Law:

Section:

(a) Civil Procedure Code (V of 1908)--- ----O. VII, R. 2 & S.151---Electronic Transaction Ordinance (LI of 2002), Ss.3 & 4---Arbitration (Protocol & Convention) Act (VI of 1937), S.3---Arbitration Act (X of 1940), S.34---Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Ordinance (XX of 2005), S. 4--Qanun-e-Shahadat (10 of 1984), Art.2(e)---Suit for recovery of amount---Defendant, according to sales contract, was to supply 1,600 M.T. steel rods, but it supplied only 500 M.T. of steel rods---Plaintiff filed suit claiming damages against defendant in respect of balance 1,100 M.T. of steel rods--Defendant filed application for stay of plaintiff's suit seeking direction from the Court to order plaintiff to refer the dispute to arbitration as the parties by the very said contract had agreed to settle all disputes by arbitration---Claim of plaintiff was that sale transaction was based on pro forma invoice, purchase order and correspondence by faxes and E.mails and that plaintiff had never entered into any sales contract containing an agreement to arbitration---Counsel for plaintiff had argued that there was no document to show that there was arbitration agreement between the parties---Validity---Defendant's counsel had rightly contended that to wriggle out of arbitration agreement, plaintiff had attached documents prior to the sales contract and not the sales contract itself which contained arbitration agreement, terms of which were accepted by plaintiff by opening a letter of credit favouring defendant in terms thereof---Plaintiff could not accept some of the terms of said contract and denied others, such as arbitration clause; plaintiff could not be allowed to blow hot and cold in the same breath---Agreement to arbitration, could also be inferred from the conduct of the parties based on exchange of correspondence---From the exchange of correspondence between parties, an agreement to refer dispute to arbitration could easily be inferred, from which plaintiff could not extricate itself---Suit was stayed and plaintiff was directed to resort to terms of sales contract for settlement of its dispute with defendant by arbitration…

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