Arbitration Award Passed without Cogent Reasons

Arbitration Award Passed without Cogent Reasons Case Laws Civil Law Civil Revision Knowledge - Civil Law Lahore High Court Litigation & Arbitration Solutions - Civil Law Mr. Justice Mirza Viqas Rauf in his judgment has decided the issue regarding arbitration award passed without cogent reasons in Civil Revision No. 1518 of 2010.

1. This single judgment shall decide the instant petition as well as connected Civil Revision No.840 of 2011 as there is similarity and commonality of question of facts and law in both these petitions

2. The petitioner assails the vires of judgment and decree dated 15th of March, 2010, whereby the learned Additional District Judge, Mandi Bahauddin, while allowing the respective appeals filed by the respondents set aside the judgment and decree dated 18th of July, 2006 passed by the learned Civil Judge, Mandi Bahauddin.

3. Briefly stated facts giving rise to the filing of instant petition are that Haji Sardar Khan/ deceased (respondent No.3) being arbitrator filed two applications before the learned Civil Judge for making award dated 27.08.1996 as rule of Court. As per application submitted by the Arbitrator in terms of Section 14 of The Arbitration Act, 1940, he was appointed as sole arbitrator to resolve the dispute between the petitioner and respondents No.1 & 2. On filing of award before the Court, the petitioner filed application in terms of Sections 30 & 33 of The Arbitration Act, 1940 challenging the Arbitration Agreement and seeking setting aside of award on various grounds. The same was resisted by the respondents by way of written reply. From the divergent stance of the parties, the learned Civil Judge, Mandi Bahauddin after consolidating all the petitions framed the following issues:

1. Whether the arbitration agreement and arbitration award dated 27.8.96 is liable to be set-aside? OPA.

2. If issue No.1 is proved in negative, whether the arbitration award dated 27.8.96 is liable to be made a rule of court? OPR.

3. Relief.

After framing of issues, both the parties were directed to produce their respective evidence. The petitioner himself appeared as AW-1 and also tendered arbitration agreement as Exhibit-A1 and awards as Exhibit-A2 and Exhibit-A3. On the other hand, on behalf respondent No.1 his special attorney namely Shan Muhammad appeared as RW-1 whereas Khizar Hayat and Khan Muhammad were examined as RW-2 and RW-3 respectively. The respondents also tendered arbitration agreement in evidence as Exhibit-R1. Upon completion of evidence and hearing both the sides, the learned Civil Judge, while allowing the application filed by the petitioner set aside the award dated 27.08.1996 by way of judgment dated 18th of July, 2006. The respondents No.1 & 2 being aggrieved from the said judgment and decree filed their respective appeals before the learned Additional District Judge. The appeals were consolidated and were allowed vide judgment and decree dated 15th of March, 2010, hence this petition.

4. Learned counsel for the petitioner submitted that as per arbitration agreement, it was settled between the parties that dispute will be resolved by two arbitrators Sardar Khan and Aurangzeb Khan, however, while playing fraud with the petitioner, the respondents only mentioned the name of Sardar Khan as Arbitrator in the Arbitration agreement. He added that the award was not tenable on this score alone. Learned counsel contended that the proceedings conducted by the Arbitrator are tainted with malafide and Arbitrator committed misconduct, while holding arbitration proceedings. Learned counsel maintained that the award was procured in an illegal and unlawful manner. Learned counsel argued that the award filed by the Arbitrator lacks any reasoning and the same was rightly set-aside by the learned Civil Judge. It is further contended that the learned Additional District Judge while setting aside the well reasoned judgment and decree of the learned trial Court has erred in law.

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