MIAN CORPORATION through their MANAGING PARTNER vs M/s. LEVER
This civil petition for leave to appeal arose from a judgment of the Sindh High Court, which had dismissed the petitioner's objections to an arbitration award and made the award a rule of the court. The petitioner, a former sole distribution agent of the respondent, had filed a suit for specific performance and damages, which was referred to arbitration pursuant to an arbitration clause. The arbitrator rejected the petitioner's claims, finding them barred by limitation and rejecting the plea for exclusion of time under Section 14 of the Limitation Act 1908. The core legal question before the Supreme Court was whether the court can reappraise evidence or sit as a court of appeal when examining the correctness and legality of an arbitration award. The Supreme Court dismissed the petition and refused leave, holding that an arbitrator is the final judge on questions of law and facts. The Court laid down the principle that while examining an award, the court does not sit in appeal, cannot undertake a reappraisal of evidence to discover errors, and cannot disturb an award merely because a different view of the facts was possible.
- Does a court examining the validity of an arbitration award sit as a court of appeal to undertake a reappraisal of evidence?
- Can an arbitration award be lawfully disturbed or set aside on the sole ground that a different view of the facts was possible?
- Under what circumstances may an arbitration award be discarded by a court?
- Section 14(2), Arbitration Act 1940
- Section 14, Limitation Act 1908
Rana Bhagwandas, J.--Petitioner seeks leave to appeal against Sindh High Court judgment dated 23.1.2004 dismissing its objections to the arbitration award made by Mr. Justice (Retd) G.H. Malik to whom the dispute was referred by the High Court in Suit No, 875 of 2000.
2. Petitioner being the sole distribution agent of the respondent Company with right to distribute their products of tea, on termination of the agency, filed a suit for specific performance of contract and claimed damages to the tune of 10,064,500/- before the Sindh High Court. In view of arbitration clause in the agency agreement between the parties, High Court referred the dispute to the Arbitrator, who, after conducting requisite proceedings and entertaining claims of the petitioner and objections, by the Company decided against the petitioner, through his award dated 15.5.2002 and filed by the same before the High Court in terms of Section 14(2) of the Arbitration Act 1940.
3. Upon notice of filing of the award, petitioner filed a number of objections alleging misconduct against the Arbitrator, which were resisted by respondent. High Court decided all the objections as being without any merit and on acceptance of the award, made the same rule of the Court and dismissed the suit with no order as to costs.
4. We have heard learned counsel for the parties at quite some length and gone through the impugned judgment and the record.
5. Main contention of the learned counsel for the petitioner appears to be that his claim was not barred by limitation and that the Arbitrator fell into error by not allowing exclusion of time as permissible under Section 14 of the Limitation Act 1908 because the petitioner had been prosecuting his remedy before proper forums bona fide and in good faith, which period ought to have been excluded while reckoning the period of limitation.
6. We have carefully considered the submission of the learned counsel, which was also attended to by the learned Arbitrator and found against the petitioner. Petitioner had agitated this question before the Sindh High Court as well but the High Court has discarded the same for valid reasons, to which no exception can be taken.
7. Learned counsel attempted to persuade us to examine the merits of the claim of the petitioner involving disputed questions of fact. It is well settled that the Arbitrator acts in a quasi judicial manner and his decision is entitled to utmost respect and weight unless the misconduct is not only alleged but also proved against him to the satisfaction of the Court. The arbitration award may, however, be discarded if the findings are contrary to law and the material on record. Learned counsel has been unable to pinpoint any inherent legal infirmity or defect or want of jurisdiction on the part of the Arbitrator who has elaborately dealt with the claim of the petitioner in minute details which reference to the explanation furnished by the respondent Company. Suffice it to observe that while examining the award Court does not sit in appeal over the award and has to satisfy itself that the award does not run counter to the settled principles of law and the material available on record. Indeed Arbitrator is final judge on the questions of law and facts and it is not open to a party to challenge the decision if it is otherwise valid. If an arbitrator has made an award in terms of the submissions made before him, no adverse inference can be drawn against him. An award cannot be lawfully disturbed on the premise that a different view was possible if the facts were appreciated from a different angle. In fact the Court while examining the correctness and legality of the ward does not act as a Court of appeal and cannot undertake reappraisal of evidence recorded by the Arbitrator in order to discover the error or infirmity in the award. Learned counsel for the respondent has referred to Pakistan Steel Mills Corporation u. Mustafa Sons (Pvt.) Ltd. (PLD 2003 S.C. 301), which fully supports the impugned judgment as well as the view, taken by us in this petition.
8. For the aforesaid facts, circumstances and reasons, we find no merit in this petition, which is accordingly dismissed and leave to appeal refused.