Law: Arbitration Act, 1940

Section: 20,34

Law: Civil Procedure Code (V of 1908)

Section: 2

Law: Specific Relief Act, 1877

Section: 12,42,54

(a) Arbitration Act (X of 1940 )---

----Ss.20 34---Civil Procedure Code (V of 1908 ), O.VII, R.2---Specific Relief Act (I of 1877 ), Ss.12, 42 54---Suit for recovery of money, declaration, injunction, damages---Arbitration clause in agreement---Scope---Stay of proceedings sought without approaching the Court for appointment of arbitrator---Defendants/applicants had sought stay of proceedings pursuant to an arbitration clause in the agreement between the parties---Agreed (arbitration) clause though provided that if any difference or dispute would arise between the parties touching the true intent of construction or the incident or consequence of the agreement or of the applicable statutes or relating to any breach of the agreement, such difference or dispute, if the parties would agree, be resolved by them amicably and in the absence of an amicable resolution thereof, same would be referred to arbitration as a condition precedent to any action of law---Defendants/applicants sought protection under said arbitration clause for stay of the proceedings, however, if defendants/applicants thought that there was any dispute between the parties in relation to the agreement in question then they ought to have approached the Court under S.20 of the Arbitration Act, 1940, for appointment of arbitrator and decision thereof, which was not done in the present case--- defendants/applicants had attempted to delay suit proceedings for the reason that it was merely a case of recovery against them and nothing else, which did not appear to be any dispute as to or in relation to the agreement itself---If there was any alleged defective supply then defendants/applicants ought to have approached the Court first to show their bona fide as to the defective supply, which had not been done---Record revealed that various goods and services were supplied and for such purposes on each occasion, purchase orders were placed for such goods and services by the defendants/applicants were accordingly supplied and rendered by the plaintiff---When invoices were raised the defendants/applicants failed to settle them, whereas it also appeared to be a matter of fact that the defendants/applicants had made partial/little payment against the total outstanding amount, which could safely be concluded that there was no dispute between the parties except the outstanding amount---Matter appeared purely to be of simple recovery and defendants/applicants had not come up before the Court seeking enforcement of arbitration agreement and for referral of their dispute to the arbitrator---High Court declined to stay proceedings---Application was dismissed, in circumstances.

M/S Shell Pakistan Ltd. v. M/S Bhoja Air (Pvt.) Ltd. 2007 MLD 1424; Mst. Suriya Waseem Usmani and 9 others v. LM International (Pvt.) Ltd. and another 2002 CLD 624 and Shin Satellite Public Company Limited through Attorney v. M/S KASB Technology Services Limited 2016 YLR 2322 ref.

(b) Arbitration Act (X of 1940)---

----Ss.20 34---Parties while seeking various relief(s) under the Arbitration Act, 1940 including application under Ss.20 34 of the Arbitration Act, 1940 could not be allowed to take refuge under procedural advantages to avoid a trial within the ambit of general law.

OREDR

MUHAMMAD JUNAID GHAFFAR, JUSTICE:---.---

This is an Application under Section 34 of the Arbitration Act, 1940 filed on behalf of Defendants Nos.1 and 2, whereby, it has been prayed to stay instant proceedings and refer the matter to Arbitration. Learned Counsel for the said Defendants has contended that Plaintiff No.1 and Defendant No.1 had a relationship of Partnership pursuant to an Agreement dated 01.10.2014, wherein, Clause-26 provided that if any difference or dispute arises between the parties hereto, the matter shall be referred to Arbitration, and therefore, the issue raised on behalf of the Plaintiff in this matter is covered by the Arbitration Clause, hence listed application be allowed. He submits that Defendants have not participated in the proceedings as well and they are willing to proceed with the matter before the Arbitrator in terms of Agreement, therefore, listed application merits consideration. In support he has relied upon PLD 1981 SC 553 (Pakistan International Airlines Corporation v. M/S Pak Saaf Dry Cleaners), PLD 1961 Karachi 700 (M/S Gill Co. (Karachi) Ltd. v. M/S Samad Aziz Co.) and 1990 CLC 47 (Hyderabad Municipal Corporation v. M/S Columbia Enterprises).

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