MUHAMMAD FAROOQ SHAH vs SHAKIRULLAH

' JAVED IQBAL, J.--- This appeal is directed against the judgment dated 16-6-2003 whereby the F.A.O. Preferred on behalf of respondent has been accepted and the judgment/decree of the learned trial Court was set aside and the case was remanded to the learned trial Court for appointment of new Umpire after having consent of the parties, hence this appeal.

2. Mr. Abdul Samad Khan, learned Advocate Supreme Court entered appearance on behalf of appellant and urged with vehemence that no appeal was competent against the judgment and decree of the learned trial Court as such resumption of jurisdiction by the learned High Court was ab initio void and on this score alone the judgment impugned is liable to be set aside. It is next contended that section 26-A of the Arbitration Act, 1940 (hereinafter referred to as the "Arbitration Act") was not made applicable to PATA which aspect of the matter has been ignored by the learned High Court without any rhyme and reason resulting in serious miscarriage of justice. It is also pointed out that the matter has been decided by the learned High Court without perusing the relevant record which in fact was never summoned which caused grave prejudice against the appellant.

3. Qazi Muhammad Jamil, learned Senior Advocate Supreme Court entered appearance for respondent and controverted the viewpoint as canvassed at bar by the learned Advocate Supreme Court on behalf of appellant and supported the judgment impugned for the reasons enumerated therein with the further submission that no award could have been made without having gone through the entire record and without affording proper opportunity of hearing to all concerned which could not be done but on the contrary the award given by Sajjad Ahmad Jan, Advocate (Arbitrator) has been adopted in toto without an independent application of mind therefore, the award given by the Umpire cannot be termed as an award stricto senso because award must be based on evidence and reasoning.

4. We have carefully examined the respective contentions as agitated on behalf of the appellant in the light of relevant provisions of law and record of the case. We have also scanned the entire evidence and perused the judgment of the learned trial Court as well as the judgment impugned. It is an admitted feature of the case that section 26-A of the Arbitration Act has not been made applicable to PATA. The insertion of section 26-A in the Arbitration Act was made on 11-5-1981, which "provides that the reasons for the award should be stated in sufficient detail in the award to enable the Court to consider any question of law arising out of the award. This provision is mandatory and in case of noncompliance the Court shall remit the award. However, on this ground the award cannot be straightaway set aside. The Arbitrators or Umpire are now under a legal obligation to give reasons for the award in sufficient detail. Merely giving reasons in sketchy or summary manner will not amount to compliance with this provision of law. The Arbitrators or Umpire are bound to give reasons in sufficient detail and such reasons should be made in the award itself.

There had been practice that the award were made in non-speaking terms and sometimes the reasons were stated separately which did not form part of the award itself. Now it is compulsory that the reasons should be contained in the award itself. The manner in which the reason has to be given is also specified. It should be in "sufficient detail" so that the Court may be in a position to consider any question of law arising out of the award. The law now contemplates a speaking award". Ghandhara Industries Ltd. v. Government of Pakistan PLD 1982 Kar.

260. There is no doubt that "with the insertion Of section 26-A in the Act a radical change has been brought about in the law of arbitration inasmuch as the old concept that the Arbitrators or the Umpire were not bound to follow technical rules of procedure in proceedings before them because they were not expected under the law to record reason in support of the conclusion arrived at .By them while adjudicating the dispute between the parties has been done away with. For reasons, which it is not necessary to state here, it has been considered expedient that the Arbitrators or the Umpire should state in the award the reasons for the award in sufficient detail to enable the Court to consider any question of law arising out of the award. Section 26-A has accordingly been inserted in the Act." Province of Punjab v. Industrial Machine Pools 1986 M LD 501.

5. There is no cavil to the proposition that prior to insertion of section 26-A in the Arbitration Act the Arbitrator/Umpire was not supposed to give reasoning for the award but it must not be lost sight of that award is not to be made in vacuum but the entire evidence is required to be considered. It would be a misconceived motion that prior to insertion of section 26-A in the Arbitration Act the award could have been made by the Arbitrator in accordance with his own whims and wishes which could never be an object of Arbitration Act and it would not be in consonance with the provisions as enumerated in sections 13, C 16 and Schedule-I (Para.6) of the Arbitration Act. It is well-settled that there must be purity in the administration of justice as well as in the administration of quasi-justice which are involved in the adjudicatory process before the Arbitrators. It is also well-settled that once the Arbitrator enters in arbitration, the Arbitrator must not be guilty of any act which can possibly be construed as indicative of partiality or unfairness. A bare perusal of the added section 26-A would reveal that after insertion it is obligatory upon the Arbitrator or Umpire to give reasons in sufficient detail and such reasons should be made in the award F itself. A line of distinction is to be drawn in between "sufficient detail/reasons" and that of "application of mind" to determine the controversy as both are not synonymous and interchangeable. By no stretch of imagination it can be imagined that priort to section 26-A in the Arbitration Act, the Arbitrator or Umpire were not bound to examine the entire controversy with diligent application of mind to make an in depth scrutiny of the evidence and thereafter draw conclusion irrespective of the fact whether it was to be mentioned in the award itself or otherwise, H would hardly make any difference as an Arbitrator or Umpire cannot be relieved of his duties i,e, to set the controversy at naught by imparting speedy justice after having taken into consideration all the relevant factors. The Arbitrator and Umpire are supposed to act diligently and with vigilance even prior to the insertion of section 26-A. It may not be out of place to mention here that "the ordinary meaning of the word "Umpire" is a person, who is to decide upon disagreement. There is a technical meaning attached to the expression, which denotes a person, who is to settle any difference that may arise between the Arbitrators. It is in this sense that the expression is used in the Act", (2000 Arbitration Manual by M.A. Zafar, p.760), which means that Umpire is required to I settle any difference that may arise between the Arbitrators which cannot be settled without having gone through the entire record with independent and diligent application of mind which could not be done in this case. There is no cavil to the proposition that prima facie the duties of an Umpire are the same as those of Arbitrator. We are conscious of the fact that duty of the Court is to give every reasonable intendment in favor of award and lean towards upholding rather than vitiating the same but after having gone through the verdict of Umpire we have no doubt that the Umpire has done nothing but toed the line of action as determined by Sajjad Ahmad Jan, Advocate (Arbitrator) and endorsed his views without any addition, deletion or insertion which depicts that the entire evidence was neither examined nor the factual aspects of the controversy were appreciated in its true perspective. Where an Umpire has applied his mind honestly and arrived at a decision to the best of his ability, the fact that a Judge might take different view is not a ground for holding the award as illegal but the award given in this case by the Umpire is indicative of the fact that there was no application of mind at all. As mentioned hereinabove the Umpire has failed to determine the controversy diligently and it appears that there was no application of M mind but the award given by Sajjad Ahmad Jan, Advocate (Arbitrator) was followed without examining the viewpoint of second Arbitrator appointed by the respondent.

6. It is to be noted that the appeal has been converted into revision and the objection of learned Advocate Supreme Court on behalf of appellant has been taken care of by the learned High Court that no appeal would be competent. We have also observed that no prejudice whatsoever has been caused to the appellant by the judgment impugned as the learned trial Court has been directed to appoint another Umpire N after obtaining the consent of the parties to set the controversy at naught forever. The appellant would have an ample opportunity to canvass his point of view before the Umpire.

' In sequel to above mentioned discussion we are of the view that the judgment impugned being well-reasoned does not call for any interference. The appeal being meritless is dismissed and leave refused.