Law:

Section:

(a) Arbitration Act (X of 1940)-------S. 26-A---Constitution of Pakistan (1973), Art.185 (3)---Leave to appeal was granted by Supreme Court to consider; whether under the circumstances, High Court was not justified in disallowing certain amount which was awarded by arbitrator; whether award was in conflict with the provisions of S.26-A of Arbitration Act, 1940 and whether finding of Arbitrator on the point of damages was not in accordance with the law. (b) Arbitration Act (X of 1940)--- ----Ss. 17 & 26-A---Making award rule of Court---Failure to give reasons for findings in award---Effect---Court not agreeing with findings of arbitrator---Damages were awarded by arbitrator solely on the basis of statement of purchaser---Trial Court disagreed with such compensation for the reason that there was no evidence recorded to that effect---Rest of the findings of arbitrator were maintained and the award was made rule of the Court---Plea raised by purchaser was that Trial Court was not entitled to disagree with the findings of arbitrator---Validity---Finding of arbitrator on the issue of damages indicated absence of evidence on the basis of which he had awarded compensation---Arbitrator had awarded compensation simply on the ground that the purchaser was not -questioned on behalf of the department on the issue---Such failure by the department did not go to prove the loss caused to the purchaser---Burden was on the purchaser to have produced independent evidence of damage caused to his reputation and goodwill on account of non-performance of the contract by the department---Bald statement of purchaser that he had suffered loss on such account was not sufficient to establish the claim---High Court rightly denied damages for loss of goodwill and reputation---Court did not sit in appeal from the findings of arbitrator but at the same time it was empowered to reverse findings of arbitrator on any issue if the same did not find support from the evidence---Section 26-A of Arbitration Act, 1940, requiring Arbitrator to furnish reasons for his finding was to enable the Court to examine soundness of reasons---Supreme Court declined to interfere with the of High Court as same…

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