Law: Arbitration Act, 1940

Section: 34

Arbitration Act (X of 1940)---

----S. 34---Specific Relief Act (I of 1877), Ss.42 & 54---Suit for declaration, injunction, rendition of accounts, recovery of damages and mesne profit---Arbitration---Stay of legal proceedings---Phrase "taking any other steps in the proceedings"---Applicability---Appellant / defendant was aggrieved of dismissal of his application to stay legal proceedings so as to refer the matter to arbitration---Validity---If in a contract, there is provision of resolution of dispute between the parties by way of arbitration and parties have agreed to such forum, then such forum is to be resorted to and given preference over filing of suit---If one of the parties to the contract by-passing forum of arbitration files a suit, then the other party can file application for stay as contemplated under S.34 of Arbitration Act, 1940 and if Trial Court is satisfied then order for stay of proceedings in the suit can be passed to enable resolution of dispute between the parties by way of arbitration only---Conditions precedent for application under S.34 of Arbitration Act, 1940 are that the party applying for stay has not filed written statement or taken "any other steps in the proceedings" indicating that right to invoke arbitration clause is intentionally abandoned in favour of Court proceedings---Nothing was available over surface of record to construe that conduct of appellant / defendant, in order to be termed as "a step in the proceedings", was such as would manifestly had displayed an unequivocal intention to proceed with the suit and giving up right to have the matter disposed of by arbitration---High Court set aside order in question as the same was passed by Trial Court in disregard of parameters and criteria for test laid down by the Supreme Court for ascertainment and determination of act of appellant / defendant in order to be termed as "a step in the proceedings"---High Court remanded the matter to Trial Court for decision afresh on application under S.34 of Arbitration Act, 1940---Appeal was allowed, in circumstances.

Pakistan International Airlines Corporation v. Messrs Pak Saaf Dry Cleaners PLD 1981 SC 553; Pakistan Stone Development Company Limited through Chief Executive Officer v. Muhammad Yousaf and another 2018 CLC 877; Province of Punjab through Secretary to Government of Punjab, Communication and Works Department and 4 others 1986 CLC 2800; "MD. ESACK v. Raja Miah and another PLD 1969 Dacca 719; Muhammad Farooq v. Nazir Ahmad and others PLD 2006 SC 196; Muhammad Ilyas Khokhar v. Ihsan Ilahi Mughal 2000 CLC 206; Muneer Flour Mills (Private) Limited and 4 others v. National Bank of Pakistan through Chief Manager and 2 others 2005 CLD 1019; Government of the Punjab and others v. Messrs Muhammad Asad & Co." 2021 CLC 2135; Aftab Ahmad Khan and another v. Wazir Ahmad and 4 others 2014 CLC 1401; Union of India, Applicant v. Girish Ghandra and others, Opposite Party AIR 1953 ALL. 149 (Vol.40, C.N. 66); Abdul Quddoos Dost Mohammad Momin and another, Plaintiffs-Appellants v. Abdul Ghani Abdul Rahman and another, Defendants-Respondents AIR 1954 NAGPUR 332; (Vol. 41, C. N. 115); Messrs SGEC-AMC JV through Authorized Officer v. National Highway Authority through Chairman 2024 CLD 301; BNP (Pvt.) Limited v. Collier International Pakistan (Pvt.) Limited 2016 CLC 1772; Karachi Dock Labour Board v. Messrs Quality Builders Ltd. PLD 2016 SC 121; National Highway Authority through Chairman, Islamabad v. Messrs SAMBU Construction Co. Ltd. Islamabad and others 2023 SCMR 1103 and TAISEI Corporation and another v. A.M. Construction Company (Pvt.) Ltd. and another 2024 SCMR 640 ref.