P L D 1969 Karachi 109 (PLP)

This suit was filed on a foreign judgment of Her Majesty's Supreme Court of Kenya, whereby it was adjudged that the defendant‑Company do pay to the plaintiff the sum of African Shillings 2,80,340/79 with costs and interest at 6 % per annum with effect from 28th May 1963. The plaintiff has prayed for judgment and decree in the sum of Rs. 2,21,062/95 with costs and interest at the rates allowed under the rules of this Court.

2. In its written statement the defendant‑Company did not dispute the facts alleged in the plaint, but in line with the provisions of section 13, C. P. C., took the following legal objections to the maintainability of the suit:‑ (1) That Her Majesty's Supreme Court of Kenya had no jurisdiction to entertain or try the plaintiff's suit and conse quently its judgment, upon which the present suit was filed, was not pronounced by a Court of competent jurisdiction; (2) That on the face of the proceedings the foreign judgment is based on refusal to apply the law of Pakistan which was applicable to the facts in issue between the parties ; (3) That on the face of the proceedings the foreign judgment is founded on incorrect view of international law relating to (a) Jurisdiction of Municipal Courts; and (b) Applicability and relevancy of municipal laws; (4) That on the face of the proceedings the foreign judgment is based on an incorrect and incomplete view of the laws of Pakistan relating to foreign exchange and import and export trade control, with the result that Her Majesty's Supreme Court of Kenya and the Court of Appeal for Eastern Africa at Nairobi both erred in holding that the parties' contract had not frustrated; (5) That on the face of the proceedings the question of damages was not adjudicated upon merits and in any case the amount of damages awarded by the foreign Court was derogatory to the law both of Pakistan and Kenya; and (6) That on the face of the proceedings the foreign judgment is founded on a breach of the laws of Pakistan relating to foreign exchange and import and export trade control.

3. Upon the pleadings of parties the following consent issues were framed by the Court: (1) Is the foreign judgment in suit not a judgment pro nounced by a Court of competent jurisdiction? (2) Is the foreign judgment in suit on the face of the proceedings based on a refusal to apply the law of Pakistan if such law was applicable to the matters in issue between the parties? (3) Is the foreign judgment in suit on the face of the pro ceedings founded on incorrect view of international law relating to (1) jurisdiction of Municipal Courts and (b) applicability and relevancy of municipal law ? (4) Is the foreign judgment in suit on the face of the proceedings based on incorrect application of the law of Pakistan relating to foreign exchange and import and export trade control ? If so, have the trial Court and the Court of Appeal erred in holding that the contract in suit was not frustrated? (5) Is the award of damages made under the judgment in suit, on the face of the proceedings, contrary to the laws of Pakistan and also the law of Kenya? (6) Has the foreign judgment in suit not been given on the merits of the case? (7) Has plaintiff a cause of action? If so, what? (8) Is plaintiff entitled to decree? If so, in what sum?

4. When the case came up for hearing on 28th September 1967, the learned counsel for the parties agreed that no fresh evidence was required to be produced in this case, and that it should be decided only upon the documents which were brought on record by consent. In this view, the learned counsel for the parties addressed the Court in support of their respective contentions relying upon the relevant documents on record.

5. At this stage it would be expedient to briefly recall the material facts which were set out in the plaint filed in Her Majesty's Court of Kenya. That in terms of a written contract, the defendant agreed to purchase from the plaintiff 100,000 running feet on piping, of 4' diameter, at the price of Pakistani Rs. 3.00 per foot F. O. B. Mombasa. The price was to be paid in the month following after delivery. In March 1956, the plaintiff reserved shipping space for the export of these pipes to Pakistan on board "s.s. KARANJA", but the said space was cancelled at the request of the defendant‑Company. The plaintiff again reserved the required shipping space on board the same vessel in mid May 1956, but vide its cable dated 17‑5‑1956, the defen dant‑Company wrongfully refused to accept the contracted goods and thus committed a breach of its obligations. That it was an implicit term of the contract that the price of the goods was to be paid to the plaintiff at Kenya where he was obliged to deliver them on board a vessel in terms of the contract. Upon these facts the plaintiff prayed for judgment against the defendant in the sum of African Shillings 2,80,340/79 with interest at 6 % per annum which, according to him, re presented the loss which he suffered due to the auction sale of the goods as against the contract price.

6. In its written statement, the defendant‑Company alleged that the parties' contract was to be governed by the law of Pakistan and since it contravened the provision of Pakistan Foreign Exchange Regulation Act, 1947 (hereinafter called the Act), it was illegal. It further alleged that the Court at Kenya had no jurisdiction to entertain or try the suit, as at all relevant times both parties were the residents of Pakistan. It went on to allege that, according to the provisions of the Act, the contract in question could not be enforced without the prior approval of the State Bank of Pakistan (hereinafter called the Bank), and since it refused to grant the necessary permission the defendant‑Company stood absolved from performing its obligations under that contract. That the plaintiff was duly informed of this fact and was requested to extend his co operation for obtaining the said approval, but he refused. It lastly alleged that the price of the goods was to be paid at Karachi in Pakistani Rupees and the contrary allegation of the plaintiff that payment was to be made at Nairobi was incorrect.

7. Upon the pleadings of parties, the trial Court framed the following three consent issues :‑ (1) Whether the contract is frustrated under the law as applicable by this Court? (2) If not, what is the quantum of damages? (3) Has the Court jurisdiction to hear the proceedings? The trial Court answered Issue No. 1 in negative, Issue No. 3 in the affirmative and on Issue No. 2 came to the conclusion that the plaintiff was entitled to recover damages from the defendant, and accordingly adjudged in his favour. The defendant filed an appeal against that judgment in the Court of Appeal of Eastern Africa at Nairobi, but it was dismissed. In the appeal in question no challenge was made to the finding of the trial Court in regard to the award of damages and it's judgment was assailed only on two grounds:‑ (1) That the trial Court had erroneously come to the conclusion that it had jurisdiction to hear and determine the suit ; and (2) That it fell in error by holding that the parties' contract, which was to be governed by the law of Pakistan, was not frustrated, in view of the provisions of the Act.

8. Before adverting to the merits of the present suit, it would be proper to reproduce the provisions of section 13, C. P. C., which alone (as would be seen from its language) would be the guiding factor for its disposal. The section reads: "(13) A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title exception (a) where it has not been pronounced by a Court of competent jurisdiction; (b) where it has not been given on the merits of the case; (c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of Pakistan in cases in which such law is applicable; (d) where the proceedings in which the judgment was obtained are opposed to natural justice; (e) where it has been obtained by fraud; (f) where it sustains a claim founded on a breach of any law in force in Pakistan.

9. Let us now take up the various issues for considera tion to see if the defendant's objection to the foreign judgment could be sustained under any of the provisions of section 13, Civil Procedure Code.

10. Issues 1 and 3.‑The learned counsel for the parties agreed that both these issues cover the same ground and, therefore, they should be disposed of together. To begin with Mr. Fakhruddin, the learned counsel for the defendant strenuously pressed these issues, but when questioned as to how objection could now be taken to the jurisdiction of the foreign Court, when in spite of its initial protest the defendant appeared in the proceedings, filed its written statement, produced its evidence, argued the suit on merits and after the judgment was pronounced it filed an appeal against it in the Court of Appeal of Eastern Africa at Nairobi, he gave up these issues and did not press them any further. In my opinion, Mr. Fakhruddin rightly adopted that course, as once a party appears in the proceedings and pleads to the merits of the case it cannot be A heard subsequently to say that it had appeared under protest notwithstanding the fact that initially it had objected to the jurisdiction of the Court. For this conclusion reference may be made only to two judgments; one from the High Court of Calcutta and another from Madras High Court Chormal, Balchand firm, Chowrahat v. Kasturi Chand Seraojiand another (A I R 1938 Cal. 511) and V. Subramania Aiyar v. Annasami Iyer and others (A I R 1948 Mad. 203). In both these cases the defendants appeared in the proceedings under objection as to the jurisdiction of the Court, but never theless pleaded to the merits of the case. After the result went against them they took up the position that the judgment of the trial Court, in which they had appeared under protest, was illegal, but the contention was repelled. Accordingly it is held that the foreign judgment in this suit was pronounced by a Court of competent jurisdiction on a correct view of international law relating to the jurisdiction of municipal Courts notwithstanding the contrary initial objection of the defendant‑Company.

11. Issues 2 and 4.‑These issues appear to be contradictory inasmuch as Issue No. 2 assumes as if the law of Pakistan, which was applicable to the facts of the case, was refused to be applied by the foreign Court, while according to Issue No. 4, the said law was incorrectly applied. Therefore, in order to reconcile these issues attempt should first be made to find out if the law of Pakistan was really applicable to the facts of the case and if so whether the foreign Court had refused to apply it, or applied it incorrectly. In so far as Issue No. 2 was concerned, in my opinion the foreign Court had not only refused to apply the law of Pakistan, but after having elaborately considered it came to the conclusion that according to the principles of private international law the proper law of the contract was that of Kenya, with which the contract in question had the closest and real connection. Alternately, if by "refusal" to apply the law of Pakistan was meant to convey the impression that it had been incorrectly applied, then Issue No. 4, which is designed to achieve that object, would have been sufficient for that purpose. In this view of the matter, let us now examine if on the face of the proceedings the foreign judgment was arrived at as a result of the incorrect application of the provisions of the Act, which appears to be the only object of these issues. If answer to the said question was found to be in affirmative, we should next enquire whether the foreign Courts had fallen in error by holding that the parties' contract had not frustrated.

12. The scope of our enquiry, in so far as these issues are concerned, would be subject to the limitations imposed by section 13, C. P. C. According to the section " a foreign judgment shall be conclusive as to any matter thereby direc tly adjudicated upon between the same parties", which leaves no room for doubt that the words "any matter" would include all questions of facts and law. However, the con clusiveness or a foreign judgment can be questioned in this Court under any one of the provisions contained in subsections (a) to (f) of section 13, C. P. C., out of which the learned counsel for the defendant invoked the aid of subsections (c) and (f) to show that the foreign judgment in question was not conclusive.

13. In order that the conclusiveness of a foreign judgment could be successfully questioned the requirement of subsection (c) was that it must be shown that on the face of the proceedings, and not by elaborate arguments addressed at the Bar, it appeared to have been founded on an incorrect view of international law or on a refusal to recognise the law of Pakistan in case it was applicable. In so far as subsection (f) was concerned, the position was somewhat different inasmuch as according to its requirement it must be shown that the foreign judgment sustained a claim which was founded on a breach of any law in force in Pakistan. In this view, Issue No. 4, which con templated an enquiry into the incorrect application of the law of Pakistan, appeared to be misconceived. Consequently, the question whether the parties' contract had frustrated, with the result that the foreign suit could not have been filed, has to be determined in the background indicated above.

14. As pointed out earlier the defendant in its written statement, filed before the foreign Court, had taken a number of pleas relating to the maintainability of the suit, the jurisdic tion of the foreign Court and the frustration of the contract on the ground that since it was subject to the law of Pakistan and it contravened the provisions of the Act, it was illegal. The foreign Court considered these pleas under Issues 1 and 3 and held against the defendant. It has substantially taken the same defence in the present suit.

15. Mr. Fakhruddin, the learned counsel for the defendant argued that the judgment of the foreign Court, on the face of the proceedings, was founded on incorrect view of the interna tional law inasmuch as instead of holding that the parties' contract was governed by the law of Pakistan, it erroneously came to the contrary conclusion and held that it was governed by the law of Kenya. In support of that contention, the learned counsel referred to the correspondence of the parties and to Exh. 31/A, which largely set out the terms of the contract, and argued that the substantial terms of the contract, namely its execution, the payment of price, the delivery of the goods and the right of their rejection, in case they were not found to correspond with the sample, having been performed or agreed to be performed in Pakistan, the foreign Court was bound to hold that the parties' contract was governed by the law of Kenya. In this view, according to the learned counsel, the foreign Court, upon an incorrect view of the principles of international law, had refused to apply the law of Pakistan, and consequently its judgment could not furnish any basis for the present suit. The trial Court and the Court of Appeal of Eastern Africa at Nairobi both had elaborately considered this objection and repelled it on the ground that in terms of the contract the delivery of the goods was to be made "F. O. B. Mombasa", and since the defendant, through its cable received at Kenya, had wrongfully repudiated the contract, the law of Kenya was attracted to the consequences of that breach and, therefore, Her Majesty's Court at Kenya had the jurisdiction to en tertain and try the suit. In other words, as to the choice of proper law, which applied to the contract in question, both Courts came to the conclusion that it depended not so much on the place where the contract was made or on the intention of the parties as on the place with which it had the most substantial connection. For that conclusion the trial Court relied upon Booissevain v. Weil ((1949) 1 All E R 153) and Debono v. Benaim 8t Co. (1924 A C 514). The Court of Appeal at Nairobi further relied upon Chatenay v. Brazilian Submarine Telegraph Company (1891 Q B D 79 at p. 82). In all these judgments the view taken was that if certain obligations, arising out of a contract, were partly to be performed in one country and partly in another, then it must be presumed that the parties intended to carry out those obligations according to the laws of the respective countries unless there appeared good reason to the contrary.

16. Let us now examine if the foreign Courts had correctly applied the principles of these judgments to the facts of this case. There was no dispute that the contract in question was executed at Karachi, and according to its terms the goods were to be delivered on board a vessel "F. O. B. Mombasa". It was also an admitted position that the defendant had agreed to pay the freight of the goods at Kenya, where the breach of the contract had finally taken place in view of the defendants' cable to the plaintiff repudiating their obligations. In this view, it cannot be denied that a substantial part of the contract (i.e., in so far as its performance was concerned) was to be governed by the law of Kenya with which it had the closest connection. Con sequently, the conclusions of both the foreign Courts, as to the choice of proper law applicable to the contract, with respect appear to be proper, as they were founded on a correct view of international law. In fact, the Privy Council case of Debono v. Benaim & Co. appeared to be fully applicable to the facts of this case, the relevant observations of which appear on page 520 of the judgment and which may be reproduced: "No doubt this contract should be regarded as made in Malta‑for thence came the final acceptance by the respondent of the offer made by the appellants. But it appears to their Lordships to be plain upon the face of the documents that the contract was to be performed by the delivery of the goods on board a ship at Gibralter selected by the respondent ; from the moment of such delivery the appellants had no further control over the goods and had parted with their possession of property in turn." The facts of that case were more or less the same as the facts in the present case. In that case the contract had been arrived at between the appellants in Gibralter and the respondents in Malta by the exchange of letters and telegrams whereby the appellants sold to the respondents anchovies F. O. B. Gibralter. Upon the goods arriving in Malta, the respondents complained of their quality, but without attempting to reject them sold them away and claimed an allowance for shortages. After having refused to accept the goods the respondents claimed to rescind the contract and brought an action against the appellants in Malta. The trial Court came to the conclusion that the goods were defective in quality and applying the law of Malta held that the respondents had a right to rescind the contract and to recover from the appellants the price together with the sums paid for freight and insurance. An appeal was taken from that judgment to the Privy Council and the same was allowed with the aforesaid observations. It is true that the judgment of the trial Court was set aside on another ground also, namely that the respondent having dealt with the goods in a manner which was inconsistent with the ownership of the sellers, could not rescind the contract, but upon one of the terms of the Contract "F. O. B. Gibralter" their Lordships independently came to the conclusion that the contract was to be performed by the delivery of goods on board the ship at Gibralter and from the moment the delivery was made the appellant would have no further control over the goods, as they would have then parted with their pos6ession. Their Lordships quoted with approval the following passage from Dicey's Conflict of Laws, 3rd Edn., p. 609 "When the contract is made in one country, and is to be performed either wholly or partly in another, then the proper law of the contract, especially as to the mode of performance, may be presumed to be the law of the country where the performance is to take place (lex loci solutions)."

17. It appears that in spite of a great deal research including certain departures from this view, as pointed out by the learned counsel for the defendant, the principles stated in the aforesaid judgment of the Privy Council were authoritatively approved and restated by the House of Lords in the case of United Railways of Havana and Regla Warehouses. Ltd., (1961 A C 1007) where Lord Simonds described the proper law as "the system of law by reference to which the contract was made or that with which the transaction has the closest and most real connexion". In the celebrated case of Assunzione ((1954) 1 All E R 278) the Court of Appeal also came to the same con clusion. Reference may be made to the judgment of Singleton, L. J., who after considering considerable case‑law on the subject came to the conclusion that: "Then the Court has to determine for the parties what is the proper law which, as just and reasonable persons they ought to have intended if they had thought about the question when they made the contract. That, I believe, is the duty upon us, and in seeing to determine the question we must have regard to the terms of the contract, the situation of the parties, and generally all the surrounding facts." Cheshire at page 189 of the 7th Edition of his book "Private International Law" interpreted the said views of Singleton, L. J. thus: "In other words, where it has not been expressly chosen, the proper law depends upon the localization of the contract. The Court imputes to the parties an intention to stand by the legal system which, having regard to the incidence of the connecting factors and of the circumstances generally, the contract appears most properly to belong. In short, the proper law, as Westlake stressed, is the legal system with which the contract has the closest and most substantial con nexion."

18. In this view of the weighty pronouncements upon the subject as to the choice of proper law of a contract, no exception could be taken to the foreign judgment, which appeared to have been arrived at on a correct view of the principles of international law. Therefore, with respect I agree with the conclusions of the foreign Courts that the contract in question was governed by the law of Kenya with whose legal system it had the closest and most substantial connexion.

19. The next question under these issues, which still required to be considered, was as to whether that part of the contract in question, which was governed by the law of Pakistan. stood frustrated after the Bank refused to grant the required import licence to the defendant for the import of goods into the country. In this respect, Mr. Fakhruddin, the learned counsel for the defendant relied upon the provisions of section 5 (1) (a) and section 21 of the Act, which for the sake of convenience may be reproduced "5.‑(1) Save as may be provided in and in accordance with any general or special exemption from the provisions of the subsection which may be granted conditionally or unconditionally by (The State Bank), no person in, or resident in (the Provinces and the capital of the Federation) shall‑ (a) make any payment to or for the credit of any person resident (outside Pakistan) ; . . . ." 21.‑(1) No person shall enter into any contract or agree ment which would directly or indirectly evade or avoid in any way the operation of any provision of this Act or of any rule, direction or order made thereunder. (2) Any provision of, or having effect under, this Act that a thing shall not be done without the permission of the Central Government or (the State Bank) shall not render invalid any agreement by any person to do that thing, if it is a term of the agreement that that thing shall not be done unless permission is granted by the Central Government or (the State Bank), as the case may be ; and it shall be an implied term of every contract governed by the law of any part of (the Provinces and the Capital of the Federation) that any thing agreed to be done by any terms of that contract which is prohibited to be done by or under any of the provisions of this Act except with the permission of the Central Government or (the State Bank) shall not be done unless such permission is granted. (3) Neither the provisions of this Act nor any term (whether expressed or implied) contained in any contract that anything for which the permission of the Central Government or (the State Bank) is required by the said provisions shall not be done without that permission, shall prevent legal proceedings being brought in (the Provinces and the Capital of the Federation) to recover any sum which, apart from the said provisions and any such term, would be due, whether as a debt, damages or otherwise, but‑ (a) the said provisions shall apply to sums required to be paid by any judgment or order of any Court as they apply in relation to other sums ; and (b) no steps shall be taken for the purpose of enforcing any judgment or order for the payment of any sum to which the said provisions apply except as respects so much thereof as the Central Government or (the State Bank), as the case may be, may permit to be paid ; and (c) for the purpose of considering whether or not to grant such permission, the Central Government or (the State Bank), as the case may be, may require the person entitled to the benefit of the judgment or order and the debtor under the judgment or order, to produce such documents and to give such information as may be specified in the requirement. (4) Notwithstanding anything in the Negotiable Instruments Act, 1881, neither the provisions of this Act or of any rule, direction or order made thereunder, nor any condition, whether express or to be implied having regard to those provisions, that any payment shall not be made without permission under this Act, shall be deemed to prevent any instrument being a bill of exchange of promissory note." It would be seen that the provisions of subsection (1) (a) of section 5 do not in terms invalidate the parties' contract, but it only prohibits the payment of any amount to or for the credit of any person, who is a resident outside Pakistan. It is true that according to the provisions of section 21 (1) no contract is permitted to be entered into which was designed to evade or avoid the operation of any provisions of the Act but subsection (2) and subsection (3) of that section do not in any way invalidate the contract. In fact, the provisions of subsection (2) expressly saves all contracts, which have been entered into without the prior permission of the Central Government or the State Bank of Pakistan from becoming invalid upon which even legal proceedings can be brought in the Courts of Pakistan for the recovery of debts, damages or other wise. The only embargo placed upon the rights of a foreigner was that in case he was to succeed in obtaining a decree in this country no execution proceedings can be launched for the recovery of the decretal amount except with the prior permission of the Central Government or the Bank. In fact, according to the provisions of subsection (c) the Central Government or the Bank in appropriate cases could grant permission for the enforcement of the decree and the payment of money which was due under that decree. In this view, it was not understandable as to how exception could be taken by the defendant that the contract in question was illegal. Mr. Fakhruddin, the learned counsel for the defendant had to agree that the contract was perfectly legal and that if the Plaintiffs were to succeed in obtaining a decree in these proceedings they might be able to enforce it after obtaining the permission of the Central Government or the State Bank of Pakistan.

20. The last contention of Mr. Fakhruddin was that the defendant had sincerely made efforts for obtaining an import licence from the Bank, which was refused, and consequently the contract stood frustrated and the defendant absolved from any liability. In support of that contention he referred to Noti fication No. 335‑260/24, dated the 12th of June 1951, issued under section 3 of the Import Export Act, 1950 according to which no goods could be brought into the country without an import permit. The contention was misconceived, as under Exception XIII of that Notification a permit could be granted by the Authorities in appropriate cases.

21. Upon this aspect of the case, Mr. Jimmy Fancy, who was examined on commission on behalf of the defendant, admitted in cross‑examination that no foreign exchange was involved in obtaining import permit as against an import licence which necessarily involved transaction in foreign exchange. He further admitted that the import permit was to be issued by the Import and Export Authorities who were not approached by the defendant for that purpose. He alleged that even after the obtaining of import permit ; the final authority still rested with the Bank and, therefore, instead of trying to obtain an import permit he directly approached the Bank, who refused to grant the necessary permission. In this view, according to him, there was no need to approach the Import and Export Authorities.

22. After having considered the defence plea, in light of the Act, both foreign Courts came to the conclusion that the defendant had committed a breach of the contract, to which part the law of Kenya applied, and consequently he was liable to pay damages to the plaintiff. In support of that conclusion the learned trial Court relied on a judgment Brauer & Co. v. James Clark ((1952) 2 All E R 497) where at page 500 Singleton, L. J. held: "Had the sellers shown that they had taken all reasonable steps to obtain an Export Licence and had failed, that would have been an answer." Likewise, Denning L. J. at page 501 observed thus "It is I think clearly the duty of the sellers to apply for an export licence and to use due diligence and take all steps to get it." The facts in that case were that the parties contract was "subject to any Brazilian Export Licence". Upon a refusal to export the contracted goods, when a suit was brought for the recovery of damages the defence taken was that the contract was frustrated as, according to the law of Brazil, no goods could be exported without Export permit. That contention was repelled by the aforesaid observations on that ground that the exporter had failed to prove that he had taken reasonable steps to obtain the required Export permit.

23. In the instant case admittedly the defendant‑Company did not make any attempt to obtain an import permit from the Import Export Authorities, but instead approached the Bank for that purpose and that too for the first time on 5th July 1956, when they had already repudiated their contract. In this view the principles enunciated in the aforesaid judgments fully applied to the facts of this case, and consequently the conclusion becomes irresistible that the defendant‑Company had committed a breach of their contract by having failed to make even an attempt to secure the required permit from appropriate authorities.

24. Even factually the evidence of Mr. Farooqi, an Inspector of Foreign Exchange Control Branch of the State Bank of Pakistan went against the contention of the defendant. He clearly stated that the State Bank may allow payments to foreign residents in case it was satisfied that such payments did not involve any remittance of foreign exchange. He further stated that even the remittance of foreign exchange could be allowed against an import licence if it was produced before the State Bank, notwithstanding the contrary clause contained in Exh. 33, that payment was to be made in Pakistani Rupees. According to him, the State Bank of Pakistan does not demand the copy of the contract at the time it allows remittance of foreign exchange. He lastly stated that the import licence issued by the Chief Controller of Imports and Exports invariably carries the right to remittance of foreign exchange. In this view of the evidence of the defendant‑Company, to my mind no exception could be taken to the foreign judgment which not only on the face of the proceedings, but as a matter of deliberate consideration appeared to be fully in accord wit the principles of international law. Consequently, the contention of the defendant that the law of Pakistan, which was applicable to the contract, was refused to be applied by the foreign Court or that the contract stood frustrated appeared to be wholly devoid of force. These issues are answered accordingly.

25. Issue No. 5.‑This issue need not detain us any longer for the simple reason that after the judgment of the trial Court was passed, the defendant‑Company went in appeal before the Appellate Court of Eastern Africa at Nairobi, but made no grievance of the award of damages by the trial Court. In this view when Mr. Fakhruddin, the learned counsel for the defendant was asked as to how the same point could be re‑agitated in these proceedings, he frankly conceded that he could not support it by reference to any law. In any case, no exception could be taken to the said finding, as the amount of damages was awarded on the basis difference between the contract price of the goods and their sale price. The plaintiff had produced the auctioner through whom the goods were sold, and he confirmed the price which they had fetched on account of auction sale. Under the circumstances, the amount of damages awarded to the plaintiff appeared to be reasonable and they cannot be said to be substantially dispro portionate to what the plaintiff would have been entitled under the law of Pakistan. Accordingly, the issue is answered in the negative.

26. Issues No. 6 and 7.‑Mr. Fakhruddin, the learned counsel for the defendant did not address any arguments on this issue and quite rightly for the reason that the judgment of the foreign Court was given on merits in all respects, and consequently this issue did not arise. Therefore, in view of the discussion on the preceding issues, the plaintiff did have the cause of action for the filing of this suit.

27. Issue No. 8.‑In view of the preceding conclusions, the plaintiff is clearly entitled to a decree in the suit sum as prayed. Since no objection was taken to the rate of conversion from African Shillings into Pakistani Rupees, it must be presum ed that the figure of Rs. 2,21,062‑95, as mentioned in the plaint, was correct and consequently the suit is decreed in terms with costs and interest at the rate permissible under the rules of this Court. However, the plaintiff would not be permitted to execute the decree in question unless he was to succeed in obtaining the prior permission of the Central Government or the Bank in terms of the requirements of section 21 (c) of the Act. A. E. Suit decreed.