Appellate Division Cases
Bangladesh Water Development Board WAPDA Building, Motijheel, Dhaka…………………………Appellant
M/s Zakir Construction & Co………………………………. Respondent
Latifur Rahman, C.J
Mahmudul Amin Choudhury C .J
Mainur Reza Chowdhury . J
JUDGEMENT DATE : 27th November, 2000
Section 34 of the Code of Civil Procedure. Section 29 of the Arbitration Act.
That in the absence of any specific reference to an Arbitrator on a question as to what interest is to be paid subsequent to the passing of the decree the Arbitrator does not possess any authority to award interest as his jurisdiction is limited by terms of his reference ………………(11)
Bangladesh Agricultural Development vs Kibria and Associates Ltd. 46 DLR (AD) 97.
Civil Appeal Nos. 43 of 2000 (From the Judgment and order dated 31.5.1999 passed by the High Court Division in first Appeal No. 30 of 1999).
Abdul Wadud Bhuiyan, Senior Advocate instructed by Sharifuddin chaklader, Advocateon-Record……………….. For appellant
Khandker Mahbubuddin Ahmed, Senior Advocate (Ozair Farooq, Senior Advocate with him) instructed by Md. Nowab AH, Advocateon-Record……………….. For Respondent
1. Mahmudul Amin Choudhury, J : This appeal by leave is against judgment and decree dated 31.5.1999 passed by a Division Bench of the High Court Division in First Appeal No. 30 of 1999 upholding the judgment and decree passed by the learned Subordinate Judge, 4t n Court, Dhaka in Title Suit No. 122 of 1998 making the award dated 3.11.1994 of the Arbitrator Md. Moksudur Rahman in Arbitration Miscellaneous Case No. 79 of 1994 a Rule of the Court.
2. The short fact leading to this appeal is that the appellant invited tender for construction
of an embankment at 13.65 Kilo Meter in order to save the greater Dhaka City from flood. The respondent submitted a tender for construction of 5 sluice gate at a cost of Tk. 2,25,00,000/which amount was subsequently raised to TK. 3,52,00,000/- The petitioner accepted the tender of the appellant and issued work order for the construction of only one sluice gate at a cost of TK. 1,75,00,000/- Besides this respondent had to execute certain non-schedule work and they on completion of the work submitted final bill
for an amount of TK. 14.90.06.646.80 paisa which the appellant refused to accept. This
amount excludes the running bills and the final bill amount was for Tk. 11.45,77,176.60 paisa which gave rise to a dispute between the parties. As a result the matter was referred to sole Arbitrator Mr. Justice Moksumul Hakim for arbitration as per terms of the contract. Justice Hakim proceeded with the arbitration for some time but then he declined to continue and accordingly Mr. Md. Moksudur Rahman was appointed an Arbitrator in his place who then on completion of the arbitration fixed total dues of the respondent at Tk. 10,37,45,666.13 paisa including the running bills received by the respondent amounting to Tk. 3,55,05,450/-. Mr. Moksudur Rahman gave award for a sum of Tk. 8,87,12,280.95 paisa inclusive of an amount of interest of Tk. 2,04.72,064.82 Paisa
at the rate of 15% in favour of respondent Mr. Rahman ordered that interest be payable on the awarded sum till realization. This award was signed on 3 November, 1994 and was filed before the learned Subordinate Judge on 141″ November, 1994. Before the learned
Subordinate Judge a prayer was made on behalf of the respondent for making the award a rule of the Court. The present appellant on the other hand challenged the validity of the award under section 33 of the Arbitration Act on various grounds . The learned Subordinate Judge did not accept the objection of the present appellant but accepted the award and made it a rule of the Court and accordingly the suit was decreed and the award was made a part thereof.
3. The present appellant being aggrieved by the judgment and decree passed in Title Suit
No. 122 of 1998 by the learned Subordinate Judge, 4 m Court, Dhaka preferred First Appeal No. 30 of 1999 before the High Court Division and a Division Bench of that Division by impugned judgment dismissed the appeal upholding the judgment and decree passed by the learned Subordinate Judge.
4. Leave was granted by this Division to consider the following :” the learned Counsel for the petitioner contends that the learned Arbitrator having conducted the arbitration
proceeding only for three months had no lawful authority to award the interest on the unpaid amount of Tk. 6,82,40,216,. 13 Paisa for a period of 2 years. He contends further
that he had also no jurisdiction to allow the interest beyond the date of the award in view of section 29 of the Arbitration Act. The High Court Division, he contends has therefore
fallen into an error of law by holding that the interests awarded by the learned arbitrator beyond the period of three months of the arbitration proceeding and also the date of award were without jurisdiction.
5.The learned Counsel for the petitioner next contends that the High Court Division has failed to notice that the learned Arbitrator did not afford adequate opportunity to the petitioner to present its case and that he rather conducted the proceedings in unusual haste
here by mis conducting himself in the proceedings.
6. The learned Counsel further submits that the High Court Division was wrong in upholding the award in question on account of the claims under (i) Part-A (Tendered Items)(ii) Part-B (non-tendered but scheduled items), (iii) Part-C (non tendered and nonscheduled items (iv) compensation for loss and business and good will and (v)
mobilization and demobilization in as much as the respondent had agreed to
the departmental rate vide supplementary tender in respect of claim under Part a (tendered items) and Part B (nontendered but scheduled items) and the award was therefore beyond the terms of the contract and not sustainable in law.”
7. Admittedly on 7.2.1989 the present appellant invited tender for the project of
embankment of greater Dhaka City which was a flood control embankment project and there respondent submitted tender on 16.2.1989 for 13.65 Kilo Meter with 8 vent R. C. C pipe sluice gates Tk. 2,25,00,000/- was fixed at the out set which was subsequently raised to Tk .3,52,00,000/-. It is also an admitted fact that on 18.3.1989 work order was issued and agreement was entered into on 27.3.1989 and actually work commenced on 24.3.1989. It is the case of the plaintiff respondent that the present appellant failed to give necessary construction materials, construction plan and design for starting construction work and they delayed to supply the same by 45 days. It is also an admitted fact that during continuance of the construction the plaintiff was asked to undertake some non scheduled construction for reasons beyond the control of the plaintiff and the plaintiff has
to complete this non-scheduled construction on being threatened by the appellant which work was not mentioned in the contract and the respondent had to undertake construction in greater interest of the country and some time under compulsion and threat by the present appellant. These schedule and non schedule works given to the respondent has not been disputed by the present appellant. But when final bill was submitted by the respondent the same was refused by the appellant leading to the arbitration proceeding.
8. Mr. Abdul Wadud Bhuiyan, learned Counsel appearing on behalf of the appellant
contends that the learned Arbitrator having conducted the arbitration proceeding only for 3 months had no lawful authority to award the interest on the unpaid amount of Tk.
6.82,40,216.13 for a period of 2 years and he had no jurisdiction to allow the interest beyond the date of the award in view of section 29 of the Arbitration Act.
9. It is well settled that an award may be set aside on any one or more of the grounds mentioned in section 30 of the Arbitration Act and here in the present case the learned Advocate for the appellant contends that the award ought to have been set aside as the arbitrator has miscomducted himself in giving award. He contends that the misconduct of the Arbitrator would be evident from the fact that in this huge arbitration proceeding the Arbitrator in a hurry completed the arbitration just within three months from the initiation of the proceeding and the High Court Division failed to notice that no adequate opportunity was afforded to the appellant to present their case as the arbitrator conducted the proceeding in an unusual haste thereby miscomducted himself in the proceeding.
Though Mr. Abdul Wadud Bhuiyan submitted that the arbitrator misconduct himself
when he completed the proceeding in an unusual haste, he failed to point out anything to
show that without affording any opportunity to the appellant the proceeding was concluded. From the record it appears that previously Mr. justice Moksumul Hakim was appointed arbitrator before whom the materials were placed by both he parties and when he declined to continue with the proceeding Mr. Md. Moksudur Rahman was appointed and before whom also records were placed and the evidence led and he managed to complete the proceeding with in three months. There is absolutely no material to show that the appellant raised objection before the Arbitrator on the ground that he is not giving any opportunity to the appellant to present their case rather they participated on all the dates of the proceeding without any objection. In such circumstances it is now too late to say that opportunity was not given to the appellants for placing their case before the arbitrator. They also tool no step to change the arbitrator on this ground. Furthermore law has not provided anything in support of Mr. Bhuiyan that the arbitrator can not conclude the arbitration proceeding with in such a time. It appears from the award that the arbitrator accepted the evidence of both sides and disposed of the proceeding very elaborately item wise. So this submission that the award was given with in three months cannot by itself be a ground to held that the arbitrator has miscomducted himself in the proceeding. This point was raised before the High Court Division which correctly disposed of the same against the appellant.
10. As regards award of interest it is submitted by Mr. Bhuiyan that in view of the provision of section 29 of the Arbitration Act awarding of interest by the arbitrator beyond the date of the award and for a period of two years of the unpaid amount of Tk.
6,82,40,216.13 Paisa is illegal. “V 11. It is submitted that section 29 of the Arbitration Act provided that where and in so far as an award is for payment of money the court may in the decree order interest from the date of the decree at such rate as the court deem
reasonable to be paid on the. principal sum as adjudged by the award and confirmed by the decree. He submits that in the absence of any specific reference to an Arbitrator on a question as to what interest is to be paid subsequent to the passing of the decree the Arbitrator does not possess any authority to award interest as his jurisdiction is limited by terms of his reference.
12. Mr. Bhuiyan submits that in the present case the Arbitrator acted beyond his jurisdiction as law has not entrusted him with any power to award interest till realization. This question was raised before the trial Court and after a thrad bare discussion the court decided that the plaintiff is entitled to an interest till realization of the decreed amount and this opinion of the Arbitrator was accepted by the trial court on thorough consideration of” the materials on record. The High Court Division observed that
as this award of interest has been accepted by the trial court irregularity if any that may be done by the Arbitrator had been regularized. The High Court Division found that the award of interest after acceptance of the same by the trial court can not be constructed as arbitrary exercise of power by the Arbitrator. This point has been well settled by this division in the case of Bangladesh Agricultural Development Corporation (BADC) represented by the Secretary Vs.Kibria and Associates Ltd. reported in 46 DLR (AD) 97 where it has been held that an Arbitrator may allow pendent lite interest on the analogy of the Courts power to grant interest if the dispute were agitated before the Court. It has been held that the Arbitrator may allow interest pendent lite for a period beyond
four months if the prolongation is caused by the circumstances beyond his control and to avoid any controversy, the period for pendent late interest will start from the date on which the arbitrator enters upon the arbitration proceeding addend on the day the award is made. It has also been held that the interest for the future that is from the date of the award till realization of money, though section 29 of the Arbitration Act did not give the arbitrator this power, he may allow the interest on his award till realization on the same analogy to court’s power which will be in accordance with justice and fairness. It has also been observed that section 34 of the Code of Civil Procedure does not in terms apply to an arbitration proceeding as the arbitrator is not a civil court but it is undeniable
that the arbitrator though not a civil court, but sits as an alternative forum for resolution of the dispute brought by the parties before him and the arbitrator impliedly possesses the power of section 34. The principle of section 34 of the Code of Civil Procedure applies by way of analogy to an arbitrator who decided a matter in dispute completely and fairly between the parties. This is latest decision of this Division of the Supreme Court of Bangladesh on the Paints raised by Mr. Bhuiyan and we find nothing in the present case to defer with the opinion of this Division or to change our view on the awarding
of interest. In view of this decision of this Division on the point at issue of awarding interest we find no force in the argument advanced by Mr. Bhuiyan . The Arbitrator awarded the interest which was up held by the trial court and the High Court Division also considered this point and we find no illegality in awarding of interest by the Arbitrator which may call for our interference. The points raised by Mr. Bhuiyan is therefore answered against him.
13. Leave was granted on the submission that the High Court Division has failed to notice
that the learned Arbitrator did not afford adequate opportunity to the appellant to present
their case and that he rather conducted the proceedings in unusual haste thereby misconducted himself in the proceeding. We have already found that initially Mr. Justice Moksumul Hakim was appointed as Arbitrator who almost completed the proceeding but then he declined to continue and in his place Mr. Moksudur Rahman was appointed by the court and it appears that he took up the arbitration proceeding from where it was left by Justice Hakim. Before Justice Moksumul Hakim parties led both oral and ocumentary evidence. There is absolutely nothing before us to hold that the appellants were gauged by the arbitrator at any stage in producing their evidence both oral and documentary. No objection was raised either against the first Arbitrator or against the second Arbitrator before them or in the Court. The appellants produced all their documents before the Arbitrator and also led oral evidence from which it cannot be found that Mr. Moksudur
Rahman concluded the arbitration in an unusual haste. Mere conclusion of the arbitration proceeding within three months by Mr. Moksudur Rahman can not by itsef be a ground to hold that he has misconducted himself. There was no prayer from the side of the appellant before Mr. Moksuder Rahman for adducing further evidence in addition to what has been already recorded while Mr. justice Hakim was holding the arbitration. The High Court Division considered this objection and rightly held that the Arbitrator has not misconducted himself in the proceeding in completing the arbitration within three months. We therefore find no force in the argument advanced by Mr. Bhuiyan in this
14. The learned Advocate appearing on behalf of the appellant submits that the High
Court Division committed illegality and wrong in accepting the judgment of the trial court which in turn up held the award on mobilization and demobilization. It is submitted that in the contract there was no clause as to payment on mobilization and demobilization and in such a situation the arbitrator was not empowered to give any relief to the plaintiff respondent on the ground of mobilization and demobilization.
15. Mr. Ozair Farooq, learned Advocate on the other hand has drawn our attention to Pages 30 and 225 of the Second Part of the paper book and submits that in the contract itself there is a clause of mobilization and demobilization. From the evidence on record it appears that at the instance of the appellant the work site was changed but before hand initial work was undertaken by the respondent and with the change of site there was mobilization and demobilization by the respondent. This aspect of the matter was thoroughly considered by the Arbitrator as well as by the trial court and by the High Court Division and considering the terms and conditions of the contract as well as change of site after the starting of the implementation of the contract, the arbitrator awarded a sum of TK. 1,00,000/- as mobilization and demobilization which was accepted by the trial court and also by the High Court Division. When that is the position we find no force in the argument advanced by the learned advocate for the appellant. As to the question on account of claim under Part-A(tendered Item) Part-B (non tender but scheduled items) Part-c (non-tender and non-schedule) and compensation for loss of business and goodwill it appears the arbitrator has given his award which was accepted by the trial court but the same was not agitated before the High Court Division and so is the case with non-tender and non-schedule items and nontender non-scheduled items though leave was obtained on these but those grounds were not taken or agitated before the High Court Division . Even then we have gone through the award as well as the judgment of the trial court.
It appears that tender and scheduled items and non-tender and scheduled items and non-tender and non-scheduled items were thoroughly considered by the Arbitrator where both sides adduced evidence and the same was also considered elaborately by the trial court. Though these matters were not pressed before the High Court Division but we have considered the judgment of the trial court as well as the award but we find no illegality in the same for our interference. It is submitted that the award was beyond the terms of the contract and as such not sustainable in law. But from the perusal of the deed of contract and the award and the judgment of the trial court it appears to us that nothing has been awarded by the arbitrator which is beyond the scope of contract and the trial court
also considered this aspect of the matter and found that the arbitrator has not isconducted
himself in giving the award. The High Court Division also it appears considered the points raised therein and gave detailed judgment over the points raised. The High Court Division has not committed any wrong and illegality which may call for our interference.
16. We have heard at length the learned Advocate of both the sides and perused the
award, judgment of the trial court as well as of the High Court Division and also other materials and we hold that no illegality and wrong has been committed by the High Court Division in affirming the judgment and decree passed by the trial court. The learned Advocate appearing for the appellant failed to point out anything from which it can be found that the Arbitrator has misconducted himself. There is therefore no merit in this appeal and the same is liable to be dismissed. The appeal is accordingly dismissed
Source: I ADC (2004), 160