NATIONAL HIGHWAY AUTHORITY vs HUSNAIN COTEX LIMITED Ss — 2025 CLD 598 ISLAMABAD

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NATIONAL HIGHWAY AUTHORITY VS HUSNAIN COTEX LIMITED Ss.16 & 30---Civil Procedure Code (V of 1908), S.151---Inherent powers of Court---arbitration proceedings---Construction contract---Variation in contract terms---Instruction by Engineer for early completion deemed variation under the originally settled terms---Cost escalation and entitlement to compensation---Binding nature of directions issued under contract and their impact on performance and compensation---The National Highway authority (NHa), the appellant, awarded a contract to M/s Hussain Cotex Limited (Respondent No. 1) for the construction of a bridge over the River Chenab at Sher Shah, District Muzaffargarh---The contract, signed on 04.02.2005, was to commence on 25.02.2005 and be completed in 30 months (by 28.08.2007) with a total value of Rs. 845 million---Respondent No. 1 initially planned to perform piling in the riverbed during low flow seasons, however, on the direction of the appellant's Engineer, the strategy was revised to complete one of the two bridges earlier (by 14.08.2006) to facilitate urgent traffic diversion---This instruction was considered a variation under Clause 51.1(f) of the Contract, as it imposed work during high-flow seasons, increasing costs---a dispute arose over additional compensation claimed by Respondent No. 1 due to this change---The engineer and resident engineer initially assessed the compensation rate at Rs. 77.83/m³ for the earth platform---Respondent No. 1 submitted a revised rate of Rs. 169.66/m³, which the appellant rejected, leading the matter to arbitration---The sole arbitrator issued an award on 10.04.2010, accepting that the engineer's directive constituted a contractual variation under Cl. 51.1(f) and awarded compensation at Rs. 77.83/m³---Dissatisfied, the appellant filed an application under S. 16 of the arbitration act, 1940 and S. 151, C.P.C. to set aside the award, which was dismissed by the Trial Court against which the appeal was filed---appellant argued that the arbitrator did not allow proper opportunity to lead evidence, amounting to misconduct---Held: The findings of sole arbitrator were based on documents placed on record and arguments of both parties---Since NHa raised no objection during the proceedings of the award, such objection could not be raised before the Trial Court or before the High Court, hence it was not a misconduct---The work undertaken in respect of the earthen platform and the comprehensive revision of the work methodology entailed by the appellant's change instructions and requirements during the course of project, added considerably and enhanced the cost of Respondent No.1---It was fairly held by the arbitrator that appellant could not be allowed to wiggle out of his financial liabilities on the basis of a mere technicality---In the circumstances the appeal having no force was dismissed---appeal dismissed.

NATIONAL HIGHWAY AUTHORITY vs HUSNAIN COTEX LIMITED Ss — 2025 CLD 598 ISLAMABAD

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