PUNJAB PROVINCE through Secretary to the Government of Punjab, Communication and Works Department, Lahore and others vs M_s. HUSNAIN CONSTRUCTION COMPANY LIMITED
This petition for leave to appeal arises from a dispute between the Punjab Province and a construction company regarding the appointment of arbitrators. The core legal question is whether individuals who have retired from their positions as Superintending Engineers remain qualified to serve as arbitrators under an arbitration agreement that specifically mandates the appointment of Superintending Engineers. The petitioners challenged the appointment of two arbitrators, arguing that their appointment was invalid because they had already retired from service at the time of their second appointment by the Senior Civil Judge. The Supreme Court granted leave to appeal, holding that the matter requires a definitive determination on whether the qualification of being a 'Superintending Engineer' is a condition precedent that must be satisfied at the time of appointment, even if the appointees had previously held such positions. The principle established is that where an arbitration agreement prescribes specific professional qualifications for arbitrators, the court must ensure that the appointees meet those criteria at the time of their appointment to maintain the validity of the arbitral process.
- Can an individual who has retired from the position of Superintending Engineer be appointed as an arbitrator when the arbitration agreement specifically requires the appointment of Superintending Engineers?
- Does the qualification requirement for an arbitrator under an agreement apply at the time of the appointment by the court?
- Section 12, Arbitration Act 1940
- Section 20, Arbitration Act 1940
ORDER
' AJMAL MIAN, J.---This is a petition for leave to appeal against the order dated 18-5-1993 passed by a learned Single Judge of the Lahore High Court in Civil Revision No,778 of 1993 filed by the petitioners against the order dated 21-2-1993 of the learned Civil Judge, First Class, Lahore, dismissing the petitioners' application under section 12 of the Arbitration Act, 1940, hereinafter referred to as the Act, declining the same.
2. The brief facts are that the petitioners awarded a contract to the respondent for construction of a Road Bridge over River Indus near Ghazi Ghat Guide Bank Right on 19-7-1979. It appears that differences arose between the parties which culminated in filing of an application by the respondent under section 20 of the Act for filing of the arbitration agreement and making reference in terms of clause 25-A(c) of the agreement, which envisaged the appointment of two Superintending Engineers. It seems that Ch. Munir Ahmad and Sheikh Ghulam Muhammad were appointed as the two arbitrators by the Senior Civil Judge, Lahore, in whose Court the above application under section 20 of the Act was filed by an order dated 22-2-1986. The aforesaid order was assailed. By the petitioners through Civil Revision No,1644 of 1986, which was dismissed on 28- 5-1989, but with the consent of the parties, Mr. Justice (Retd.) Ataullah Sajjad was appointed as the sole arbitrator in place of the above two arbitrators. It appears that later on the petitioners filed C.M. No,77-C of 1990 praying that the above order dated 28-5-1989 be reviewed as Mr. Justice
(Retd) Ataullah Sajjad was appointed as the Chairman of N.I.R.C. And, therefore, was incapacitated to act as the arbitrator. The petitioners have not filed copy of the order passed in the above application but from the impugned order it seems that the learned Senior Civil Judge removed Mr. Justice (Retd.) Ataullah Sajjad as arbitrator and appointed the aforesaid two arbitrators. After that, the petitioners filed above application under section 12 of the Act for revocation of the authority of the two arbitrators on the ground that before they were appointed second time as the arbitrators, they had ceased to be Superintending Engineers, which was the qualification provided for in the above arbitration clause. However, the above application was declined by the learned Senior Civil Judge by his order dated 21-2-1993, against which aforesaid civil revision was filed, which has been dismissed through the impugned order. The petitioners have, therefore, filed the present petition for leave to appeal.
3. In support of the above petition, Mr. Shabbar Raza Rizvi, learned A.A.-G. Appearing for the petitioners, has contended that since the second appointment of the above arbitrators was made on 14-7-1992 after they had already retired from the service as Superintending Engineers, the same was not in terms of the arbitration clause 25-A(c) of the agreement.
4. We are inclined to grant leave to consider the question, whether on 14-7-1992 Ch. Munir Ahmad and Sheikh Ghulam Muhammad, who had retired from service much before the above date, could be appointed as the arbitrators, by learned Senior Civil Judge. Leave is, accordingly, granted.