2016 MLD 1157
Ss. 19,20 & 21----Parties to suit may apply for order of reference---Appointment of arbitrator---Order of reference---Arbitration is a bilateral arrangement for investigation and determination of a dispute or disputes between parties by one or more persons chosen by them, while avoiding the ordinary procedure for resolution of dispute---Arbitral tribunal derives jurisdiction either from arbitration agreement or reference transmitted to him with consent of litigating parties---Proceedings before arbitral tribunal are although not to be regulated in accordance with general principles provided under C.P.C., but such tribunal cannot be absolved from its liability to decide dispute in a just and fair manner.
Ss. 17, 20, 21 & 26-A----Appointment of arbitrator---Order of reference---Power to supersede arbitration when award was void or set aside---Award to set out reasons---Trial court, rejecting objection filed by defendant, decreed the suit making award of arbitrator rule of court; appellate court maintained judgment and decree of Trial Court---Validity---Under S. 21 of Arbitration Act, 1940, all parties interested must be in agreement in sending the matter in difference between them to Arbitrator for its resolution---Consent of plaintiff and defendant-Society had not been obtained for sending the matter to arbitration---All parties interested must have been agreed that the matter would be referred to arbitrators, which was lacking in the present case---Appointment of arbitrators and referring the matter in issue to them was in violation of S. 21 of Arbitration Act, 1940---Arbitrators, while proceeding with the arbitration, had also not made any effort to associate plaintiff and respondent in arbitration proceedings, which had badly affected validity of the award---Section 17 of Arbitration Act, 1940 cast duty upon court to examine the award even on its own in order to see as to whether the same suffered from any patent illegality necessitating either setting aside of the award or its remission to Arbitrator, even when no objection had been filed by any of the parties---Under S. 26 of Arbitration Act, 1940, the arbitrators were duty bound to state in the award the reasons for the same in sufficient details to enable court to consider any question of law arising out of the award---Award in question lacked necessary reasons as required under S. 26-A of Arbitration Act, 1940---Trial court had discarded objection of defendant in cursory manner without applying its judicial mind in terms of S. 17 of Arbitration Act, 1940---Courts below, while making the award rule of court, had acted in illegal and unlawful manner---High Court, holding reference of the matter to arbitration and award rendered on basis thereof illegal and unlawful, set aside impugned judgment and decrees of both courts below and restored proceeding of the suit for decision afresh---Revision petition was allowed, in circumstances.
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