Law: Arbitration Act, 1940

Section: 34

Law: Civil Procedure Code (V of 1908)

Section: S.115,O.VII,R.11

(a) Arbitration Act (X of 1940)--- ----S. 34---Civil Procedure Code (V of 1908), O. VII, R. 11---Arbitration clause---Stay of proceedings---Principle---Plaintiff filed suit for recovery of money and was aggrieved of stay of proceedings---Defendants after availing two opportunities for filing of written statement, moved application under O. VII, R. 11, C.P.C. seeking rejection of plaint on grounds that suit was not maintainable in view of arbitration clause available in contract agreement---Application filed by defendants under O. VII, R. 11, C.P.C. was treated as an application under S. 34 of Arbitration Act, 1940 and proceedings were stayed---Validity---Mere wrong mentioning of provision of law could not deprive a party from relief for which it was otherwise entitled---Such was not a matter hinging upon wrong mentioning of a provision as defendants with conscious mind moved application by invoking provision of O.VII, R. 11 C.P.C.---Defendants had no intention to seek stay of proceedings rather they while canvasing multiple reasons, including arbitration clause of agreement, sought rejection of plaint---Application moved by defendants could not be treated as application under S. 34 of Arbitration Act, 1940 and proceedings could not be stayed--- High Court set aside and decree passed by Trial Court resulting into dismissal of application filed by defendants--- Revision was allowed in circumstances. Muhammad Farooq v. Nazir Ahmad and others PLD 2006 SC 196 and Yezdiar Homi Kaikobad and another v. Ferozsons Ltd. through Chief Executive and 3 others 2005 YLR 783 rel. (b) Arbitration Act (X of 1940)--- ----S. 34---Civil Procedure Code (V of 1908), O. VII, R. 11---Stay of proceedings and rejection of plaint---Distinction---Provision under O. VII, R. 11, C.P.C. can be invoked even without any formal application, if court is satisfied that plaint is hit by any of four eventualities mentioned therein, consequence thereof is rejection of plaint; whereas, provision under S. 34 of Arbitration Act, 1940 cannot be invoked by court by its own and it is party to proceedings who may at any time before filing a written statement or taking any other steps in proceedings can apply…

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