make it rule of court or may permit/authorize the parties or one of the parties to file it in court. Provision of arbitration is a selection by parties for an expeditious solution of their disputes and to dispense with technicalities of law. Under the Act the only provision prescribed for filing award is contained under section 14 sub-section (2) of the Arbitration Act, 1940. The existence of an agreement in writing is the foundation of jurisdiction of the court to direct arbitrator to cause the award to be filed. There is also another aspect in which non-filing of award in court by Arbitrator despite direction of the court, a true copy of award can be taken into consideration by the court as secondary evidence.

11.   The brief history of the arbitration law clearly shows that words “date of service of the notice of the making of award” have technical meaning attached to them and can only mean the notice provided by section 14 of the Arbitration Act i.e. notice in writing  to the parties of the making and signing of the award mere fact that parties had the knowledge of the fact that the award had been made or the fact that they had signed the award would not start the time running under Article 178 of the Limitation Act. The critical reading of section 14 of the Arbitration Act makes it perfectly clear that after an award is given, any party to the arbitration agreement or any person claiming under such party may request the arbitrator or umpire to cause the award or its signed copy thereof together any disposition or documents which may have been taken and proved to be filed in court. No limitation has been provided by the Limitation Act for any party to the arbitration agreement to request the arbitrator or umpire to cause the award to be filed in court nor is there any limitation prescribed in the Limitation Act for arbitrator or umpire to cause the award to be filed in court upon such request. If a party to the arbitration agreement does make a request to the arbitrator or umpire it can directly come to the court and request it to order arbitrator or the umpire to file the award or a signed copy thereto. Such application will be governed by Article 178 of the Limitation Act, if notice of the award has been given as provided under sub-section (1) of Section 14 of the Arbitration Act, but if no notice is given then the only request which would be attracted is to be residuary Article 181 of the Limitation Act, which provides a party three years from the date when right to apply accrues. The object of Section 14 (1) of the Arbitration Act, 1940 relates to notice of the making of award is only to inform the parties that the award has been made so that they may file application for filing of the award. Such application is to be filed within 90 days of the service of the notice of the making of award under Article 178 of the Limitation Act. Similarly, the object of giving notice of the filing of award is to enable the parties to file an application for setting aside of the award. Such application has to be made under Article 158 of the Limitation Act within 30 days of the service of notice of the award. Reference can be made to PLD 1960 (W.P) Lahore 591 (Muhammad Shafi & others v. Muhammad Sabir & others) and PLD 1960 (W.P) Lahore 601 (Sh.Maboob Alam v. Sh.Mumtaz Ahmad).

12.   For the foregoing reasons this application is allowed. The learned Umpire is directed to file the award within a period of 20 days together with depositions and documents which have been taken and proved before him.

JUDGE