Law:

Section: 11(2)

(a) Arbitration--- ----Proceedings---Principles of natural justice---Applicability---Arbitrator is not bound by technical rules of procedure but he cannot ignore rules of natural justice---Thread of natural justice should run through entire arbitration proceedings--- Principles of natural justice require that a party who is to be prejudiced by an order of arbitrator should be heard first. (b) Arbitration Act (X of 1940)--- ----S. 11 (2)---"Misconduct"---Connotation---Misconduct for purposes of Arbitration Act, 1940 is legal misconduct and is not moral turpitude, dishonesty or any immoral or unethical conduct---Misconduct not amounting to moral turpitude is called 'legal misconduct' and has a very wide meaning---Legal misconduct means misconduct in judicial sense arising from some honest though erroneous breach and neglect of duty and responsibility on part of arbitrator causing miscarriage of justice; there may be ample misconduct in a legal sense to make the court set aside award even when there is no ground to impute slightest improper motive to arbitrator---Misconduct includes failure to perform essential duties which are cast on an arbitrator; it also includes any irregularity of action which is not consonant with general principles of equity and good conscience which ought to govern conduct of an arbitrator. Pakistan Steel Mills Corporation, Karachi v. Messrs Mustafa Sons (Pvt.) Ltd., Karachi PLD 2033 SC 301 and Lodon Export Corporation Ltd. v. Jubillee Coffee Roasting Company Ltd., (1958) 1 WLR 661 = (1958) 2 All ER 411 rel. (c) Arbitration--- ----Deriving of jurisdiction by arbitrator---Scope--- Court of law derives jurisdiction from statute, arbitrator derives jurisdiction from agreement---Agreement may be altered by course of conduct---Arbitration is a creature of contract and consent can confer jurisdiction; it is a private procedure established by an agreement between parties--- Parties to such an agreement can vary, amend or waive, either expressly or impliedly by conduct, procedure established by agreement. (d) Waiver--- ----Scope---Intentional relinquishment of a known right or voluntary relinquishment or abandonment of a known existing legal…

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