Law: Arbitration Act, 1940

Section: 34

Law: Civil Procedure Code (V of 1908)

Section: O.XXXIX,Rr.1,2

(a) Arbitration Act (X of 1940)--- ----S. 34---Stay of legal proceedings---Locus standi---Term 'any party to such legal proceedings in S. 34 of Arbitration Act, 1940 is followed by the qualification 'at any time before filing a written statement or taking any other steps in proceedings'---Only defendant to a suit files written statement, a priori it is apparent that S. 34 of Arbitration Act, 1940, does not cater to an application for the side of a plaintiff. (b) Civil Procedure Code (V of 1908)--- ----O.XXXIX, Rr.1 & 2---Suit for declaration and injunction---Interim injunction, refusal of---Bank guarantee, encashment of---Autonomy, principle of---Parties entered into a contract for performance of certain works to be done---Plaintiff issued performance guarantee in favour of defendant company---Dispute had arisen between the parties and defendant called the Bank to encash the guarantee---Validity---Once a call had been made, the Court could not then grant injunctive relief against beneficiary as the right to payment under the instrument already stood crystallized when the call was made---Injunctive relief against issuer could be granted in theory only if fraud exception were satisfied---Merely establishing fraud was not always enough and balance of convenience the harm to beneficiary in preventing Bank from paying weighed against the harm to plaintiff in allowing Bank to pay must justify restraining payment---No distinction could be drawn merely because the bonds were issued by an Insurance Company rather than a Bank---Plaintiff failed to make out a prima facie case for an injunction restraining encashment of bonds---Application was dismissed in circumstances. Pakistan State Oil Company Limited v. Messrs Jilani (Pvt.) Limited and another 2018 MLD 1770; Ch. Abdur Rauf v. Mrs. Zubeda Kaleem and others 2001 CLC 664 and Arbab Abdul Qadir v. Mst. Bibi Fatima 1984 CLC 546 distinguished. Pakistan Engineering Consultants v. Pakistan International Airline Corporation and others 1993 CLC 1926; Pakistan Engineering Consultants v. Pakistan International Airline Corporation and others 1989 SCMR 379; Crescent Steel and Allied Products Limited v. Messrs Sui Northern Gas Pipe…

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