Law: Arbitration Act (X of 1940)

Section: 34 , 2 , 3

  Arbitration Act (X of 1940) ----Ss. 34 & 2-A--- Law Reforms Ordinance (XII of 1972). S.3--- Intra-Court Appeal  Application for stay of suit and reference of proceedings to arbitration was rejected by High Court (Single Judge) holding that "effective date" of contract never came into existence and, thus, arbitration clause could not be invoked ---Validity--- Defendant had questioned the very existence of legally binding contract--- Signing of contract containing arbitration clause, however, had been admitted and no illegality invalidating the same had been alleged  Expression in arbitration clause "arising out of or in connection, regardless of nature of dispute" appeared to convey broader amplitude  Definition of expression "effective date" in agreement neither proved its factual non-existence nor its legal validity-- -Agreement in question had created certain obligations which were required to be performed for purpose of reaching "effective date" in terms of arbitration clause in such agreement  Distinction must be kept between formation of contract and performance of covenants of parties created thereunder  Fact that parties were not required to perform obligation till -specific date even contingency would not mean that no contract existed-- Promisor might be relieved of obligation to perform on account of some supervening event not in contemplation of parties---Plaintiffs could possibly urge that effective date not being arrived they were not required to perform their obligation under contract in question; they, however, could not urge that contract never came into being  Where contract was frustrated, contract itself would not come to an end; only one party or both of them would stand absolved from performing their obligation  Finding of High Court (Single Judge) to the effect that matter could not be referred to arbitration was set aside and parties were directed to appoint their respective arbitrators, who would enter upon reference within specified days from announcement of judgment and would make their award within four months of having entered upon such…