CDA asks court to set aside Rs643m award to Parliament Lodges contractor – Pakistan
ISLAMABAD: In a case involving the multi-billion-rupee public project of Parliament Lodges extension that has remained unfinished for nearly 15 years, the Capital Development Authority (CDA) on Saturday mounted an attack on the arbitration award of over Rs643 million in favour of the contractor, alleging that the award was the product of “legal misconduct”, jurisdictional overreach and a complete disregard of contractual obligations.
The arguments were concluded before Additional District Judge (West) Amir Zia, who is hearing the CDA’s appeal against an earlier judgement.
The matter has now been adjourned until Sept 19.
Appearing for the CDA, Advocate Kashif Ali Malik argued that the case illustrated how “the victim has been turned into the accused”, with a public authority allegedly being directed to compensate a contractor whose project, according to the CDA, still stands incomplete years after its contractual completion date.
The dispute concerns construction of 104 family suites for members of the parliament and 500 servant quarters at Parliament Lodges.
The contract, worth approximately Rs2.73 billion, was awarded in 2011 with a scheduled completion date of November 2013.
According to the counsel, despite extensions of time and repeated opportunities, the project has yet to be completed.
Mr Malik argued that the arbitration itself originated from a settlement between the parties under which only eight specifically identified disputes were referred to the sole arbitrator.
Instead of confining himself to those disputes, the arbitrator entertained a massive financial claim which neither formed part of the original statement of claim nor fell within the agreed terms of reference.
He maintained that while its own counter-claim, involving recovery of advances, consultant charges, market rent and declarations regarding the contractor’s alleged defaults, was rejected without adjudication on merits, the arbitrator granted the contractor nearly Rs640 million on a claim allegedly introduced only during the recording of evidence.
The counsel added that the most striking feature of the award was the manner in which the amount was determined.
According to him, the arbitrator awarded exactly half of the amount claimed without appointing an auditor, engaging a chartered accountancy firm, obtaining an independent financial assessment or applying any recognised accounting or contractual methodology.
He argued that the contractor had itself furnished a written undertaking in 2014 while seeking extension of time, acknowledging continuation of the project.
Yet, according to the counsel, it subsequently sought financial compensation for the very period covered by that extension, a contradiction which, he argued, went unnoticed by the arbitrator.
Mr Malik pointed out that the arbitration award had initially been filed before the trial court by counsel for the contractor rather than by the arbitrator himself, prompting objections from the CDA on the ground that such filing was contrary to the Arbitration Act.
The trial court had initially accepted those objections and remitted the award for filing in accordance with law.
However, the ensuing litigation took an unusual course.
According to the counsel, although the contractor’s appeal was announced as dismissed by the Islamabad High Court, the subsequently issued written judgement allowed the appeal – a circumstance which the counsel pointed out was itself noted in the judgement.
The matter ultimately reached the Supreme Court before returning to the trial court.
The litigation did not end there. After the trial court eventually made the award rule of the court, the Islamabad High Court, in a judgement authored by Justice Inaam Ameen Minhas, and approved for reporting, set aside that decision and held that a civil court was under a legal obligation to independently examine whether an arbitral award suffered from patent illegality,
misconduct or jurisdictional defects before converting it into a decree.
Despite those observations, the trial court again dismissed the CDA’s objections, reaffirmed the award and additionally granted interest under Section 29 of the Arbitration Act, leading to the present appeal.
The contractor’s primary argument was that the trial court lacked the legal jurisdiction to order the return of the arbitration “Award.”
They contended that the Arbitration Act of 1940 does not prescribe a specific time limit for the filing of an award in court. Therefore, the trial court’s decision to return the award and direct its resubmission within thirty days was made without any lawful authority.
Furthermore, the contractor argued that the initial filing of the “Award” on 11.09.2018 already met all the statutory requirements. If the court had any doubts or queries regarding the filing, the correct procedural course would have been to seek clarification from the parties involved, rather than returning the award.
On this basis, they maintained that the trial court’s initial order was invalid and that the subsequent order dismissing the Authority’s objections was sound and did not require any interference from the higher court.
Published in Dawn, July 19th, 2026
