Law: Arbitration Act, 1940

Section: X,20(4)

Law: Cantonments Act, 1924

Section: II,84

Law: Pakistan Cantonment Service Rules, 1952

Section:

(a)    Arbitration Act (X of 1940)-------S.20(4)---Cantonments Act (II of 1924), S.84---Appointment of arbitrator--Dispute arose between the parties with regard to initial work order and subsequent changes/enhancement in the costs for the project---Appointment of arbitrator was to be made in such manner as may be agreed upon between the parties in terms of the contract---Contention of the appellant was that an independent arbitrator ought to have been appointed instead of appointment of the arbitrator in terms of the contract owing to his biasness and partiality being part of the respondentdepartment as its appellate authority---Validity---Whole object underlying the Arbitration Act, 1940 (Act) is to enforce the arbitration agreement whereby the parties bind themselves down to have their disputes, arising out of transaction to which such an agreement is applicable, adjudicated upon and decided by the domestic tribunal---Under clause (4) of S.20 of the Act, power of the Court to order reference to an arbitrator appointed by itself did not confer the authority on the Court to substitute the original agreement of the parties by an entirely new agreement of its own choice---If the parties out of their free-will and consent appointed a third person knowing fully well his relation with any one of the parties to dispute, such arbitration agreement shall not be invalided on the principle of bias and the arbitrator cannot be removed on this ground---Known interest of an arbitrator did not in any way invalidate his appointment, and it was only in a case where such an interest was concealed or came into existence after the appointment, that the appointment was rendered invalid or was liable to be revoked---Appellant was well aware of the authority and department of the arbitrator from the very first date and the Arbitrator was not the official of the respondent-department rather he was an Appellate Authority under S.84 of the Cantonments Act, 1924, who was appointed by the Government as defined under Pakistan Cantonment Service Rules, 1952---Arbitrator was not a participant in the meetings of Cantonment Board, therefore, any kind of allegation of…