Arbitration Act, 1940 | Pakistan Kanoon

ARBITRATION ACT (X OF 1940)

16. Power to remit award.__(1) The Court may from time to time remit the award or any matter referred to arbitration to the arbitrators or umpire for reconsideration upon such terms as it thinks fit__

(a) where the award has left undetermined any of the matters referred to arbitration, or where it determines any matter not referred to arbitration and such matter cannot be separated without affecting the determination of the matters referred; or

(b) where the award is so indefinite as to be incapable of execution ; or

(2) Where an award is remitted under sub‑section (1) the Court shall fix the time within which the arbitrator or umpire shall submit his decision to the Court:

Provided that any time so fixed may be extended by subsequent order of the Court.

(3) An award remitted under sub‑section (1) shall become void on the failure of the arbitrator or umpire to reconsider it and submit his decision within the time fixed.

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— Power to remit award — Power to supersede arbitration where award becomes void or is set aside — Grounds for setting aside award — Scope — Section 16 provides that the Court may from time to time remit the award or any matter referred to arbitration to the arbitrators or umpire for re-consideration upon such terms as it thinks fit (a) where the award has left un-determined any of the matters referred to arbitration, or where it determines any matter not referred to arbitration, and such matters cannot be separated without affecting the determination of the matters referred; or (b) where the award is so indefinite as to be incapable of execution; or (c) where an objection to the legality of the award is apparent upon the face of it. In the same parlance, sub-section (2) provides that where an award is remitted under sub-section (1) the Court shall fix the time within which the arbitrator or umpire shall submit his decision to the Court; provided that any time so fixed may be extended by subsequent order of the Court; and according to sub-section (3) an award remitted under sub-section (1) shall become void on the failure of the arbitrator or umpire to re-consider it and submit his decision within the time fixed. Whereas under Section 19, where an award has become void under sub-section (3) of section 16 or has been set aside, the Court may by order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred. The niceties of Section 30 of the Arbitration Act explicate that an award shall not be set aside except on the ground(s) (a) that an arbitrator or umpire has misconducted himself or the proceedings; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under Section 35; or (c) that an award has been improperly procured or is otherwise invalid. [2023 SCLR 61 = 2023 SCMR 2075 = 2023 SCP 277]

Section 19: Power to supersede arbitration where award becomes void or is set aside

19. Power to supersede arbitration where award becomes void or is set aside. Where an award has become void under sub‑section (3) of section 16 or has been set aside, the Court may by order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred.

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Section 20: Application to file in Court arbitration agreement

20. Application to file in Court arbitration agreement.—

(1) Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subjectmatter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in the Court.

(2) The application shall be in writing and shall be numbered and registered as a suit between one or more of the parties interested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants, if the application has been presented by all the parties, or, if otherwise, between the applicant as plaintiff and the other parties as defendants.

(3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement other than the applicants, requiring them to show cause within the time specified in the notice why the agreement should not be filed.

(4) Where no sufficient cause is shown, the Court shall order the agreement to be filed, and shall make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or, where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court.

(5) Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act so far as they can be made applicable.

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— Application to file in Court arbitration agreement — Scope — Section 20 of the Arbitration Act, 1940 empowers the court to send the matter to arbitrators on fulfillment of the conditions laid down in the said provision — The courts in such a case exercise limited jurisdiction and are not concerned with the merits of the case except for ascertaining the existence of an arbitration agreement between the parties and a dispute having arisen thereunder. [PLR 2024 Lahore 1 = PLD 2024 Lahore 1 = 2023 LHC 4474]

— Application to file in Court arbitration agreement — Scope — Where the legal right claimed is not sufficiently clear to enable the Court to form an opinion thereon, the relevant convenience or inconvenience in granting injunction (or refusal thereof) to the parties should be considered — The Court, while exercising jurisdiction under section 20 of the Arbitration Act, 1940 can only go so far in determination of the so-called prima facie case test as the decision on the dispute falls within the jurisdiction of the arbitrators — It is thus imperative that the Courts must not make findings of fact or construe the provisions of contract between the parties particularly when they have expressly agreed to refer such dispute to arbitration. [PLR 2024 Lahore 1 = PLD 2024 Lahore 1 = 2023 LHC 4474]

Section 30: Grounds for setting aside award

30. Grounds for setting aside award. An award shall not be set aside except on one or more of the following grounds, namely:__

(a) that an arbitrator or umpire has mis-conducted himself or the proceedings;

(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35;

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— Power to remit award — Power to supersede arbitration where award becomes void or is set aside — Grounds for setting aside award — Scope — Section 16 provides that the Court may from time to time remit the award or any matter referred to arbitration to the arbitrators or umpire for re-consideration upon such terms as it thinks fit (a) where the award has left un-determined any of the matters referred to arbitration, or where it determines any matter not referred to arbitration, and such matters cannot be separated without affecting the determination of the matters referred; or (b) where the award is so indefinite as to be incapable of execution; or (c) where an objection to the legality of the award is apparent upon the face of it. In the same parlance, sub-section (2) provides that where an award is remitted under sub-section (1) the Court shall fix the time within which the arbitrator or umpire shall submit his decision to the Court; provided that any time so fixed may be extended by subsequent order of the Court; and according to sub-section (3) an award remitted under sub-section (1) shall become void on the failure of the arbitrator or umpire to re-consider it and submit his decision within the time fixed. Whereas under Section 19, where an award has become void under sub-section (3) of section 16 or has been set aside, the Court may by order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred. The niceties of Section 30 of the Arbitration Act explicate that an award shall not be set aside except on the ground(s) (a) that an arbitrator or umpire has mis-conducted himself or the proceedings; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under Section 35; or (c) that an award has been improperly procured or is otherwise invalid. [2023 SCLR 61 = 2023 SCMR 2075 = 2023 SCP 277]

Section 32: Bar to suit contesting arbitration agreement or award

32. Bar to suit contesting arbitration agreement or award. Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act.

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— Bar to suit contesting arbitration agreement or award — Arbitration agreement or award to be contested by application — Scope — No suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in the Arbitration Act — Under the exactitudes of S. 33, any party to an arbitration agreement, or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined, may apply to the Court for decision. [2023 SCLR 61 = 2023 SCMR 2075 = 2023 SCP 277]

Section 33: Arbitration agreement or award to be contested by application

33. Arbitration agreement or award to be contested by application. Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits:

Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for the discovery and particulars as it may do in a suit.

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