Law:

Section:

(a) Arbitration Act (X of 1940)---.--- ---.----Ss. 20 & 4---.---Application for filing arbitration agreement in court and referring the matter to arbitration---.---Petroleum Concession Agreement and Petroleum Farm out Agreement---.---Petitioners, on the basis of a Petroleum Concession Agreement signed between the -Government and the respondents, had entered into a Farmout Agreement with the respondents to carry out petroleum 'exploration operations---.---Deed of Assignment for the exploration work was signed between the parties on the basis of said Farmout Agreement---.---Under said Farmout Agreement and the Deed of Assignment, the majority 75% shares of the operation were transferred to the plaintiffs while the remainder minority shares were retained by the respondents and the Government---.---Dispute between the parties arose relating to default in payment and non participation in work by the respondents after exploration work had started on the basis of the Farmout Agree") ent---.---Contention of the petitioners was that the forum for settlement of such dispute under the Farmout Agreement was arbitration, and that the respondents did not want to initiate arbitration---.---Contention of the respondents was that the transfer of shares of the operations to the petitioners was illegal which had been challenged in a constitutional petition, and the defendants had initiated a civil suit regarding the demand for payment, and the right of the petitioners to 'carry out exploration work and in presence of said constitutional petition and civil suit, the matter could not be referred to arbitration and that the Farmout Agreement was superseded by the Deed of Assignment---.---Validity---.---Deed of Assignment itself was issued on the basis of the Farmout Agreement, and it could not be said that the Deed of Assignment had overruled the Farmout Agreement--Respondents, on the basis of Farmout Agreement had agreed to transfer 75% of the working interest to the plaintiff, and approval for the said transfer was given by the President of Pakistan by virtue of the Deed of Assignment---.---Farmout Agreement as well as the Deed of Assignment determined the rights and…

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