Law: Arbitration Act, 1940

Section: 34

(a) Contract--Exclusive jurisdiction clause in the agreement-Cause of action---Effect--Plaintiffs filed suit for damages on the ground of violation of agreement in the Trial Court at "L" ---Defendants contested suit by raising objection about the territorial jurisdiction of the court and filed an application under O.VII, R.10, C.P.C. for return of the plaint to the jurisdiction of the courts at "K"-Contention of the plaintiffs was that defendants had submitted to the jurisdiction of the court at "L" for the reason that an application under S.34 of the Arbitration Act, 1940 was filed by them which was withdrawn later--- Plaintiffs further contended that prior to the alleged agreement, a memorandum of understanding was entered into between the parties, in which there was no exclusive jurisdiction clause-Trial Court accepted application of the defendants and returned the plaint for its presentation to the court of competent jurisdiction---Validity---Agreement and memorandum of understanding were executed at "K"-Only reason that a part of cause of action on the basis of any violation of the agreement had been accrued to the plaintiffs apart from "K", would not entitle the plaintiffs to file suit at "L"-Plaints should be bound by the stipulation of exclusive jurisdiction clause Memorandum of understanding in the law was only an understanding and executory instrument in nature; where the parties through a deliberated subsequent agreement on the same subject substituted it by adding the exclusive jurisdiction clause; memorandum of understanding should lose its relevance-Agreement between the parties was very clear and enforceable in terms provided thereunder--Appeal was dismissed by High Court. Tahir Tariq Textiles Mills (Pvt.) Ltd., through Chief Executive and 2 others v. National Development Finance Corporation 2003 CLD 1546; Chaudhry Mehtab Ahmad and another v. Mir Shakeel-ur-Rehman and 4 others 2004 MLD 662; Light Industries (Pvt.) Ltd. through Director v. Messrs ZSK Stickmaschinen GmbH and another 2007 YLR 2346 and Messrs Saudi Arabian Airlines through Sales Manager, Lahore and another v. Miss Hira Khan and another 2002 CLC 204 rel. (b) Contract--- ---Conferment…

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