Law:

Section:

Arbitration Act, 1940 (X of 1940)-- ----S. 20(4)--Appointment of arbitrator in terms of arbitration clause--Sufficient cause--Payment due under contract--Full and final settlement--Validity of letter was never challenged nor formed part of dispute--Prior to final payment, dispute arose between parties as to quantum of payment--Validity--An existing dispute relating to a matter falling within ambit of arbitration agreement is a sine qua non for invoking jurisdiction of Court under Section 20 of Act, 1940 and absence thereof would be a "sufficient cause" in terms of Section 20(4) of Act, 1940 for declining to direct filing of arbitration agreement--Where a claim is raised and finally settled through accord and satisfaction by payment or adjustment there would be no "existing dispute" requiring resolution through arbitration--If original contract is substituted through novation, lawful rescission or alteration arbitration clause therein may also perish thereby precluding a reference to arbitrators--Acceptance of settlement may be equivocal or "without prejudice" or substantial questions as to its true import meaning or effect may be raised by opposite side--Dispute arising from contract would exist requiring adjudication by forum chosen by parties i.e. Arbitrators and appropriate orders in that behalf may be passed under Section 20 of Act, 1940, provided such dispute has been raised and is before Court seized of an application under Section 20, Arbitration Act. PLD 1954 Sindh 56, 1999 MLD 254, 1986 CLC 1350 & 1984 CLC 3347, ref. THIS JUDGMENT DELIVERED BY: Sh. Azmat Saeed, J.- This Civil Appeal is directed against the judgment dated 01.4.2008 passed by the learned Lahore High Court, Lahore, whereby an Appeal filed by the Respondent under Section 39 of the Arbitration Act, 1940 against the Order dated 18.5.2002 was allowed and the Order impugned therein was set aside. 2. The brief facts necessary for adjudication of the lis at hand are that the Appellant i.e. Industrial Fabrication Company was awarded a contract by the Respondent i.e. Pak American Fertilizer Limited on 03.10.1996 and the work thereunder was completed and final bill submitted by the Appellant on…

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