DTO rejects Businessmen Forum plea

Director Trade Organisations (DTO) of the Commerce ministry on Thursday rejected the plea of Businessmen Forum (BF) and observed in his order that constitution of arbitral tribunal by the FPCCI under section 12 (2) of T.O. Ordinance 1961, was just and proper. The DTO's verdict has come in response to a petition filed before him by Sardar Mohammad Ashraf and Engineer Abdul Jabbar of the BF versus Federation of Pakistan Chambers of Commerce and Industry (FPCCI), wherein the petitioners questioned the legal status of the arbitral tribunal constituted by the President FPCCI.
In his 11-page detailed decision, DTO Haider Raza said, " I have heard the learned counsels appearing from both sides, gone through the provision of law made in the T.O. Ordinance, 1961, the relevant provisions of memorandum and articles of association of FPCCI and the arbitration rules, governing arbitration proceedings of the FPCCI and did not find any express prohibition imposed, on the delegation of powers by the managing committee to the President, FPCCI to appoint arbitral tribunals".
The DTO added on the contrary sub-article (iv) of article 19 of the memorandum allows delegation of any of the managing committee's powers to zonal committee or sub-committee. The sub-committee may consist of one or more persons. The act of delegation of power by managing committee to the president vide its resolution passed on 01.01.2003 may well be construed to be the delegation to a sub-committee consisting of one person ie the President of the FPCCI.
He observed that the fact that constitution of arbitral tribunal has been a long standing practice prevalent in the FPCCI repeated in every term by newly elected managing committee and never agitated by any one including the petitioners further lends the balance of convenience in favour of the respondents.
The order said, "One of the petitioners in the constitutional petition No D-1461/2004 and complainant in this case has himself acted as member of arbitral tribunals and the other was a participant of the meeting of managing committee held on 01-01-2003 wherein power to constitute arbitral tribunals was delegated to the President, amply suggests that the petitioners had accepted the practice to be lawful."
The order added that it has been observed that the impugned tribunals were constituted during the period from December 1, 2004 to December 13, 2004. The complainants have not produced on record any objection raised by them on the legality of the tribunals until the outcome of the elections held on December 14 and 16, 2004. The parties before the tribunals have contested proceedings held in these tribunals. None of the contestant parties have ever complained against the formation or propriety of these tribunals before this forum. It is also observed that the petitioners were never a party in any of proceedings before impugned tribunals. In the absence of any specific complaint or objection against the members of the impugned tribunals, no bias is attributable against them.
The order noted that the allegation regarding non-consultation by the President with the office bearers while appointing arbitral tribunals does not hold good in the face of the affidavits filed by five out of seven Vice President stating that they were consulted by the President while constituting arbitral tribunals. These affidavits prove that substantial compliance of the requirement of consultation was made by the President. The alleged non-consultations with the remaining two vice-presidents will, therefore, not vitiate the exercise of power by the President.
It added that the petitioners have also failed to establish that any fixed grouping existed among the members of the Federation contesting these elections under one or the other banner. No documentary evidence has been produced to prove that members appointed to the arbitral tribunals belong to a particular group. Hence, the plea of the petitioner that the members of arbitral tribunals were acting as judges of their own cause is not tenable. The plea taken up by the petitioners that President did not envisage a scenario where Federation itself is a party to a dispute is also not maintainable as the arbitral tribunals were adjudicating nomination of the members of its constituent entities ie chambers and associations on the general body of the Federation and in some cases against the reserved seats in the managing committee. Even otherwise the federation itself is a trade body within the meaning of section 3 of T.O. Ordinance, 1961 and is supposed to be governed by the provisions of the ordinance.
The DTO said, "In view of the what has been observed above, I hold that constitution of the arbitral tribunals by the President of FPCCI in terms Section 12(2) of T.O. Ordinance, 1961 was just and proper."