Full Judgment Text & Judicial Ruling

2026 C L D 369 [Lahore] Before Raheel Kamran, J LAHORE DEVELOPMENT AUTHORITY through Chief Engineer-I---Petitioner Versus Messrs ZAHIR KHAN AND BROTHERS through Chief Executive Officer and others---Respondents Civil Revision No.48106 of 2025, decided on 30th October, 2025. (a) Arbitration Act (X of 1940)--- ----Ss.11, 28 & 31(3)---Civil Procedure Code (V of 1908), S.115---Agreement for Package-2, Orange line metro train project ---Arbitration clause---Reference to arbitral tribunal---Application for bifurcation/separate adjudication of multiple sub-claims, dismissal of---Interlocutory order of arbitral tribunal---Challenge before the civil court, legality of---Judicial non-interference in ongoing arbitration---Scope---Expiry of initial arbitral period (four months where contract silent)---Effect---Order passed after expiry but before formal enlargement of time---Enlargement of time by court for making award, powers of---Where such enlargement is granted after statutory time-limit---Legality---Retrospective operation of enlargement of time---Scope---Facts: Lahore Development Authority (LDA) and respondent executed a contract for Package-2 of the Orange Line Metro Train Project containing an arbitration clause; upon disputes, arbitration proceedings commenced before an arbitral tribunal where the respondent filed multiple sub-claims, and LDA applied to the tribunal for separation/bifurcation and separate adjudication of each sub-claim; the tribunal dismissed that application, LDA challenged the said order before the civil court, which dismissed the challenge and affirmed the tribunal s decision, leading the LDA to file present civil revision petition before the High Court---Issues:---(i) Whether an interlocutory/procedural order of an arbitral tribunal (refusing bifurcation of sub-claims) was independently amenable to challenge before the civil court? ;(ii) Whether the tribunal s order, made after expiry of the initial arbitral period but before formal enlargement of time by court, was legally sustainable? ; and (iii) Whether petitioner s application for separation and individual adjudication of sub-claims was rightly dismissed? ---Held: As regards issue (i); there was no independent substantive right to challenge each interlocutory or procedural order passed by the arbitral tribunal---The legislature s deliberate omission of such a right in the Act of 1940 underscored the principle that the arbitral tribunal was considered to be the master of its own procedure, particularly where it was composed of technical experts best suited to manage complex factual and procedural issues---Thus, the petitioner s application for separation of sub-claims constituted a challenge to the tribunal s case management discretion, which was not permissible under the Act---As per the principle of judicial non-intervention, arbitration had to proceed without interruption or judicial oversight of interlocutory matters---The application filed by the petitioner before the civil court challenging the arbitral tribunal s order dated was thus not maintainable and was rightly dismissed---Consequently, the present civil revision, being an extension of the same challenge, was also not maintainable---As regards issue (ii); where the extension in time was granted by court after the expiry of the original period but before the making of the award, the order operated retrospectively, thereby validating the proceedings conducted beyond the original time limit---Similarly, where the extension was granted after the making of the award, it encompassed the situation where the award was rendered after the expiry of time and the subsequent enlargement by the Court related back, rendering the award valid as if made within the extended period---In such circumstances, there could be no doubt that the extension of time operated retrospectively---As regards issue (iii); while subscribing to the principle of minimal judicial intervention in arbitral proceedings, High Court observed that the expert arbitral tribunal was the master of its own procedure---In the absence of any allegation of bias, violation of the principles of natural justice, or a demonstrable and grave prejudice that could not otherwise be compensated, a court should be loath to interfere with such procedural determinations---Therefore, on the merits of the application itself, High Court found no compelling reason to substitute its own view for that of the expert arbitrators---Impugned order was passed in accordance with law---Present civil revision petition was dismissed, in circumstances. Messrs National Construction Co. v. WAPDA PLD 1987 SC 461 and Civil Aviation Authority, Karachi v. KIST Consultants (Pvt.) Ltd. Lahore 1998 SCMR 2393 ref. (b) Arbitration Act (X of 1940)--- ----S.11---Arbitral tribunal---Interlocutory / procedural order---Challenge before civil court---Permissibility---Whether an interlocutory order passed by an arbitral tribunal, which does not finally determine the rights of the parties, is amenable to challenge before a civil court---Permitting parties to approach civil courts to challenge every procedural or interlocutory order passed by a arbitral tribunal would defeat the very object of arbitration, opening the floodgates for recalcitrant parties to delay proceedings and transforming the arbitrator into a trial court and the Civil Court into a court of first appeal for every minor procedural decision---The scheme of the Act of 1940 reveals no provision granting a right to challenge interlocutory order---If, however, a party is genuinely aggrieved by an arbitrator s conduct, such as undue delay, partiality or biased procedure, the appropriate remedy lies under S. 11 of the Act of 1940, which empowers the Court to remove an arbitrator or umpire in certain circumstances---Arbitration, as a form of alternative dispute resolution (ADR), provides a speedy, efficient and cost-effective substitute for conventional and often protracted litigation---Particularly in commercial and complex disputes, arbitration is preferred due to its procedural flexibility, technical expertise and finality---Accordingly, if a party alleges misconduct, undue delay or procedural impropriety, it may invoke the provisions of S. 11 ibid for removal of the arbitrator. Injum Aqeel v. Latif Muhammad Chaudhry and others 2023 SCMR 1361 rel. (c) Arbitration Act (X of 1940)--- ----S.28 & First Sched. Para 3---Arbitral tribunal---Power of court to enlarge time for making award---Situation where no time-frame is provided---Scope---In the contract between the parties where the arbitration clause does not specify the time-frame for completion of arbitration proceedings, para 3 of first Schedule of Arbitration Act, 1940 shall come into play which shows that a period of four months is prescribed for making the award, which commences either from the date the arbitrator enters upon the reference or from the date he is called upon to act by notice in writing---The court possesses the discretion to enlarge the time for making an award from time to time. (d) Arbitration Act (X of 1940)--- ----S.28---Arbitral award beyond prescribed time, issuing of---Enlargement of time by court---Where such enlargement is granted after statutory time-limit---Order passed after expiry but before formal enlargement of time---Legality---Retrospective validation---Scope---Where award was given by arbitrator beyond period of limitation either prescribed by Arbitration Act itself or any rules or bye-laws or provided in agreement by which parties were governed, same could be extended by court either before or after giving of award as court had unfettered discretion under S. 28 of the Act to extend period of limitation---Moreover, extension of time granted under S. 28 of the Arbitration Act would operate retrospectively. Province of Sindh and 4 others v. Waseem Construction Co.' 1991 CLC 66 and Messrs Everest Corporation v. Messrs Dacca Mercantile Company, Karachi and 4 others 1993 MLD 1303 ref. (e) Estoppel--- ----Principle---A party cannot approbate and reprobate---A party cannot participate in proceedings or hold its peace while awaiting a potential favourable outcome and then, upon an adverse ruling, opportunistically challenge the very jurisdiction it had tacitly affirmed. WAPDA and another v. Messrs Khanzada Muhammad Abdul Haque Khan Khattak and Company PLD 1990 SC 359 rel. Pakistan Agricultural Storage and Services Corporation v. Messrs Sheikh Muhammad Latif and another 1999 M L D 2773 ref. Sahabzada Muzaffar Ali for Petitioner. Bakhtawar Bilal Soofi for Respondent No.1. M. Waleed Waheed Ch., Registrar of Arbitral Tribunal, in person. Date of hearing: 14th October, 2025. JUDGMENT RAHEEL KAMRAN, J.---By this petition in terms of section 115 of the Code of Civil Procedure, 1908 (C.P.C.), the petitioner has assailed the vires of order dated 31.07.2025 passed by the Civil Judge, Lahore, whereby application moved by petitioner challenging the order dated 17.05.2025 of the Arbitral Tribunal was dismissed. 2. The facts which are essential for the disposal of this petition and are largely undisputed, are that the petitioner and respondent No.1 entered into an agreement on 19.12.2016 for Package-2 of the Orange Line Metro Train Project. The contract contained an arbitration clause for the resolution of any dispute. Upon a dispute arising, the matter was referred to an Arbitral Tribunal (hereinafter 'the Tribunal) and proceedings commenced on 24.12.2024, wherein respondent No.1 filed a claim comprising several sub-claims. During the course of these proceedings, the petitioner moved an application before the Tribunal, praying for the separation and individual adjudication of each sub-claim. This application was dismissed by the Tribunal vide its order dated 17.05.2025. Aggrieved, the petitioner challenged this order before the Civil Judge, who affirmed the Tribunal's decision through the order dated 31.07.2025, which is now impugned before this Court with the following prayer: - "In view of the facts, grounds and circumstances as expounded above, it is most respectfully prayed that that this Honorable Court may: 1) Accept this Civil Revision may kindly be accepted and the Impugned Order dated 31-07-2025, passed by the Learned Civil Judge, may very kindly be set aside; 2) Declare all arbitral proceedings conducted after 24th April 2025, including the tribunal s order dated 17th May 2025, null and void; 3) Quash the oral extension of arbitral timeline to 3rd October 2025; 4) Direct the arbitral tribunal to bifurcate claims in strict compliance with FIDIC Clause 67; 5) Award costs of these proceedings throughout in favour of the Petitioner. 6) The operation of the impugned order, orders dated (sic) and 17-05-2025 as well as the proceedings before the arbitral tribunal, may also be suspended till the final decision of this revision petition. 7) Any other relief(s), deemed fit and appropriate in the peculiar facts and circumstances of the case, may also be granted. 3. Contention of the learned counsel for the petitioner is that prayer of the petitioner for separation of all the claims was justified but the same was wrongly rejected by the Tribunal. Learned counsel for the petitioner explains that the order dated 17.05.2025 by which petitioner s application was dismissed, was passed by the tribunal after 23 days of expiry of its period and admittedly no extension had taken effect at that time, therefore, the order dated 17.05.2025 was not sustainable on this score also. Learned counsel emphasized that although period of the tribunal was extended subsequently, but that was on a date much after 17.05.2025 and it was not extended retrospectively rather the extension was specified to take effect from the date it was given, therefore, no order could have been passed by the Tribunal lawfully before extension of its period. 4. Conversely, learned counsel for the respondent submits that there is no provision in the Arbitration Act, 1940 (hereinafter the Act of 1940) warranting challenge to interlocutory order of a tribunal, as such petitioner is precluded from challenging the interlocutory order dated 17.05.2023. He explains that the Supreme Court of Pakistan has held that if a party is aggrieved by an act of the arbitrator, it may move an application under section 11 of the Arbitration Act seeking removal of the arbitrator but in the instant case petitioner has not moved application under section 11 of the Act. Learned counsel for the respondent emphasized that the petitioner challenged the interlocutory order of the Tribunal by filing an application under sections 14 and 30 of the Act, which are not applicable to the proposition in the case in hand. It is contended that even instant revision is not maintainable as no remedy of revision has been provided in the Act. He adds that whether the claims were to be adjudicated in combine or separately, can be determined by the experts-engineers keeping in view the nature of the claims and the engineers who were arbitrators, proceeded to determine that the prayer for separation of claims was justified. He further adds that petitioner s challenge on the ground of expiry of time is not tenable for the reason that admittedly the petitioner itself during the proceedings before the Tribunal agreed to move an application for extension of time, which fact is even part of the record of the Tribunal, but subsequently instead of filing extension application, petitioner moved application for separation of claims with mala fide. Learned counsel emphasizes that what prejudice is to be caused to the petitioner if claims are resolved conjointly, has not at all been asserted by the petitioner in its application and even before this Court, which fact is sufficient to infer that petitioner's application was not a meaningful action rather based on mala fide particularly when this is seen in the backdrop of the fact that the petitioner has not so far filed reply of respondent's claims before the Tribunal. It is contended by the learned counsel for the respondent that once time of tribunal was extended, although extension was after the date of passing of the order by the Tribunal i.e. 17.05.2025, the time of Tribunal would be deemed to be extended from its first expiry. Learned counsel contends that the application was moved by the petitioner before the Tribunal when the Tribunal was functional and hearing was also in-time, however, only decision was after the expiry date, so, it cannot be counted to be after the expiry. Learned counsel maintains that extension of time of Tribunal is not required to be through a written order, rather the parties may extend time by their conduct, e.g., when parties used to appear before the Tribunal after expiry of its period, it would be presumed that they have extended time impliedly by their conduct. In order to substantiate his arguments, learned counsel for the respondent has placed reliance, inter alia, on the cases of 'WAPDA and another v. Messrs Khanzada Muhammad Abdul Haque Khan Khattak and Company' (PLD 1990 SC 359), 'Civil Aviation Authority, Karachi v. KIST Consultants (Pvt.) Ltd. Lahore' (1998 SCMR 2393), 'Province of Sindh and 4 others v. Waseem Construction Co.' (1991 CLC 66 [Karachi]). Learned counsel for the respondent has also referred a number of juristic works from International jurisdictions on the subject. 5. In rebuttal, learned counsel for the petitioner submits that one of the grounds for setting aside an award as mentioned in section 30 of the Act is that an arbitrator or umpire has misconducted himself or the proceedings. He explains that petitioner's grievance qua taking up five distinct claims by the Tribunal conjointly refers to misconduct of the proceedings, as such the order dated 17.05.2025 squarely falls within the interlocutory orders of the tribunal to be challenged, however, it is settled law that mentioning of wrong sections in an application cannot be considered to be a valid ground for dismissal of such application as it is the pith and substance of the application which is to be considered. Learned counsel for the petitioner adds that section 31(3) of the Act specifically provides for moving of applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings, therefore, petitioner's application before the Civil Court was maintainable. It is contended that where remedy of appeal has not been provided in the Arbitration Act, revision under section 155 of C.P.C. would lie. In order to supplement his contentions, learned counsel for the petitioners has placed reliance on the cases of 'Gerry s International (Pvt.) Ltd. v. Aeroflot Russian International Airlines' (2018 SCMR 662), 'Sardar Muhammad Kamal-ud-Din Khan v. Syed Munir Syed and others' (2022 SCMR 806), 'Messrs Tribal Friends Co. v. Province of Balochistan' (2002 SCMR 1903), 'Muhammad Yousaf Bhindi and others v. Messrs A.G.E. & Sons (Pvt.) Ltd. and others' (PLD 2024 SC 864), 'Injum Aqeel v. Latif Muhammad Chaudhry and others' (2023 SCMR 1361) and 'Sh. Saleem Ali v. Sh. Akhtar Ali and 7 others' (PLD 2004 Lahore 404). 6. Arguments heard and record perused. 7. Before analyzing the merits of the petitioner's application for bifurcation of claims moved before the Tribunal, as well as the legal status of the Tribunal's order dated 17.05.2025, the foremost and the fundamental question before this Court is whether an interlocutory order passed by an Arbitral Tribunal, which does not finally determine the rights of the parties, is amenable to challenge before a Civil Court under the Arbitration Act, 1940. To address this question comprehensively, it is essential to revisit the purpose and object of arbitration. Arbitration, as a form of alternative dispute resolution (ADR), provides a speedy, efficient and cost-effective substitute for conventional and often protracted litigation.1 Particularly in commercial and complex disputes, arbitration is preferred due to its procedural flexibility, technical expertise and finality. The legislative policy underlying the Arbitration is one of minimal judicial intervention. Permitting parties to approach Civil Courts to challenge every procedural or interlocutory order passed by a tribunal would defeat the very object of arbitration, opening the floodgates for recalcitrant parties to delay proceedings and transforming the arbitrator into a trial court and the Civil Court into a court of first appeal for every minor procedural decision. The scheme of the Act of 1940 reveals no provision granting a right to challenge interlocutory orders. If, however, a party is genuinely aggrieved by an arbitrator's conduct, such as undue delay, partiality or biased procedure, the appropriate remedy lies under Section 11 of the Act of 1940, which empowers the Court to remove an arbitrator or umpire in certain circumstances. For reference, the provision reads as follows: 11. Power to Court to remove arbitrators or umpire in certain circumstances. (1) The Court may, on the application of any party to reference, remove an arbitrator or umpire who fails to use all reasonable dispatch in entering on and proceeding with the reference and making an award. (2) The Court may remove an arbitrator or umpire who has misconduct himself or the proceedings. (3) Where an arbitrator or umpire is removed under this section, he shall not be entitled to receive any remuneration in respect of his services. (4) For the purposes of this section the expression 'proceeding with the reference' includes, in a case where reference to the umpire becomes necessary, giving notice of that fact to the parties and to the umpire' Accordingly, if a party alleges misconduct, undue delay or procedural impropriety, it may invoke the provisions of Section 11 ibid for removal of the arbitrator. The petitioner, however, has not availed this statutory remedy. 8. Nevertheless, a distinction must also be drawn with Section 31 of the Act of 1940. This Section reads as under: - "31. Jurisdiction. (1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates. (2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in his Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the court in which the award under the agreement has been, or may be, filed, and by no other Court. (3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where award has been, or may be, filed, and to no other Court'. (Emphasis supplied by this Court). Plain reading of above, it is clear that language of subsection (3) is forum-defining, not right-conferring. It designates the exclusive forum for all applications regarding the conduct of arbitration proceedings, thereby preventing forum shopping and jurisdictional multiplicity. However, it does not create an independent substantive right to challenge each interlocutory or procedural order passed by the tribunal. The legislature's deliberate omission of such a right in the Act of 1940 underscores the principle that the Arbitral Tribunal is considered to be the master of its own procedure, particularly where it is composed of technical experts best suited to manage complex factual and procedural issues. Thus, the petitioner's application for separation of sub-claims constitutes a challenge to the Tribunal's case management discretion, which is not permissible under the Act. Here reference may be made to authoritative commentary in Russell on Arbitration (23rd Edition, p. 271), which distinguishes between awards and procedural orders or directions, emphasizing that the latter are not subject to judicial review: (b) There is no statutory definition of an award in English arbitration law despite the important consequences which flow from an award being made. In principle an award is a final determination of a particular issue or claim in the arbitration. It may be contrasted with orders and directions which address the procedural mechanisms to be adopted in the reference. Such procedural orders and directions are not necessarily final in that the tribunal may choose to vary or rescind them altogether. Thus, questions concerning the jurisdiction of the tribunal or the choice of the applicable substantive law are suitable for determination by the issue of an award. Questions concerning the timetable for the reference or the extent of disclosure of documents are procedural in nature and are determined by the issue of an order or direction and not by an award. The distinction is important because an award can be the subject of a challenge or an appeal to the court, whereas an order or direction in itself cannot be so challenged. (Emphasis supplied by this Court). Further, at page 375, the same treatise notes the historical reluctance of English courts to interfere in arbitral proceedings, observing: "Even before the Arbitration Act, 1996, the English court had already expressed a reluctance to interfere in the conduct of arbitration proceedings, which they accepted should be left as far as possible to the arbitral tribunal. The court had no general supervisory power over the conduct of arbitrations beyond those powers conferred by the Arbitration Acts then in force. Thus, the tribunal s decisions during the course of a reference were not reviewable by the court, unless the tribunal exceeded its jurisdiction or it could be shown that what the tribunal was doing or had done was something manifestly contrary to natural justice.' Similarly, in International Commercial Arbitration (2nd Ed. 2014), by Gary B. Born, the principle of judicial non-interference is described as a fundamental aspect of international arbitration law, essential to preserve the autonomy and efficiency of arbitral proceedings. Relevant extract is as under: - 'In addition to addressing the content of the procedures that are used in international arbitrations, and the subject of waiver, leading international arbitration conventions, arbitration legislation and institutional rules all adopt a basic principle of judicial non-interference in the ongoing conduct of the arbitral proceedings. This principle is fundamentally important to the efficacy of the international arbitral process, ensuring that an arbitration can proceed, pursuant to the agreement of the parties or under the direction of the tribunal, without the delays, second-guessing and other problems associated with interlocutory judicial review of procedural decisions." The same exposition also noted: - "National courts in common law jurisdictions have repeatedly and (almost) uniformly rejected requests for judicial…

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