NWFP Forest Development Corporation Vs Syed Muddassar Shah etc

JUDGME|YT SHEET

I]{ THE PESHAWAR HIGH COURT

ABBOTTABAD BENCH

(ludiciol Department)

C. R No. 189-,4./2006

NWFP Forest Development Corporation Office, Hayat Abad Peshawar & two others.

(Petitioners) versus Syed Mudassar Shah & three others. (Respondents)

Present: Mr. Haq l{awaz Khan, Advocate, on behalf of Abdul Rehman Qadar, Advocate, for the petitioners.

Mr. Bakht Jamal Khan, Advocate,.for the respondents.

Date of hearing: 16.09.2024

JUDGMENT

MUHAMMAD IJAZ KHAN. J.- Through

the instant civil revision, the petitioners have challenged the judgment and decree of the learned trial court dated 25.09.2002 whereby the award dated 25.06.1998 was made as rule of the Court and judgment and decree dated 07.12.2005 whereby the appeal filed by the present petitioners was also * dismissed.

2 Precisely, the facts leading to the filing of the instant revision petition are that it was thirty years back on 06.06.1994 when the present

respondent then plaintiff filed a suit for declaration & permanent injunction to the effect that he had entered into an agreement with the defendant No.3 i.e Deputy Forest Manager Siren Forest Development Project Mansehra, with regard to the cutting of trees in forest compartment No.3 Lot No.335 Guzara Dheri Flaleem which agreementlcontract he had successfuiiy and satisfactory completed, however, the defendants now petitioners are imposing fine through impugned office orders dated 02.10.1993 12.10.1993 & 09.05.1994 which are totally wrong, illegal, without any lawful authority and thus ineffective upon his rights. He has also prayed for lSSUanCe of permanent injunction against the defendants now petitioners. Since there was an agreement having arbitration clause i.e. clause No.26, of the agreement, therefore, on the application of the petitioner then defendants the matter was referred to the General Manager Operation NWFP Forest Development Corporation.

* The record would show that the order of referring to the Arbitrator was challenged by the present respondents then plaintiffs before the District Judge through an appeal and then before this Court

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however, his plea was declined and the order of reference to the Arbitrator dated 01.02.1995 was kept maintained. As per the terms of reference the Arbitrator submitted his award on 22.06.1998 to which the present petitioners then defendants submitted their objections, however the said objections were over ruled by the learned trial Court and the Award dated 22.06.1998 was declared as rule of the Court vide one of the impugned judgment and decree dated 25.09.2002.

The aforesaid order of the learned trial Court was then challenged before the District Court of appeal, however, the same was also dismissed vide second impugned judgment and decree dated 07.12.2005.

These judgments and decree were then challenged before this Court through the instant CR No. 189/ 2006 which initially came up for hearing on 30.01 .2009, whereby this Court was pleased to dismiss the sarne being time barred. The aforesaid order of this Court was challenged by the petitioners then defendants before the Supreme v Court of Pakistan through CPLA No.l74-Pl20l0 whictr was allowed and the order of this Court dated 30.01 .2009 was set aside and the case was remanded back to this Court for decision afresh in

accordance with law vide order and judgment dated t2.03.2015

3 After the remand of this case repeated directions were given to the learned counsel for the parties to argue the case being one of the oldest case on the diary of this Court and they were also directed to submit their written arguments, if they could not personally appear. In view of the above today when this case was taken up for hearing learned counsel namely Haq Nawaz Khan Advocate, produced written arguments on behalf of learned counsel for the petitioners, the same are placed on file and they were gone through whereas the learned counsel representing the respondents/plaintiffs argued the case at considerable detail and the record was perused with his able assistance.

4 The record would show that there was an agreement between the parties which agreement was having an arbitration clause. The record further ry shows that when the suit was filed by the present respondent then plaintiff and petitioners then defendants were summoned, they submitted an application dated 20.09.1994 for referring the

dispute/matter to the arbitrator which application was though contested by the respondent then plaintiff, however, the same was allowed and as a result thereof the proceedings in the suit were stayed and the matter was referred to the arbitrator vide order dated 01.02.1995. The record further depicts that the aforesaid order was also challenged by the present respondents then plaintiffs before the District Court of appeal and then before this Court through C.R No.9811995, however, the same were dismissed and as such the order of referring the dispute to the arbitrator remained maintained & upheld throughout. The record further shows that when the arbitrator submitted his award on 22.06.1998, then objections were sought from both parties. The petitioners filed their objections whereas the respondent/plaintiff did not, however, their objections were overruled and the award was declared as rule of the Court

The record would fuither show and as r7 stated hereinabove, that they were the petitioners who submitted an application for referring the dispute to the arbitrator, though the respondent/plaintiff had seriously opposed the same and contested the referring order upto this Court.

I'he record also shows that the arbitrator was nobody else but a high-up/employee of the petitioners Corporation. It is also part of the record that the arbitrator, being an ex-officio, his status and conduct was never objected by the petitioners at any stage of arbitration proceedings and thus the belated objection over arbitrator conduct is arr afterthought exercise which cannot be appreciated in petitioner's favour.

6 The written objections of the petitioners over the arbitration award is available on page No.59 of the file. The same were gonc through rvord by word however, the same al'e nothing but a bunch of vague, evasive and general allegations and having no substance with any documentary proof, therefore, such nature of objections were not at all require recording of any pro & contra evidence and thus the same have rightly been discarded by the learned trial Court.

7 Even otherwisc the award available on '0y file was also gone through cover to cover which out rightly falsifu the so-called allegations of the petitioners as the same would show that the petitioners were duly represented by Dr. Khurshid

Anwar, Deputy Forest Manager, Forest Development Corporation and Tariq Mehmood, works Assistant before the arbitrator whereas respondent/plaintiff personally attended the same.

Their statements were also recorded and they were provided a fair and open opportunity to lay their respective claims before him. These claims and pleas of both the parties are duly reflected in the body of the award. All the claims and counter claims of both of the parties were considered, and determined with reference to the official record of the case. A plain reading of the award would also show that the arbitrator has applied his judicial mind to the facts of the case and thus his report in all respect lSa complete and comprehensive document which could not be either set-aside or ignore on mere bald allegations of the petitioners and thus the learned trial Court has rightly declared it as rule of the Court.

d 8. The written arguments submitted by the learned counsel for the petitioners would show that petitioners wants to invite this Court to act as an appellate Court and to form an another opinion as against the findings of the worthy arbitrator. The written arguments submitted by the learned counsel

for the petitioners speaks of a request to this Court to make a review of the award on the ground that the same is unreasonable, which exercise could not be carried out by this court as it is by now a settled jurisprudence as set by the Apex Court when the whole law on the subject was traced out and summarized in para No.8 of the judgmentr. The same being relevant is reproduced below: - 8- "The principles which emerge from the analysis of above case-law can be summarized as under:-

(1)When a claim or matters in dispute are referred to an arbitrator. he is sole and final Judee of all questions. both of law and of fact.

(2)The arbitrator alone is the iudse of the qualitv as well as the quantit), of evidence.

(3)The very incorporation of section 26-A of the Arbitration Act requiring the arbitrator to furnish reasons for his finding was to enable the Court to examine that the reasons are not inconsistent and contradictory to the material on the record. Although mere brevity of reasons shall not be ground for interference in the award by the Court.

(4)A dispute, the determination of which turns on the true construction of the contract, would be a dispute, under or arising out of or concerning the r (5) contract. Such dispute would fall within the arbitration clause.

The test is whether recourse to the contract, by which the parties are bound, is necessary for the purpose of determining the matter in dispute betrneen them. If such recourse to the contract is necessary, then the matter must come within the scope of the arbitrator's jurisdiction.

(6)The arbitrator could not act arbitrarily, (GERRY IN'|ERNr\TIONAL (PV't LTD Versus AEROFLOT RUSSIAN

INTERNATIONAL, ATRLINES, (2018 SCMR 662)

irrationally, capriciously or independently of the contract.

(7)The authority of an arbitrator is derived from the contract and is governed by the Arbitration Act. A deliberate departure or conscious disregard of the contract not only manifests a disregard of his authority or misconduct on his part but it may tantamount to mala fide action and vitiate thc award.

(8)If no specific question of law is referred, the decision of the arbitrator on that question is not final however much it may be within his jurisdiction and indeed essential for him to decide the question incidentally.

(9)To find out whether the arbitrator has travelled beyond his jurisdiction, it would be necessary to consider the agreement between the parties containing the arbitration clause. An arbitrator acting beyond his jurisdiction is a different ground from an error apparent on the face ofthe award.

(10)The Court cannot review the award. ner entertain anv question as to hether the arbitrators decided orooerlv or in point of law or otherwise.

(11)It is not open to the Court to re-exauliue and reappraise the evidence considered by the arbitrator to hold that the conclusion reached by the arbitrator is wrong.

(12)Where two vlquls are Bosslb&-tbq eourt saaaal interfere with the award b), adopting its own interpretation.

(13)Reasonableness of an award is not a matter for the Court to consider unless the award is prgLo-aler9us-ql-abluld.

(14)An award is not invalid if by a process of V reasoning it may be demonstrated that thc arbitrator has committed some mistake in arriving at his conclusion.

(15)T'he only exceptions to the above rule are those cases where the award is the result of corruption or fraud, and where the question of law necessarily arises on the face of the award, whioh one can say is erroneous.

(16)the Court to

reasons are siven bv arbitrator. as to what lmDe the arbitra to arrive at his conclusion.

(r7) It is not open to the Court to attempt to probe the mental process blu which the arbitrator has reached his conclusion where it is not disclosed by the terms of his award.

(18)The Court does not sit in appeal over the award and should not try to fish or dig out the latent errors in the proceedinss or the aw It can set aside the only if it is from the that dence to or if based legal proposition which is incorrect.

(1e) Court can if there is error, factual or legal. which floats on the surface of the award or the record

(20)The arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. The arbitrator is a tribunal selected by thc parties to decide their disputes according to law and so is bound to follow and apply the law, and if he does not do so he can be set right by the Court provided the error committed by him appears on the face of the award.

(21)There are two different and distinct grounds; one is the error apparent on the face of the award, and the other is that the arbitrator exceeded his jurisdiction. In the latter case, the Courts can look into the arbitration agrcement but in the former, it cannot, unless the agreement was incorporated or recited in the award.

(22)An error in law on the face of the award means that one can find in the award some legal .v proposition which is the basis of the award and which you can then say is erroneous.

(23)A contract is not frustrated merely because the circumstances in which the contract was made are altered.

(24)Ilven in the absence of objections, the Award may be set aside and not made a Rule of the Court if it is a nullity or is prima facie illegal or for any other reason, not fit to be maintained; or suffers from an invalidity r,vhich is self-evident or apparent on the face of the record. The adjudicatory process is limited to the aforesaid

extent only.

(25)While making an awardrule of the Court, in case parties have not filed objections, the Court is not supposed to act in a mechanical manner, like a post office but must subject the award to its judioial scrutiny.

(26)Though it is not possible to give an exhaustive definition as to what may amount to misconduct it is not misconduct on ihe part of the arbitrator to come to an effoneous decision, whether his error is one of fact or law and whether or not his findings of fact are supported by evidence.

(27)Misconduct is of two types: "legal misconduct" and "moral misconduct". Legal misconduct means misconduct in the judicial sense of the word, for example, some honest, though effoneous, breach of duty causing miscarriage of justice; failure to perform the essential duties which are cast on an arbitrator; and any irregularity of action which is not consistent with general principles of equity and good conscience. Regarding moral misconduct; it is essential that there must be lack of good faith, and the arbitrator must be shown to be neither disinterested nor impartial, and proved to have acted without scrupulous regard for the ends of justice.

(28)The arbitrator is said to have misconducted himself in not deciding a specific objection raised by a party regarding the legality of extra claim of the other party.

(29)some of the examples of the term "misconduct" are:

(i)if the arbitrator or umpire fails to decide all the matters which were referred to him;

(ii)if by his award the arbitrator or umpire purports to decide matters which have not in fact been included .v in the agreement or reference,

(iii)if the award is inconsistent, or is uncertain or ambiguous; or even if there is some mistake of fact, although in that case the mistake must be either admitted or at least clear beyond any reasonable doubt; and

(iv)if there has been irregularity in the proceedings (30) Misconduct is not akin to fraud, but it means

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neglect of duties and responsibilities of the Arbitrator.

Similarly in another case the apex Court has also held in para No.7 of the judgment2. The same being relevant is reproduced below:-

We have gone through the objection petition filed by the petitioner against the award and find that all the objections substantially relate to the merits of the case with the insistence that the claim before the Arbitrator had been proved by evidence and findings on merits were not correct. No substantial grounds with precision, and particular allegations lvere pleaded which could be construed to be misconduct by the Arbitrator or the proceedings.

9 In view of the above discussion and exposition of law, the instant revision petition being meritless is hereby dismissed and consequently the impugned judgments & decree of the learned lower fora below respectively dated 25.09.2002 & 07.12.2005 are maintained and upheld.

Announced ,6i t6.09.2024 Muhammad 1'ariq

JUDGE

PRESIDENT OF ISLAMIC REPUBLIC OF PAKISTAN VCTSUS SYED TASNEEM I-IUSSAIN NAQVI and others (2004 SCMR 590)