PAKISTAN RAILWAYS through Chief Controller of Purchase, Pakistan Railways, Lahore vs CRRC ZIYANG CO

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PAKISTAN RAILWAYS through Chief Controller of Purchase, Pakistan Railways, Lahore VS CRRC ZIYANG CO. LIMITED, LAHORE Ss. 14, 17, 30, 33 & 39---Contract Act (IX of 1872), S. 74---Arbitration---Award made rule of Court---Objections against award---Trial Court inviting evidence without deciding the objections ---Dispute between the parties arose and was related to a contract executed on 01.11.2017 and was referred to arbitration by a two-member arbitral tribunal, which rendered the award on 02.07.2021---On 07.07.2021, the arbitrators filed the award before the Civil Court---On 01.09.2021, the petitioner filed objections for setting aside the said award---On 23.11.2022, Civil Court framed the issues and required the parties to submit the list of witnesses for the production of evidence---Said orders were assailed before the High Court by filing a revision petition, which was allowed by setting aside the orders dated 23.11.2022 passed by the Civil Court and case was remanded to the Civil Court for decision afresh on the basis of available record---Validity---Arbitrators were entitled to regulate their own procedure and were not governed by the strict procedure prescribed by the C.P.C. and the rules regarding evidence contained in the Qanun-e-Shahadat, 1984---Arbitrators decided the disputes based on evidence presented during arbitration proceedings---Arbitrators were under no obligation to frame issues as provided in the C.P.C.---Court recorded fresh evidence, disregarding the procedural safeguards in arbitration, such as the arbitrator's exclusive jurisdiction to assess evidence and apply the law---Said fact might lead to inconsistent outcomes and procedural unfairness---If the Court frames issues and records evidence after objections to an award were filed, parties might use this as an opportunity to re-litigate the entire dispute, leading to multiple proceedings on the same issues besides undermining both the legislative intent and the integrity of the arbitral process---Said multiplicity undermined the arbitrator's role in providing a one-time binding decision---Possibility of a trial after the award has been filed in Court creates uncertainty about the finality and enforceability of awards, that discourages the parties from opting for arbitration, defeating the legislative intent to promote arbitration as a preferred mode of dispute resolution---Framing of issues, recording of evidence and hearing arguments post the filing of the award in the Court is bound to increase litigation costs for parties and add to the already heavy workload of Courts---Said fact again defeats the purpose of arbitration as an economical and efficient alternative dispute resolution mechanism---Recording of evidence and conducting a trial effectively converts the Court into an appellate or fact-finding forum, which would be contrary to the statutory scheme envisaged by the Act, 1940---In the case in hand, the sole reason given by the Civil Court for framing the issues was that the contentions raised through the objections formed a factual controversy, which could not be determined without the recording of evidence---Perusal of the issues framed by the Civil Court showed that they were generalized in nature, they lacked specificity and the necessity for framing such issues could not be discovered in the impugned order---Therefore, the High Court did not commit any illegality by setting aside the order dated 23.11.2022 and remanding the matter to the Civil Court with the direction to decide the petitioner's objections to the award dated 02.07.2021 on the basis of the available record---Leave to appeal was declined and the petition was consequently dismissed.

PAKISTAN RAILWAYS through Chief Controller of Purchase, Pakistan Railways, Lahore vs CRRC ZIYANG CO — 2025 CLD 1639 SUPREME-COURT

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