FRIENDS CORPORAION Versus AIRPORT DEVELOPMENT AGENCY

These proceedings are under section 14/17 of the Arbitration Act, 1940 for making the award dated 2‑3‑1994 given by the sole arbitrator namely Shaikh Faiz Ahmed as rule of the Court.

2. The dispute involved is the payment of escalation cost. The plaintiff was awarded a contract to construct R.C.C. shade at Karachi Airport by the defendant. It is the case of the plaintiff that since the defendant failed to pay the agreed amount of escalation, they approached Wafaqi Mohtasib (Federal Ombudsman). On 4‑3‑1992 when the matter was being proceeded before the then Wafaqi Mohtasib Mr. Usman Ali, J. (as he then was), by consent of the parties following order was passed:

"AS for the settlement of the outstanding dues/recoveries, the A.D.A. and the complainant have mutually agreed that Mr. Muhammad Kafil, Ex‑Chief Engineer, M.E.S., or Mr. Vali Muhammad Bhatti, General Manager (Works), P.I.A., may act as the arbitrator. The two sides may discuss the case and the fees with both of them, and thereafter choose any one of these two officers found suitable by them. The fees would be shared equally between the two parties. The award of the arbitrator would be binding on both sides."

3. On 11‑5‑1993 the Sole Arbitrator gave Award which came up before this Court when at the request of both the parties it was remanded back to the learned arbitrator for giving award with his reasoning. Now this award has been filed by the sole arbitrator in compliance of this Court order dated 1‑12‑1994 in Suit No.352/93.

4. I have heard Mr. Safdar Hussain, Advocate on 23‑1‑1995 as well as today. On the last date of hearing when Mr. Safdar Hussain completed his arguments the defendant's counsel was not present, as such I adjourned the case for this date. During the entire proceedings of this suit the learned counsel for the defendant has appeared only once i.e. on 26‑1‑1995 and after filing his objections he has not appeared. In these circumstances, I was constrained to proceed with the case.

5. The defendant has raised objections on making the award rule of this Court in the following manner:

(i) Award suffers from an error of law patent on the face of award.

(ii) The award is bad in law and without jurisdiction.

(iii) The arbitrator has committed judicial misconduct.

(iv) The award has been improperly procured.

6. In his supporting affidavit the defendant has not specifically mentioned any instances in support of the abovesaid plea. I have perused the record of the arbitration proceedings. This award is the same as of the previous one except that this time the learned arbitrator has given reasoning.

7. By this award the defendant has been directed to pay an amount of Rs.1,40,000 (one lac forty thousand) as principal amount which has not been disputed by the plaintiff. The learned sole arbitrator has also awarded Rs.2,99,400 as against the total claim of Rs.8,10,732 as an amount of compensation/profit/mark‑up. Thus, the total amount of the award comes to Rs.4,39,400.

8. Mr. Safdar Hussain, Advocate for the plaintiff has wholeheartedly supported this award and has relied upon an unreported judgment of this Court passed in case of Quality Builders Limited v. K.M.C. (Suit No.17/94) wherein a learned Single Judge in somewhat identical and similar circumstances upheld the award and made the same rule of the Court. In this unreported case the question involved was payment of escalation charges by the owner to the contractor.

9. It is a well‑settled law that while considering objections on the award the Court does not act as a Court of Appeal. The Court will interfere under the circumstances as mentioned in section 30 of the Arbitration Act or if the Award is contrary to the record/evidence. (For further reference see the case of Province of Sindh and 4 others v. Wasim Construction Company (1991 CLC 66). In the case of S.M. Fazil & Company v. M/s Overseas Cotton company (PLD 1959 Karachi 320) it was held by a learned Division Bench of this Court that the question on what basis the damage should be assessed is purely a question of fact and was further held that it is not necessary to obtain the opinion of the Court on such reference. (For further reference see the case of M/s. Moosa Oomar & Co. Limited, Karachi v. M/s. Haji E. Dossa & Sons and another (PLD 1971 Karachi 899) and Trading Corporation of Pakistan Limited v. M/s. Aslam Saeed & Company and 3 others (PLD 1973 Karachi 65)).

10. In view of above legal position, I overrule the objections filed by the defendant and make the award dated 2‑3‑1994 rule of the Court. Decree to be followed. Suit stands disposed of in the above terms.

A.A./F‑10/K Suit decreed.