Law: Arbitration Act, 1940

Section: 34

Arbitration Act (X of 1940)--- ----S. 34---Scope and application of S.34, Arbitration Act, 1940---Any party to an arbitration agreement or any person claiming under him if brings a civil suit against any other party to such an agreement who had in respect of the matter agreed to be so referred to arbitration, section 34 of the Arbitration Act, 1940 empowers the court taking cognizance thereof to make such reference in terms of the relevant clause of the said agreement if any party to such "legal proceedings" makes any application before a written statement is filed or any other step taken therein---Competent forum if satisfied ordinarily has to refer the matter to the arbitration on having satisfied itself that no sufficient reason exists for not making such reference in accordance with the arbitration agreement particularly when a person making such application had always been ready and willing to perform his part of the agreement at the time when such legal proceedings were initiated. THIS JUDGMENT DELIVERED BY: MUHAMMAD ASHRAF BHATTI, JUSTICE:---.--- In connection with the construction of overhead bridge at Ghari Shahu, the Lahore Development Authority (hereinafter referred as "appellant") entered into a contract with respondent No.1 regarding fulfilment of the various conditions settled between the parties. Under this contract a dispute arose between them ultimately prompting respondent No.1 to file a suit for recovery of Rs.7,53,14,100 against the appellant on 7-7-2000. In pursuance of process issued a Clerk on behalf of the appellant appeared in Court on 31-7-2000 and sought adjournment for filing written statement and then the case was fixed for hearing on 21-9-2000. Before the written statement could be filed on the aforesaid date of hearing an application was moved by the appellant in terms of section 34 of the Arbitration Act, 1940 to seek reference of the dispute to arbitration in terms of the relevant clause of the aforesaid contract dated 11-8-1997 which was contested by respondent No.1 only as on the relevant date respondent No.2 had been proceeded in ex parte and then vide order dated 22-5-2001 the learned trial Court declined the request of the…

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