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Definitions “Hadd" mean punishment ordained by the Holy Quran or Sunnah. "Tazir" means any punishment other than "hadd", and all other terms and expressions not defined in this Ordinance shall have the same meaning as the Pakistan Penal Code, or the Code of Criminal Procedure, 1898. “Ikrah” means putting any person in fear of injury to the person, property or honour of that or any person. "Iztirar" means a situation in which a person is in apprehension of death due to extreme hunger or thirst or serious illness. “Adult" means a person who has attained the age of eighteen years of puberty "Adult" means a person who has attained, being a male, the age of eighteen years or, being a female, the age of sixteen years, or has attained puberty. “Authorized medical officer" means a medical officer, however designated, authorized by the Provincial Government. “Public place" means a street, road, thoroughfare, park, garden or other place to which the public have free access and includes a hotel, restaurant, motel, mess and club, but does not include the residential room of a hotel in the occupation of some person. "Muhsan" means: A Muslim adult man who is not insane and has had sexual intercourse with a Muslim adult woman who, at the time he had sexual intercourse with her, was married to him and was not insane; or A Muslim adult woman who is not insane and has had sexual intercourse with a Muslim adult man who, at the time she had sexual intercourse with him, was married to her and was not insane. "Hirz" means an arrangement made for the custody of property. "Imprisonment for life" means imprisonment till death. “Arbitration Council” means a body consisting of the Chairman and representative of each of the parties to a matter deal with in this ordi

Hudood Laws
Hudood is plural of a singular word called as hadd. There was four laws introduced in 1979 during the process of Islamization called as hudood laws.

Four • • • •

kinds of Hudood Laws:
The The The The offence offence offence offence

against property (enforcement of Hudood ordinance, 1979). of Zina (enforcement of Hudood ordinance, 1979). of Qazf (enforcement of Hudood ordinance, 1979). of Drinking (enforcement of Hudood ordinance, 1979).

The Offence of Drinking (Enforcement of Hudood) Ordinance, 1979.

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Drinking U/SEC 6: Whoever intentionally and without ikrah or iztirar takes an intoxicant by any means, shall be guilty of drinking. Explanation. - In this Article, (a)"Ikrah" means putting any person in fear of injury to the person, property or honour of that or any person ;and (b)"Iztirar" means a situation in which a person is in apprehension of death due to extreme hunger or thirst or serious illness. Kinds of drinking U/SEC 7: There are two kinds of drinking: (1) Drinking liable to hadd (2) Drinking liable to tazir Drinking liable to hadd U/SEC8: If an adult muslim takes an intoxicating liquor by mouth, he shall be guilty of drinking liable to hadd. (1) Explanation: (1) Adult u/sec 2 (a): Adult means a person who has attained the age of eighteen years of puberty. (2) Intoxicating Liquor U/sec2 (g): Intoxicating Liquor includes toddy spirits of wine, beer and all liquids consisting of or containing alcohol normally used for purposes of intoxication but does not include a solid intoxicant even if liquefied. (2) Punishment: Whoever guilty of drinking liable to hadd shall be punished with whipping numbering eighty stripes. Proof of drinking liable to hadd U/SEC 9: Drinking liable hadd shall be proved in any one of the following forms. (1)Confession: The accused makes before a court of competent jurisdiction a confession of commission of the offence. (2) By Evidence of Witnesses: At least two Muslim adult male witnesses, about whom the court is satisfied, have regard to the requirement of tazkiyah al-shuhood, that they are truthful persons and abstain from major sins (kabair), give evidence of the accused having committed the offence of drinking liable to hadd. Explanation. - In this Article, tazkiyah al-shuhood means the mode of inquiry adopted by a court to satisfy itself as to the credibility of a witness. Cases in which hadd shall not be enforced: Hadd shall not be enforced in the following cases, namely:(1) When drinking is proved only by the confession of the convict but he retracts his confession before the execution of hadd; and (2) When drinking is proved by testimony, but before the execution of hadd, any witness resiles from his testimony so as to reduce the number of witness to less than two. Drinking liable to tazir: Whoever(1) being a Muslim, is guilty of drinking, which is not liable to hadd under Article 8 or which proof in either of the forms mentioned in Article 9 is not available and the court is that the offence stands proved by the evidence on the record. (2) Being a non-Muslim citizen of Pakistan, is guilty of drinking, expect as a part of a ceremony prescribed by his religion; or (3) Being a non-Muslim, who is not a citizen of Pakistan, is guilty of drinking at a public place; Punishment: Drinking liable to tazir is punishable with imprisonment of either description for a term which

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may extend to three years or with whipping not exceeding thirty stripes or with both.

The Offence of Zina (Enforcement of Hudood) Ordinance, 1979.
Zina A man and a woman are said to commit 'Zina' if they willfully have sexual intercourse without being married to each other. Explanation: Penetration is sufficient to constitute the sexual intercourse necessary to the offence of Zina. 5. Zina liable to hadd. Zina is zina liable to hadd if (a) It is committed by a man who is an adult and is not insane with a woman to whom he is not, and does not suspect himself to be married; or (b) It is committed by a woman who is an adult and is not insane with a man to whom she is not, and does not suspect herself to be, married. Ingredients of Zina liable to hadd: • Penetration • Adult • Muslim • Should belong to opposite sex Punishment: Whoever is guilty of Zina liable to hadd shall, subject to the provisions of this Ordinance (a) If he or she is a muhsan, be stoned to death at a public place; or (b) If he or she is not muhsan, be punished, at a public place; with whipping numbering one hundred stripes. Proof of zina liable to hadd: Proof of zina liable to hadd shall be in one of the following forms, namely: (a) The accused makes before a Court of competent jurisdiction a confession of the commission of the offence; or (b) At least four Muslim adult male witnesses, about whom the Court is satisfied, having regard to the requirements of tazkiyah al-shuhood, that they are truthful persons and abstain from major sins (kabair), give evidence as eye-witnesses of the act of penetration necessary to the offence: Provided that, if the accused is a non-Muslim, the eye-witnesses may be non-Muslims. 9. Case in which hadd shall not be enforced: (a)In a case in which the offence of zina is proved only by the confession of the convict, hadd, or such part of it as is yet to be enforced, shall not be enforced if the convict retracts his confession before the hadd or such part is enforced. (b)In a case in which the offence of zina is proved only by testimony, hadd or such part of it as is yet to be enforced, shall not be enforced if any witness resiles from his testimony before hadd or such part is enforced, so as to reduce the number of eye-witnesses to less than four. Zina bil Jabr: A person is said to commit zina-bil-jabrif he or she has sexual inter-course with a woman or man, as the case may be, to whom he or she is not validly married, in any of the following circumstances, namely: • against the will of the victim • without the consent of the victim • with the consent of the victim, when the consent has been obtained by putting the victim in fear of death or of hurt; or • with the consent of the victim , when the offender knows that the offender is not validly married to the victim and that the consent is given because the victim

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believes that the offender is another person to who the victim is or believes herself or himself to be validly married. Explanation: Penetration is sufficient to constitute the sexual inter-course necessary to the offence of zina-bil-jabr. Zina-bil-jabr is zina-bil-jabr liable to hadd if it is committed in the committed in the circumstances specified in sub-section (1) of section 5. Punishment: Whoever is guilty of zina-bil-jabr liable to hadd shall subject to the provisions of this Ordinance, if he or she is a muhsan, be stoned to death at a public place; or if he or she is not muhsan, be punished with whipping numbering one hundred stripes, at a public place, and with such other punishment, including the sentence of death, as the Court may deem fit having regard to the circumstances of the case. No punishment under sub-section (3) shall be executed until it has been confirmed by the Court to whom an appeal from the order of conviction lies; and if the punishment be of whipping until it is confirmed and executed, the convict shall be dealt with in the same manner as if sentenced to simple imprisonment. Punishment for Zina or zina-bil-jabr where convict is not an adult A person guilty of zina or zina-bil-jabr shall, if he is not an adult, be punished with imprisonment of either description for a term which may extend to five years, or with fine, or with both, and may also be awarded the punishment of whipping not exceeding thirty stripes: Provided that, in the case of zina-bil-jabr, if the offender is not under the age of fifteen years, the punishment of whipping shall be awarded with or without any other punishment. Zina or zina-bil-jabr liable to tazir: Subject to the provisions of section 7, whoever commits zina or zina-bil-jabr which is not liable to hadd, or for which proof in either of the forms mentioned in section 8 is not available and the punishment of qazf liable to hadd has not been awarded to the complainant, or for which hadd may not be enforced under this Ordinance, shall be liable to tazir. Whoever commits zina liable to tazir shall be punished with rigorous imprisonment for a term which may extend to ten years and with whipping numbering thirty stripes, and shall also be liable to fine. Whoever commits zina-bil-jabr liable to tazir shall be punished with imprisonment for a term which shall not be less than four years nor more than twenty-five years and shall also be awarded the punishment of whipping numbering thirty stripes. When zina-bil-jabr liable to tazir is committed by two or more persons in furtherance of common intention of all each of such persons shall be punished with death.

The Offence of Qazf (Enforcement Of Hadd) Ordinance, 1979.
Whoever by words either spoken or intended to be read, or by signs or by visible representations, makes or publishers an imputation of zina concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm the reputation, or hurt the feelings, of such person, is said except in the cases hereinafter excepted, to commit qazf. Qazf liable to hadd: Whoever, being an adult, intentionally and without ambiguity commits qazf of zina liable to hadd against a particular person who is a muhsan and capable of performing sexual intercourse is, subject to the provisions of this Ordinance, said to commit qazf liable to hadd. Explanation 1:- In this section, "muhsan" means a sane and adult Muslim who either has had no sexual intercourse or has had such intercourse with his or her lawfully wedded spouse.

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Explanation 2:- If a person makes in respect of another person the imputation that such other person is an illegitimate child, or refuses to recognize such person to be a legitimate child, he shall be deemed to have committed qazf liable to hadd in respect of the mother of that person. Proof of qazf liable to hadd: Proof of qazf liable to hadd shall be in one of the following forms namely: • The accused makes before a Court of competent jurisdiction a confession of the commission of the offence; • The accused commits qazf in the presence of the Court; and • At least two Muslim adult male witnesses, other than the victim of the qazf, about whom the Court is satisfied, having regard to the requirements of tazkiyah al-shuhood that they are truthful persons and abstain from major sins (Kabair), give direct evidence of the commission of qazf: Provided that, if the accused in a non-Muslim, the witnesses may be non-Muslims Provided further that the statement of the complainant or the person authorized by him shall be recorded before the statements of the witnesses are recorded. Punishment of qazf liable to hadd: (a) Whoever commits qazf liable to hadd shall be punished with whipping numbering eighty stripes. (b) After a person has been convicted of the offence of qazf liable to hadd, his evidence shall not be admissible in any Court of law. Who can file a complaint? No proceedings under this Ordinance shall be initiated except on a or a complaint lodged in a Court by the following, namely: (a) If the person in respect of whom the qazf has been committed be alive, that person, or any person authorized by him; or (b) If the person in respect of whom the qazf has been committed be dead, any of the ascendants or descendants of that person. Cases in which hadd shall not be imposed or enforced: (1) Hadd shall not be imposed for qazf in any of the following cases, namely • When a person has committed qazf against any of his descendants • When the person in respect of whom qazf has been committed and who is a complainant has died during the pendency of the proceedings; and • When the imputation has been proved to be true. (2) In a case which, before the execution of hadd, the complainant withdraws his allegation of qazf, or states that the accused had made a false confession or that any of the witnesses had deposed falsely, hadd shall not be enforced. Lian: (1) When a husband accuses before a Court his wife who is muhsan within the meaning of section 5, of zina and the wife does not accept the accusation as true, the following procedure of lian shall apply, namely:(a) the husband shall say upon oath before the Court: "I swear by Allah the Almighty and say I am surely truthful in my accusation of zina against my wife (name of wife)" and, after he has said so four times, he shall say: "Allah's curse be upon me if I am a liar in my accusation of zina against my wife (name of wife)"; and (b) the wife shall, in reply to the husband's statement made in accordance with clause (a), say upon oath before the Court: "I swear by Allah the Almighty that my husband is surely a liar in his accusation of zina against me" and, after she has said so four times, she shall say: "Allah's wrath be upon me if he is truthful in his accusation of zina against me". (2) When the procedure specified in sub-section (1) has been completed, the Court shall pass an order dissolving the marriage between the husband and wife, which shall operate as a decree for dissolution of marriage and no appeal shall lie against it. Punishment for qazf liable to tazir Whoever commits qazf liable to tazir shall be punished with imprisonment of either

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description for a term which may extend to two years and with whipping not exceeding forty stripes and shall also be liable to fine.

The Offence of Theft (Enforcement of Hudood) Ordinance, 1979.
4. Two kinds of theft: Theft may be either theft liable to 'hadd' or theft liable to 'tazir'. 5. Theft liable to Hadd: Whoever, being an adult, surreptitiously commits, from any 'Hirz', theft of property of the value of the 'nisab' or more not being stolen property, knowing that it is or is likely to be of the value of the 'nisab' or more is, subject to the provisions of this offence said to commit theft liable to 'hadd'. Nisab: It means minimum value of theft or minimum degree of theft that is 4.457 grams of gold. Hirz: It is Arabic word which means arrangements made for custody of property.There are two kinds of Hirz. (1) Hirz-Bil-Makan (2) Hirz-Bil-Hafiz Hirz-Bil-Makan: Such place where permission is required for entry. For example your house, office etc. In such places normally punishment is cutting of hand. Hirz-Bil-Hafiz: It means such place where permission is not required. For example mosque, park and public office.Normally the punishment is not cutting of hand but punishment under ppc. Explanation 1: In this section "stolen property" dos not include property which has been criminally misappropriated or in respect of which criminal breach of trust has been Committed. Explanation 2: In this section, "surreptitiously" means that the person committing the theft commits such theft believing that the victim of theft does not know of his action. For surreptitious removal of property it is necessary that, if it is day-time, which includes one hour before sunrise and two hours after sunset, surreption should continue till the completion of the offence and, if it is night, surreption need not continue after commencement of the offence. Explanation: If theft is committed from the same 'hirz' in more than one transaction, or from more than one 'hirz' and the value of the stolen property in each case is less than the 'Nisab', it is not theft liable to 'hadd' even if the value of the property involved in all the cases add up to or exceed, the 'nisab'. Illustrations (A) A enters a house occupied by a single family and removes from various rooms property the value of which adds up to, or exceeds the 'nisab'. Such theft is liable to 'hadd' even though the value of the property removed from any of the rooms does not amount to the 'nisab'. If the house is occupied by more than one family and the value of the property removed from the 'hirz1 of any one family is less than the 'nisab', then the theft is not liable to 'hadd' even though the value of the properties removed adds up to, or exceeds, the 'nisab'. (b) A enters a house several times and removes from the house on each occasion property the value of which does not amount to the 'nisab'. Such theft is not liable to 'hadd' even though the value of the properties removed adds up to, or exceeds the 'nisab'. 7. Proof of theft liable to hadd: The proof of theft liable to 'hadd Shall be in one of the following forms, namely: (a) the accused pleads guilty of the commission of theft liable to’ hadd'; and (b) At least two Muslim adult male witnesses, other than the victim of the theft, about whom the Court is satisfied, having regard to the requirements of 'tazkiyah-al-shuhood', that they are truthful persons and abstain from major sins (kabair), give evidence as eyewitnesses of the occurrence: Provided that, if the accused is a non-Muslim, the eye-witnesses may be non-Muslim:

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Provided further that the statement of the victim of the theft or the person authorized by he shall be recorded before the statements of the eye-witnesses are recorded. Explanation: In this section, "tazkiyah-al-shuhood" means the mode of inquiry adopted by a Court to satisfy itself as to the credibility of a witness. 8. Commission of theft liable to 'hadd' by more than one person: Where theft liable to 'Hadd' is. Committed by more than one person and the aggregate value of the stolen property is such that, if the property is divided equally amongst such of them as have entered the 'hirz' each one of them gets a share which amounts to, or exceeds, the 'nisab' the 'hadd' shall be imposed on all of them who have entered the Hirz, whether or not each one of them has moved the stolen property or any part thereof. 9. Punishment of theft liable to 'hadd': (1) whoever commits theft liable to 'hadd' for the first time shall be punished with amputation of his right hand from the joint of the wrist. (2) Whoever commits theft liable to 'hadd' for the second time shall be punished with amputation of his left foot up to the ankle. (3) Whoever commits theft liable to 'hadd' for the third time, or any time subsequent? thereto, shall be punished with imprisonment for life. (4) Punishment under sub-section (1) or sub-section (2) shall not be executed unless it is confirmed by the Court to which an appeal from the order of conviction lies, and, until the punishment is confirmed and executed the convict shall be dealt with in the same manner as if sentenced to simple imprisonment. (5) In the case of a person sentenced to imprisonment for life under sub-section (3), if the appellate Court is satisfied that he is sincerely penitent; he may be set at liberty on such terms and conditions as the Court may deem fit to impose. (6) Amputation shall be carried out by an authorized medical officer. (7) If, at the time of the execution of 'hadd' the authorized medical officer is of the opinion that the amputation of hand or foot may cause the death of the convict, the execution of 'hadd' shall be postponed until such time as the apprehension of death ceases. 10. Cases in which Hadd shall not be imposed: 'Hadd' shall not be imposed in the Following cases, namely:(a) When the offender and victim of the theft are related to each other as • Spouses; • Ascendants, paternal or maternal; • Descendants, paternal or maternal; • Brothers or sisters of father or mother; or • Brothers or sisters or their children; (b) When a guest has committed theft from the house of his host; (c) When a servant or employee has committed theft from the 'hirz' of his master or Employer to which he is allowed access; (d) When the stolen property is wild-grass, fish, bird, dog, pig, and intoxicant, musical instrument or perishable foodstuffs for the preservation of which provision does not exist; (e) When the offender has a share in the stolen property the value of which, after deduction of his share is less than the 'nisab'; (f) When a creditor steals his debtor's property the value of which after deduction of the amount due to him, is less than the 'nisab'; (g) When the offender has committed theft under 'ikrah' or 'iztrar'. Explanation: In this clause(i) "Ikrah" means putting any person in fear of injury to the person, property or honour of that or any other person; and (ii) "Iztrar" means a situation in which a person is in apprehension of death due to extreme hunger or thirst;

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(h) When the offender, before his apprehension, has, on account of repentance, returned the stolen property to the victim and surrenders himself to the authority concerned. 11. Cases in which Hadd shall not be enforced: (1) 'Hadd' shall not be enforced in the Following cases, namely: -(a) When theft is proved only by the confession of the convict but he retracts his confession before the execution of 'hadd'; (b) When theft is proved by testimony, but before the execution of 'hadd', any witness resiles from his testimony so as to reduce the number of eye-witnesses to less than two; (c) When, before the execution of 'hadd' the victim withdraws his allegation of theft or states that the convict had made a false confession or that any of the eye-witnesses have deposed falsely, and the number of eye-witnesses is thereby reduced to less than two; and (d) When the left hand or the left thumb or at least two fingers of the left hand or the right foot of the offender is either missing or entirely unserviceable. (2) In the case mentioned in clause (a) of sub-sec. (1) the Court may order retrial. (3) In a case mentioned in clause (b), or clause (c), or clause (d) of sub-section (1), the court may award 'tazir' on the basis of the evidence on record. 12. Return of stolen property: (1) If the stolen property is found in the original or in an identifiable form, or Ina form into or for which it may have been converted or exchanged, It shall be caused to be returned to the victim, whether it is in the possession of, or has been recovered from, the offender or any other person. (2) If the stolen property is lost or consumed while in the offender's possession and the 'Hadd' is enforced against him the offender shall not be required to pay compensation. 13. Theft liable to Tazir: Whoever commits theft, which, is not liable to 'hadd' or for which proof in either of the forms mentioned in Section 7 is not available, or for which 'Hadd' may not be imposed or enforced under this ordinance, shall be liable to Tazir. 14. Punishment for theft liable to Tazir: Whoever commits theft liable to 'tazir' shall be awarded the punishment provided for the offence of theft in the Pakistan Penal Code (Act XLV of 1860). 15. Definition of 'Haraabah': When any one or more persons, whether equipped with arms or not, make show of force for the purpose of taking away the property of another and attack him or cause wrongful restraint or put him in fear of death or hurt such person or persons are said to commit 'haraabah'. 16. Proof of 'Haraabah': The provisions of Section 7 shall apply mutatis mutandis for the proof of haraabah. 17. Punishment of 'Haraabah': (1) whoever, being an adult, is guilty of haraabah in the course of which neither any murder has been committed nor any property has been taken away shall be punished with whipping not exceeding thirty stripes and with rigorous imprisonment until the Court is satisfied of his being sincerely penitent: Provided that the sentence of imprisonment shall in no, case is less than three years. (2) Whoever, being an adult, is guilty of haraabah in the course of which no property has been taken away but hurt has been caused to any person shall, in addition to the punishment provided in sub-section (1), be punished for causing such hurt in accordance with such other law as may for the time being are applicable. (3) Whoever, being an adult, is guilty of haraabah in the course of which no murder has been committed but property the value of which amounts to or exceeds, the nisab has been taken away shall be punished with amputation of his right hand from the wrist and of his left foot from the ankle: Provided that, when the Offence of haraabah has been committed conjointly by more than one person, the punishment of amputation shall be imposed only if the value of share of each one of them is not less than the nisab: Provided further that, if the left hand or the right foot of the offender is missing or is entirely unserviceable, the punishment of amputation of the other hand or foot, as the case may be, shall no be imposed, and the offender shall be punished with rigorous imprisonment for a term which may extend to fourteen years and with whipping not

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exceeding thirty stripes. (4) Whoever, being an adult, is guilty of haraabah in the course of which he commits murder shall be punished with death imposed as hadd. (5) Punishment under sub-section (3) except that under the second proviso thereto, or under sub-section (4), shall not be executed unless it is confirmed by the Court to which an appeal from the order of conviction lies, and if the punishment be of amputation, until It is confirmed and executed; the convict shall be dealt with in the same manner as if sentenced to simple imprisonment. (6) The provisions of sub-section (6) and sub-section (7) of Section 9 shall apply to the execution of the punishment of amputation under this section. 18. Cases in which punishment of amputation or death for 'haraabah' shall not be imposed or enforced: The punishment of amputation, or death shall not be imposed or enforced for the offence of haraabah in cases in which hadd may not be imposed for theft liable to hadd and the provisions of Section 10 and Section 11 shall apply mutatis mutandis to such cases. 19. Return of property taken away during 'haraabah': The provisions of Section 12 shall apply mutates mutandis for return of the property taken away during haraabah so, however, that sub-section (2) of the said section shall have effect as if, for the word Hadd therein, the words "punishment of amputation of death" were substituted. 20. Punishment for 'haraabah' liable to tazir: Whoever commits haraabah which is not liable to the punishment provided for in Section 17, or for which proof in either of the forms mentioned in Section 7 is not available, or for which punishment of amputation or death may not be imposed or enforced under this ordinance, shall be awarded the punishment provided in the Pakistan Penal Code (Act XLV of 1860) for the offence of dacoity, robbery of extortion, as the case may be. 21. Punishment for "Rassagiri", or "Patharidari": (1) whoever extends patronage, protection or assistance in any form to, or harbours, any person or group of persons engaged in the theft of cattle, on the understanding that he shall receive one or more of the cattle in respect of which the offence is committed or a share in the proceeds therefore, is said to commit "Rassagiri" or "patharidari". (2) Whoever commits "Rassagiri" or "Patharidari" shall be punished with rigorous imprisonment for a term which may extend to fourteen years, or with whipping not exceeding seventy stripes, and with confiscation of all his immovable property and with fine.

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THE ARBITRATION ACT
An Act to consolidate and amend the law relating to Arbitration. Preamble: Whereas it is expedient to consolidate and amend the law relating to Arbitration in Pakistan. It is hereby enacted as follows:CHAPTER 1 Introductory 1. Short title, extent and commencement: (1) This Act maybe called the Arbitration Act, 1940. 2) It extends to the whole of Pakistan. 3) It shall come into force on the 1st day of July, 1940. 2. Definitions: In this Act, unless there is anything repugnant in the subject or context,a) “Arbitration agreement” means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not b) “Award” means an arbitration award; c) “Court” means a Civil Court having jurisdiction to decide the question forming the subject-matter of reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court; d) “legal representative” means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased, and, where a party acts in a representative character, the person on whom the estate devolves on the death of the party so acting; e) “Reference” means a reference to arbitration. CHAPTER II Arbitration without intervention of a court 1. Provisions implied in arbitration agreement: An arbitration agreement, unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference. 2. Agreement that arbitrators be appointed by third party: The parties to an arbitration agreement may agree that any reference there under shall be to an arbitrator or arbitrators to be appointed by a person designated in the agreement either by name or as the holder for the time being of any office or appointment. 3. Authority of appointed arbitrator or umpire irrevocable except by leave of Court: The authority of an appointed arbitrator of umpire shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the arbitration agreement. 4. Arbitration agreement not to be discharged by death of party thereto : 1) An arbitration agreement shall not be discharged by the death of any party thereto, either as respects the deceased or any other party, but shall in such event be enforceable by or against the legal representative of the deceased. (2) The authority of an arbitrator shall not be revoked by the death of any party by whom he was appointed. (3) Nothing in this section shall affect the operation of any law by virtue of which any right of section is extinguished by the death of a person.

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5. Provisions in case of insolvency: (1) Where it is provided by a term in a contract to which an insolvent is a party that any differences arising there out or in connection therewith shall be referred to arbitration, the said term shall, if the receiver adopts the contract, be enforceable by or against him so far as it relates to any such differences. (2) Where a person who has been adjudged an insolvent had before the commencement of the insolvency proceedings, become a party to an arbitration agreement, and any matter to which the agreement applies is required to be determined in connection with, or for the purposes of, the insolvency proceedings, then, if the case is one to which sub-section (1) does not apply, any other party to the agreement or the receiver may apply to the Court having jurisdiction in the insolvency proceedings for an order directing that the matter in question shall be referred to arbitration in accordance with the agreement, and the Court may, if it is of opinion that, having regard to all the circumstances of the case, the matter ought to be determined by arbitration, make as order accordingly. (3) In this section the expression “receiver” includes an Official Assignee. 6. Power of Court to appoint arbitrator or umpire: (1) In any of the following cases – (a) where an arbitration agreement provides that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment or appointments; or (b) if any appointed arbitrator or umpire neglects or refuses to act, or is incapable of acting, or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy; or (c) where the parties or the arbitrators are required to appoint an umpire and do not appoint him; any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy. 2) If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties. 7. Power to party to appoint new arbitrator, or, in certain cases, a sole arbitrator: Where an arbitration agreement provides that a reference shall be to two arbitrators, one to be appointed by each party, then, unless a different intention is expressed in the agreement,(a) if either of the appointed arbitrators, neglects or refuses to act, or is incapable of acting, or dies, the party who appointed him may appoint a new arbitrator in his place; (b) if one party fails to appoint an arbitrator, either originally or by way of substitution as aforesaid, for fifteen clear days after the service by the other party of a notice in writing to make the appointment, such other party having appointed his arbitrator before giving the notice, the party who has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator in the reference, and his award shall be binding on both parties as if he had been appointed by consent. Provided that the Court may set aside any appointment as sole arbitrator under made clause. (b) And either, on sufficient cause being shown, allow further time to the defaulting party to appoint an arbitrator or pass such other order as it thinks fit. Explanation: The fact that an arbitrator or umpire, after a request by either party to enter on and proceed with the reference, does not within one month comply with the request may constitute a neglect or refusal to act within the meaning of Section 8 and this section. 8. Provision as to appointment of three or more arbitrators: (1) Where an arbitration agreement provides that a reference shall be to three arbitrators, one to be appointed by each party and the third by the two appointed arbitrators, the agreement shall have effect as if it provided for the appointment of an umpire, and not for

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the appointment of a third arbitrator, by the two arbitrators appointed by the parties. (2) Where an arbitration agreement provides that a reference shall be to three arbitrators to be appointed otherwise than as mentioned in sub-section (1), the award of the majority shall, unless the arbitration agreement otherwise provides, prevail. (3) Where an arbitration agreement provides for the appointment of more arbitrators than three, the award of the majority, or if the arbitrators are equally divided in their opinions, the award of the umpire shall, unless the arbitration agreement otherwise provides, prevail. 9. Power to Court to remove arbitrators or umpire in certain circumstances: (1) The Court may, on the application of any party to a 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 misconducted himself or the proceedings. (3) Where an arbitrator or the 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. 10. Power of Court where arbitrator is removed or his authority revoked: (1) Where the Court removes an umpire who has not entered on the reference or one or more arbitrators (not being all the arbitrators), the Court may, on the application of any party to the arbitration agreement, appoint persons to fill the vacancies. (2) Where the authority of an arbitrator or arbitrators or an umpire is revoked by leave of the Court or where the Court removes an umpire who has entered on the reference or a sole arbitrator or all the arbitrators, the Court may, on the application of any party to the arbitration agreement, either –(a) appoint a person to act as sole arbitrator in the place of the person or persons displaced, or (b) order that the arbitration agreement shall cease to have effect with respect to the difference referred. (3) A person appointed under this section as an arbitrator or umpire shall have the like power to act in the reference and to make an award as if he had been appointed in accordance with the arbitration agreement. 11. Powers of arbitrator: The arbitrators or umpire shall, unless a different intention is expressed in agreement, have power to –(a) administer oath to the parties and witnesses appearing; (b) state a special case for the opinion of the Court on any question of law involved, or state the award, wholly or in part, in the form of a special case of such question for the opinion of the Court; c) make the award conditional or in the alternative; (d) correct in an award any clerical mistake or error arising from any accidental slip or omission; (e) administer to any party to arbitration such interrogatories as may, in the opinion of the arbitrators or umpire, be necessary. 12. Award to be signed and filed: (1) When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. (2) The arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with

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any depositions and documents which may have been taken and proved before them, to be filed in the Court, and the Court shall thereupon give notice to the parties of the filing of the award. (3) Where the arbitrators or umpire state a special case under clause (b) of Section 13, the Court, after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of, the award. 13. Power of Court to modify award : The Court may by order modify or correct an award –(a) Where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decision on the matter referred; or -(b) Where the award is imperfect in form, or contains any obvious error which can be amended without affecting such decision; or (c) Where the award contains a clerical mistake or an error arising from an accidental slip or omission. 14. 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 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 fact of it. (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. 15. Judgment in terms of award: Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award. 16. Power of Court to pass interim orders: (1) Notwithstanding anything contained in Section 17, at any time after the filing of the award, whether notice of the filing has been served or not, upon being satisfied by affidavit or otherwise that a party has taken or is about to take steps to defeat, delay or obstruct the execution of any decree that may be passed upon the award, or that speedy execution of the award is just and necessary, the Court may pass such interim orders as it deems necessary. (2) Any person against whom such interim orders have been passed may show cause against such orders, and the Court, after hearing the parties, may pass such further orders as it deems necessary and just. 17. 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. CHAPTER III Arbitration with intervention of a Court where there is no suit pending 18. 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 subject-matter of the agreement or any part of it, and where a

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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 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. CHAPTER IV Arbitration in Suits 19. Parties to suit may apply for order of reference: Where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference. 20. Appointment of arbitrator: The arbitrator shall be appointed in such manner as may be agreed upon between the parties.

Some more important about it
Arbitration agreement Whatever be the class of arbitrations there must be an arbitration agreement. As defined in the Arbitration Act, 1940, it means a written agreement to submit present or future differences to arbitration, whether an arbtirator is named therein or not [section 2 (2)]. Arbitrators The number of arbitrators can be one, two, three or even more. In the case of an even number of arbitrators, an umpire is to be appointed according to the procedure given in the Act [First Schedule. Where the arbitration agreement does not specify the number, the arbitration shall be by a sole arbitrator (First Schedule). An arbitrator may be named in the arbitration agreement or may be left to be appointed by a designated authority (First Schedule). Where the arbitration agreement is silent about the mode of appointment of arbitrators and the parties cannot agree about the choice of the arbitrator, the Act gives power to the court to make the appointment, after following the prescribed procedure (sections 8-10). An arbitrator who does not diligently conduct the proceedings, or who is guilty of misconduct, can be removed by the court after due inquiry (section 11). Death of a party does not terminate the arbitration proceedings, if the cause of action survives (section 6). The arbitrator has got certain statutory powers, including the power to administer oaths to witnesses, power to “state a case” for the opinion of the court etc. Court intervention If a party to an arbitration agreement refuses to go to arbitration, the other party can seek intervention of the court to compel a reference to arbitration (section 20). Procedure The Arbitration Act, 1940, is totally inadequate, in regard to matters of procedure. Of course the arbitrator must observe the essentials of natural justice, failing which; the

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arbitrator’s award can be set aside for misconduct (section 30). But various stages of the process are not dealt with in the Act. In practice, arbitration is conducted on the basis of (i) the pleadings (statement of claim and statement of defence), whereupon (ii) issues may be framed (if necessary), followed by (iii) affidavits, (iv) oral evidence, and (v) arguments. The award The award must be pronounced within the time limits laid down in the arbitration agreement or (failing such agreement), within 4 months of the commencement of hearing. However, the time limit can be extended by the court in certain circumstances (section 28, and First Schedule). The award has to be in writing and signed by the arbitrator. If there are more than one arbitrator, the majority view prevails. The Act itself does not provide that the arbitrator shall give reasons for the award. When the award is a non-speaking award, the scope for interference by the court with the award becomes somewhat limited. Court control over the award An award cannot be enforced, by itself. Judgment of the court has to be obtained in terms of the award (section 17). In the scheme of the Arbitration Act, 1940, the court may:– (a) Pass judgment in terms of the award (section 17), or (b) Modify or correct the award (section 15), or (c) Remit the award (on any matter referred to arbitration), for re-consideration by the arbitrator or umpire (section 16), or (d) Set aside the award (section 30). In short, the court may (i) totally accept the award, or (ii) totally reject it, or (iii) adopt the intermediate course of modifying it or remitting it. Modifying the award Modification of award by court The Court may, by order, modify or correct an award:– (a) where it appears to the court that a part of the award is upon a matter not referred to arbitration and can be separated from the other and does not affect the decision on the matter referred, or (b) Where the award is imperfect in form, or contains an obvious error which can be amended without affecting such decision, or (c) Where an award contains a clerical mistake or an error arising from an accidental slip or omission (section 15). Remitting the award The court may remit the award (or any matter referred to arbitration):– (a) Here the award has left undetermined certain matters or where it determines matters which are not referred to arbitration, and which cannot be separated from the rest 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 on the face of it (section 16). Setting aside the award The court can set aside the award, only on one or more of the following grounds, namely:– (a) That the arbitrator or umpire has misconducted himself or the proceedings; (b) That the award has been made after issue, by the court, of an order superseding the arbitration; or (c) That an award has been improperly procured or is otherwise invalid (section 30). Misconduct of the arbitrator (Setting aside the award) One of the principal grounds for setting aside the award under the Act of 1940 is the ground of misconduct. Section 30 of the Act expresses it in rather cryptic terms by phrasing it in this manner "the arbitrator has misconducted himself or the proceedings". No exhaustive definition of "misconduct" in this context can be given because misconduct is as large as life itself.

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Because of the endless variety of situations in life, treatment of the subject in an exhaustive manner is likely to degenerate into a mere catalogue of instances. It will be more useful if selected instances of misconduct are collected and are classified under a few convenient groups. In arranging the cases under such group, one should bear in mind the fact that misconduct may arise from the arbitrator's conduct of the case, the arbitrator's relations with the parties, the arbitrator's mode of arriving at the decision (in regard to the materials relied on by the arbitrator or the tests applied), and the arbitrator's mode of formulating his award. The Statute The law of arbitration in Pakistan is contained in the Arbitration Act, 1940 (a pre-partition enactment, which still continues in force). Its main features are summarized as under: The Act provides for three classes of arbitration:– (a) Arbitration without court intervention (Chapter II, sections 3-19); (b) Arbitration where no suit is pending, (but through court) (Chapter III, section 20) and (c) Arbitration in suits (through court) (Chapter IV, sections 21-25). The Act also contains further provisions, common to all the three types of arbitration (Chapter V, sections 26-38). Arbitration agreement Whatever be the class of arbitrations there must be an arbitration agreement. As defined in the Arbitration Act, 1940, it means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not [section 2 (2)]. Arbitrators The number of arbitrators can be one, two, three or even more. In the case of an even number of arbitrators, an umpire is to be appointed according to the procedure given in the Act [First Schedule. Where the arbitration agreement does not specify the number, the arbitration shall be by a sole arbitrator (First Schedule). An arbitrator may be named in the arbitration agreement or may be left to be appointed by a designated authority (First Schedule). Where the arbitration agreement is silent about the mode of appointment of arbitrators and the parties cannot agree about the choice of the arbitrator, the Act gives power to the court to make the appointment, after following the prescribed procedure (sections 8-10). An arbitrator who does not diligently conduct the proceedings, or who is guilty of misconduct, can be removed by the court after due inquiry (section 11). Death of a party does not terminate the arbitration proceedings, if the cause of action survives (section 6). The arbitrator has got certain statutory powers, including the power to administer oaths to witnesses, power to “state a case” for the opinion of the court etc. Court intervention If a party to an arbitration agreement refuses to go to arbitration, the other party can seek intervention of the court to compel a reference to arbitration (section 20). Procedure The Arbitration Act, 1940, is totally inadequate, in regard to matters of procedure. Of course the arbitrator must observe the essentials of natural justice, failing which; the arbitrator’s award can be set aside for misconduct (section 30). But various stages of the process are not dealt with in the Act. In practice, arbitration is conducted on the basis of (i) the pleadings (statement of claim and statement of defence), whereupon (ii) issues may be framed (if necessary), followed by (iii) affidavits, (iv) oral evidence, and (v) arguments. The award The award must be pronounced within the time limits laid down in the arbitration agreement or (failing such agreement), within 4 months of the commencement of hearing. However, the time limit can be extended by the court in certain circumstances (section 28, and First Schedule).

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The award has to be in writing and signed by the arbitrator. If there are more than one arbitrator, the majority view prevails. The Act itself does not provide that the arbitrator shall give reasons for the award. When the award is a non-speaking award, the scope for interference by the court with the award becomes somewhat limited. Court control over the award An award cannot be enforced, by itself. Judgment of the court has to be obtained in terms of the award (section 17). In the scheme of the Arbitration Act, 1940, the court may:– (a) Pass judgment in terms of the award (section 17), or (b) Modify or correct the award (section 15), or (c) Remit the award (on any matter referred to arbitration), for re-consideration by the arbitrator or umpire (section 16), or (d) Set aside the award (section 30). In short, the court may (i) Totally accept the award, or (ii) Totally reject it, or (iii) Adopt the intermediate course of modifying it or remitting it. Modifying the award Modification of award by court The Court may, by order, modify or correct an award:– (a) where it appears to the court that a part of the award is upon a matter not referred to arbitration and can be separated from the other and does not affect the decision on the matter referred, or (b) Where the award is imperfect in form, or contains an obvious error which can be amended without affecting such decision, or (c) Where an award contains a clerical mistake or an error arising from an accidental slip or omission (section 15). Remitting the award The court may remit the award (or any matter referred to arbitration):– (a) Here the award has left undetermined certain matters or where it determines matters which are not referred to arbitration, and which cannot be separated from the rest 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 on the face of it (section 16). Setting aside the award The court can set aside the award, only on one or more of the following grounds, namely:– (a) That the arbitrator or umpire has misconducted himself or the proceedings; (b) That the award has been made after issue, by the court, of an order superseding the arbitration; or (c) That an award has been improperly procured or is otherwise invalid (section 30). Misconduct of the arbitrator (Setting aside the award): One of the principal grounds for setting aside the award under the Act of 1940 is the ground of misconduct. Section 30 of the Act expresses it in rather cryptic terms by phrasing it in this manner "the arbitrator has misconducted himself or the proceedings". No exhaustive definition of "misconduct" in this context can be given because misconduct is as large as life itself. Because of the endless variety of situations in life, treatment of the subject in an exhaustive manner is likely to degenerate into a mere catalogue of instances. It will be more useful if selected instances of misconduct are collected and are classified under a few convenient groups. In arranging the cases under such group, one should bear in mind the fact that misconduct may arise from the arbitrator's conduct of the case, the arbitrator's relations with the parties, the arbitrator's mode of arriving at the decision (in regard to the materials relied on by the arbitrator or the tests applied), and the arbitrator's mode of formulating his award. Specific heads of misconduct

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Here are some specific heads of misconduct which recur frequently in practice:– proceeding ex parte, without justification (and analogous acts); private inquiries by the arbitrator; absence of the arbitrator; delegation by the arbitrator, or the arbitrator associating strangers with the arbitration; use of wrong criteria by the arbitrator; use of wrong material (by the arbitrator); irregularities in the award. Proceeding ex parte and analogous acts It is misconduct for an arbitrator:– to hear only one party in the absence of the other; or to fail to give notice of hearing; or to amend the issues behind the back of the parties, thereby causing prejudice. But it is not misconduct on his part to amend the issue at the time of writing an award, if no prejudice is caused to the parties. Competent court The court competent to exercise various powers under the Arbitration Act, 1940, is the civil court, which would be competent to entertain a civil suit, if a suit were to be filed on the cause of action which forms the basis of the arbitration. Private inquiries An arbitrator must decide on the evidence on record, and not on material obtained otherwise. It is misconduct on his part:– (I) to import his personal knowledge into the decision; to hold a private conference with a party; to hold a private meeting behind the back of the party; to make a private inquiry behind the back of the party; to listen to confidential information, adverse to a party, even if the arbitration agreement gives him full latitude, (though the position may be different, if the parties had the opportunity of checking and contradicting the information so proposed to be utilized); to communicate with one party, behind the back of the other party. Absence of arbitrators Where there is more than one arbitrator, they must all act together. The award is bad, if one arbitrator is absent. The position may be different if what was done during the absence of one arbitrator is done all over again by all the arbitrators, or if the act performed in the absence of one arbitrator is only ministerial, such as looking into an account book. Joint deliberations All arbitrators must deliberate jointly. However, the parties may waive the irregularity. Delegation by arbitrator, or associating strangers with the arbitration. An arbitrator cannot delegate his functions to another person. It follows, that if the award is given by a person to whom the arbitrator delegates his functions, the award is a nullity. There is, however, an exception to this rule, where the delegation is:–

(i) (ii)

With the consent of all the parties, or (ii) A purely ministerial act. An arbitrator cannot associate a third person with the decision-making process. Here again, there is no misconduct, if there was consent of all the parties, to such a course being adopted. Use of wrong criterion by arbitrator Sometimes, an arbitrator, while not guilty of procedural lapses (as in the above categories of misconduct), employs a wrong criterion for coming to a conclusion. The award may then be set aside on that ground. Examples are: (I) Assessment of damages for breach of contract, on the basis of rates prevailing in the black market (instead of the controlled rates);

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(ii) Ignoring very material documents, at a stage when the evidence has not yet been closed. Errors of law Questions of difficulty arise, when the arbitrator's decision is challenged, for an erroneous conclusion reached by the arbitrator on matters of law. The position appears to be a bit complex and cannot be stated with absolute certainty. However, broadly speaking, one can state the law on the subject in the form of the following propositions:– (a) where a question of law has been specifically referred to the arbitrator for his decision, then his ruling on that question, if bona fide and if not suffering from any other defect, is not open to challenge, merely because it is erroneous; (b) If a question of law has not been specifically referred to the arbitrator, his ruling on the point of law (if material to the result) may render the award void. First as to situation (a) above. Where an arbitrator is called upon to decide the effect of the agreement, he has to really to decide a question of law, (i.e., in interpreting the agreement), and hence his decision on the point is not open to challenge. In situation (b) above, the award of the arbitrator can be set aside on the ground of an error of law on the face of the award. However, for this purpose, the court cannot look into a document not referred to, in the award. Generally, the question of error of law can arise only if reasons are given in the award. However, if the very relief granted by the award is illegal, the position is different. Thus, an arbitrator cannot grant specific performance of a contract of service. Nor can a contract for the sale of movable property is enforced specifically, save in exceptional cases. Decision to be according to Legal Rights An arbitrator must decide according to legal rights, and not according to his own notions of fairness. There may, of course, be special situations where a different intention of the parties may be inferred and upheld judicially. Basis of interference by court The logical basis, on which the jurisdiction of the court to interfere for apparent error can be justified, needs first to be explained. The general principle is that an arbitrator is a final judge both of fact and of law. So far as questions of fact are concerned, this jurisdiction has been limited to decisions pronounced after serious procedural lapses, which reveal breach of natural justice or other technical misconduct. So far as errors of law are concerned, the jurisdiction of the court, (though not conferred in so many words by section 30), seems to have been based on the assumption that if the parties have not specifically referred a question for the decision of the arbitrator, then it is implied that the general power of the court to determine legal questions between the parties remains unimpaired. In theory, the jurisdiction can also be supported on the ground that the ultimate arbiters of questions of law should be the courts, so that uniformity is maintained. Reasoned and unreasoned awards Where the award is an unreasoned one, the court cannot interfere on the ground of an error therein. If the arbitrator chooses to give reasons, then the award can be set aside on the ground of error of law, although, in general, the reasonableness of the reasons themselves cannot be challenged. Interpretation of contracts The same principle is also followed, regarding questions of interpretation of contract as determined in the award. Court can interfere only if the award is a speaking award. It is only if the line of interpretation is set out in the award that the court can interfere. Breach of natural justice Of course, the arbitrator would be guilty of misconduct, if there is a breach of natural justice. Thus, it is well established that the arbitrator cannot depend on personal knowledge or arrive at a conclusion behind the back of the parties. But where the arbitrator decides a question of fact on the basis of the evidence and on the basis of answers given by the parties in response to queries from the arbitrator, the award cannot be said to be based on personal knowledge and cannot be set aside on that ground.

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Arbitrator's award may be set aside, if it awards charges for extra work, escalation charges and damages claimed by the construction contractor without any supporting material. WHAT IS A CONTRACT? An agreement enforceable by law is a contract. Thus for the formation of a contract there must be 1. an agreement 2. The agreement should be enforceable by law An agreement is defined as every promise and every set of promises forming the consideration for each other and a promise is an accepted proposal. FORMATION OF A CONTRACT For the formation of a contract the process of proposal or offer by one party and the acceptance thereof by the other is necessary. This generally involves the process of negotiation where the parties apply their minds make offer and acceptance and create a contract. When one person signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent of the other to such act or abstinence, he is said to make a proposal. When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. In order to convert a proposal into a promise, the acceptance must be

1. Absolute and unqualified - Any departure from the terms of the offer or any
qualification vitiates the acceptance unless it is agreed to by the person from whom the offer comes. An acceptance with a variation is no acceptance; it is simply a counter proposal.

2. Expressed in some usual and reasonable manner. - If the proposer prescribes
any particular manner of acceptance it has to be in that manner and where no manner is prescribed it should be in a usual and reasonable manner. WHO CAN ENTER INTO A CONTRACT? A person who a. is of the age of majority according to the law to which he is subject b. Is of sound mind - A person is said to be of sound mind for the purpose of making a contract, if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests. c. is not disqualified from contracting by any law to which he is subject Is competent to contract. Therefore a minor is not competent to contract and an agreement by a minor is void ab initio. He can not ratify an agreement on attaining the age of majority and validate the same. (Void ab initio means it has at no time had any legal validity). The following persons are therefore incompetent to contract 1. Minors 2. Persons of unsound mind 3. Persons disqualified by law to which they are subject.

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ESSENTIALS OF A VALID CONRACT All agreements are contracts if they are made

a. BY THE FREE CONSENT OF PARTIES competent to contract - Consent is said to be
free if it is not caused by

Coercion - Consent is said to be caused by coercion when it is obtained by pressure exerted by either committing or threatening to commit an act forbidden by the Indian Penal Code or unlawfully detaining or threatening to detain any property. Undue influence - A contract is said to be induced by "undue influence" where the relation subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. Fraud - Means and includes the following acts done with the intention to deceive or to induce a person to enter into a contract. (a) the suggestion that a fact is true when it is not true and the person making the suggestion does not believe it to be true (b) active concealment of a fact by a person who has knowledge or belief of the fact, (c) promise made without the intention of performing it. Misrepresentation - When a person positively asserts that a fact is true when his information does not warrant it to be so, though he believes it to be true, it is misrepresentation. A breach of duty which brings an advantage to the person committing it by misleading the other to his prejudice is also a misrepresentation. Mistake - Where both parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. An erroneous opinion as the value of the thing, which forms the subject matter of the agreement, is not deemed as mistake as to a matter of fact. Unilateral mistake, i.e. the mistake in the mind of only one party does not affect the validity of the contract.

b. FOR A LAWFUL CONSIDERATION AND OBJECT Consideration or object is unlawful if (1) It is forbidden by law, (2) Is of such a nature if permitted it would defeat the provisions of any law, (3) It is fraudulent, (4) The court regards it immoral, (5) The court regards it opposed to public policy. Every agreement of which the consideration or object is unlawful is void. c. NOT EXPRESSLY DECLARED TO BE VOID. VOID AGREEMENTS

1. Agreements void if considerations and objects unlawful in parts. 2. Agreement without consideration is void, unless it is in writing and registered, or
it is a promise to compensate for something done, or is a promise to pay a debt barred by limitation.

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3. Agreement in restraint of marriage. Every agreement in restraint of the marriage
of any person, other than a minor is void. It is the policy of law to discourage agreements, which restrain freedom of marriage. Where a party is restrained from marrying at all, or for marrying for a fixed period or from marrying a particular person, or class of persons, the agreement is void.

4. Agreement in restraint of trade. Every agreement, by which one is restrained
from exercising a lawful profession, trade or business of any kind, is to that extent void.

5. Agreement in restraint of legal proceedings. Every agreement by which any
party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights is void to that extent.

6. Agreements for uncertainty. Agreements the meaning of which is not certain, or
capable of being made certain, are void.

7. Agreements by way of wager/ Bet. Agreements by way of wager are void; and no
suit shall be brought for recovering anything alleged to be won on wager, or entrusted to any person to bide by the result of any game or other uncertain event on which any wager is made. (Wager means betting or gambling). However certain prizes for horseracing are exempted.

VOIDABILITY OF AGREEMENTS WITHOUT FREE CONSENT When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. A party to a contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true. Exceptions 1. If such consent was caused by misrepresentation or by fraud and the party had the means of discovering the truth with ordinary diligence, the contract is not voidable 2. A fraud or misrepresentation which does not cause a person to consent to a contract does not render a contract voidable. 3. BREACH OF CONTRACT 4. The parties to a contract must either perform or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of the Act, or any other law. 5. 6. Promises bind the representatives of the promisor in the case of death of such promisor before performance, unless a contrary intention appears from a contract. 7. In a contract the agreement being enforceable by law, each party to the contract is legally bound to perform his part of the obligation. Non-performance of the duty undertaken by a party in a contract amounts to breach of contract, for which he can be made liable.

REMEDIES

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When a party to the contract makes a breach of contract, there are two possible alternatives available to the other party. Firstly to bring an action for the breach of contract, and secondly he may bring an action for specific performance of the contract. COMPENSATION IN CASE OF BREACH 1. Compensation for loss or damage caused by breach of contract. For the breach of contract damages is the most appropriate remedy. When a contact has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote or indirect loss or damage sustained by reason of the breach. 2. Compensation for breach of contact where penalty stipulated for. When a contract has been broken and a sum has been named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether actual damage or loss is proved to have been caused thereby, to receive from the party who as broken the contract reasonable compensation not exceeding the amount so named or, the penalty stipulated for.

3. Party rightfully rescinding contract entitled to compensation A person who rightfully rescinds a contract is entitled to compensation for any damage, which he has sustained through non-fulfillment of the contract. SPECIFIC PERFORMANCE Specific performance means actual execution of the contract as agreed between the parties. Specific Performance of any contract may, in the discretion of the court be enforced in the following situations • • When there exists no standard for ascertaining the actual damage caused by the non-performance of the act agreed to be done; or When the act agreed to be done is such that compensation in money for its nonperformance would not afford adequate relief.

Exceptions: where compensation would be adequate relief are: 1. Agreement by a landlord for repair of the rented premises; 2. Contract for the mortgage of immovable property; 3. Contract for the sale of any goods, for instance machinery or buffaloes. However, a contract to deliver rare coins would be specifically enforceable, as compensation would not constitute adequate relief in such a case; 4. An agreement to pay money by installments; 5. An agreement for lending money. BESIDES THE FOLLOWING:

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• A contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms, cannot be specifically enforced. Another situation when a contract cannot be specifically enforced is where "the contract is in its nature determinable". A contract is said to be determinable, when a party to the contract can put it to an end. A contract the performance of which involves the performance of a continuous duty, which the Court can not supervise, cannot be specifically enforced.

PERSONS WHO CANNOT OBTAIN SPECIFIC PERFORMANCE 1. The specific performance of a contract cannot be obtained in favour of a person who could not be entitled to recover compensation for the breach of contract. 2. Specific performance of a contract cannot be enforced in favour of a person: i. who has become incapable of performing the contract that on his part remains to be performed, or

ii. who violates any essential term of the contract that on his part remains to be performed, or iii. who acts in fraud of the contract, or iv. Who willfully acts at variance with, or in subversion, of the relation intended to be established by the contract.

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