1984 PLP 553 (SCMR)

SHAFIUR RAHMAN, J.‑These ten civil appeals arise out of the proceedings, pending before the Civil Judge, 1st class Faisalabad, on five separate applica tions filed under section 5 of the Arbitration (Protocol and Convention) Act of 193 , by European Grain & Shipping Limited (hereinafter referred to as the petitioner/appellant) against Messrs Sargodha Oil Industries Limited (here inafter referred to as the respondent/appellant). The petitioner/appellant is a company incorporated under the laws of England while the respondent/appellant is a company incorporated under the Companies Act, 1913, carrying on business at Faisalabad in Pakistan. In the year 1973, the parties entered into six separate contracts whereby the respondent/appellant agreed to supply to the petitioner/appellant rapeseed solvent. As there was allegedly a failure on the part of the respondent/ appellant to fulfill its obligations under the contract and dispute arose it was referred to arbitration of the Grains and Feed Trade Association Limited, London in England, as was provided in the contracts itself. The reference was decided m favour of the petitioner/appellant and six awards were given disposing of the dispute, The respondent /appellant, thereafter, filed appeals before the Board of Appeal of the Grains and Feed Trade Association. The awards were maintained in four cases, one award was modified and one was set aside. Equipped with the five foreign awards in its favour the petitioner! appellant filed five applications on 15‑9‑1978 in the Civil Court, Faisalabad, for getting the awards filed in Court. The applications were contested by the respondent/appellant and the following 17 issues were framed on the applications and the replies :‑‑ (1) Whether the provision of Arbitration (Protocol and Convention) Act, 1937, are not applicable to the present case ? O. P. P. (2) Whether the Act of 1937 referred in issue No. 1 above is no longer a good law ? O. P. P. (3) Whether Pakistan is not a signatory to the convention of 1958 and as such, the award can be enforced m Pakistan ? O. P. P. (4) Whether the award can be enforced in Pakistan ? O. P. P. (5) Whether the amount of award, which is in dollars cannot be permitted to be converted into Pakistan currency ? O. P. P. (6) Whether the award does not qualify the terms of foreign award, if so to what effect ? O. P. P. (7) Whether the arbitrators have misconducted themselves, if so to what effect ? O. P.' R. (8) Whether the Board of appeal has also acted illegally and the decision of the Board of Appeal is of no legal consequence ? O. P. R. (9) Whether the petition is within time ? O. P. R. (10) Whether the petition has not been correctly valued for the purpose of court‑fee, if so what is the correct fee ? O. P. R. (11) Whether the petition in its present form is not maintainable ? O. P. R. (12) Whether this Court has no jurisdiction to try this petition? O. P. P. (13) Whether the petition has not been properly presented and instituted ? O. P. P. (14) Whether the petitioner has no cause of action and locus stand to bring the petition ? O. P. R. (15) Whether the respondent has been improperly described and has been so improperly described intentionally, if so, to what effect? O. P. R. (16) Whether the award is illegal and void ? O. P. R. (17) Relief. Additional issue. If issue No. 16 is answered in negative, then whether the petitioner is entitled for the relief claimed ? O. P. P." At the stage of evidence an application was moved by the respondent/ appellant on 19‑7‑1978 for examining two witnesses on commission as they were outside Pakistan Another application was moved by the petitioner/ appellant on 25‑7‑1978, praying that the respondent/appellant be directed to confine his evidence within the ambit of sections 7 and 8 of the Arbitration (Protocol and Convention) Act of 1937. Both these applications came to be disposed of by one order by the learned Civil Judge 1st Class, Faisalabad, on 23‑9‑1973. The order passed by trial Court concluded as follows:‑ "In this view of the matter, the application dated 25‑7‑1978, moved on behalf of the petitioner is hereby accepted and the respondent is directed to confine his evidence within the ambit of the provisions of sections 7 and 8 of the Act No. VI of 1937 and the application dated 19‑7‑1978 of the respondent seeking the examination of his two witnesses on commission is hereby disallowed. The respondent will, however, at liberty to produce these witnesses in the Court and examine them touching any matter but which may be relevant under sections 7 and 8 of the Act referred to above. Since the application dated 18‑7‑1978 moved on behalf of the respondent witnesses which were resident of Pakistan have been allowed to be summoned. The respondent shall produce them on his own responsibility and is directed to obtain personally summons for their services against pay ment of expenses of process fee (if may not already done) and produce them in the Court. At the time of tendering their evidence if their evidence does not strictly conform to the provisions of sections 7 and 8 of the Act referred to above, an objection can be taken and will be decided than accordingly." Aggrieved by this order the respondent/appellant filed five civil revision petitions in the High Court which were allowed on 22‑11‑1978, holding as follows:

"The learned trial Court also should not have, on the basis of a miscellaneous application, gone into the question of the applicability of the 1940 Act to the proceedings before it because if the 1940 Act is held to be inapplicable to these proceedings it would imply (in view of the provision of section 47 thereof) that even if the 1940 Act is not applicable, the 1937 Act is applicable to the arbitration matter before the trial Court. Thus, the recording of such a finding will have the effect of prejudging the main case on issues Nos. 1 and 2. 1, therefore, refrain from giving any finding on the question relating to the applicability of the said two Acts, which shall be decided by the trial Court while disposing of the main case. The opinion already expressed by the learned Civil Judge in this regard appears to be of tentative nature and there will be no bar to his taking a different view if, after hearing the entire case before him, he is inclined to do so. "In the result, I accept the revision petition and direct that the trial Court shall allow the parties to lead evidence on issues Nos. 7 and 8 as framed by it. Thereafter, while giving a final verdict in the case, the trial Court will first determine as to what laws will apply to the arbitration matter before it had after recording a finding in this behalf it will make use of the evidence in so far as it will be necessary for the purpose of deciding the aforesaid matter." During the proceedings before the Civil Judge applications were submitted on behalf of the respondent/appellant for examining the witnesses who were outside the country by issuing interrogatories. The learned Civil Judge disposed of these applications by passing the following orders :‑ "I cannot allow such a request to the petitioner and as I have already ordered that he should produce these witnesses in the Court himself. Even his Lordship, speaking with great respect, has in the original order observed, as stated above that "he should start making the arrangement for summoning his witnesses from England if he is so, advised." As such the application is hereby rejected. The petitioner summoning his witnesses from England. The application, is dismissed in limine. Against this order refusing interrogatories five civil revision petitions were filed by the respondent/appellant which were dismissed by the learned Judge in the High Court on 25‑ 0‑1978, on the ground that such an order could be challenged finally after the disposal of the case if the respondent/appellant felt it necessary then to do so. By five separate petition the petitioner/appellant sought leave to appeal against the revision orders of the High Court dated 22‑11‑1978, whereby the orders of the Civil Judge dated 23‑9‑1978 were set aside and the respon dent/appellant was permitted to produce its evidence on the misconduct of the arbitrator while the respondents/appellant by five separate petitions sought leave to appeal against the High Courts revisional orders dated 25‑10‑1978, whereby their revision petition challenging the refusal of the interrogatories were dismissed in limine. Leave to appeal was granted by this Court on 12‑6‑1982, in the five petitions filed by the petitioner/appellant and in five others filed by respondent/appellant in the following words :‑ "Leave is therefore granted to consider whether in such a case the only evidence that can be recorded against the enforcement of a foreign award are that which relate to providing all or any of the grounds mentioned in section 7 (1) and section 7 (2) of the Arbitration (Protocol and Convention) Act of 1937 ; whether evidence relating to misconduct in proceedings under Act of 1937 can only be confined to that kind of misconduct by the Arbitrators which is also regarded as breach of rules of natural Justice by the said Arbitrators in the Arbitration proceedings and not `misconduct' of general nature envisaged under section 30 of the Arbitration Act of 1940. Whether it is not the duty of the Court to first determine which evidence is relevant in the case, before it is recorded and that the question of the relevancy of evidence in a case cannot be left to be decided at the final stage in view of the provisions of section 136 of the Evidence Act, 1872 ; and finally whether the Arbi tration Act of 1937, being a Special Statute relating to enforcement of foreign award, will not prevail over the Arbitration Act, 1940, which is a General Act relating to Arbitrations and awards arising there from." Learned counsel for the petitioner/appellant has taken us through the law, namely, Arbitration (Protocol and Convention) Act, 1937 and the Arbi tration Act of 1940 and the case‑law on the subject contained in L. Oppenheim & Company v. Haji Mahomed Haneef Saheb (AIR 1922 P C 120 ), Nan Fung Textiles Ltd. v. H. Pir Muhammad Shamsuddin (P L D 1979 Kar. 762), Nan Fung Textile Limited v. Sadiq Traders Limited (P L D 1982 Kar. 619) and G. M. Pfaff A. G. v. Sartaj Engineering Co. Ltd., Lahore and others (P L D 1970 Lah. 184). He contended that the order passed by the learned Civil Judge on 23‑9‑1978 with regard to the ambit of the proceedings and its own jurisdiction was correct on merits and it was not liable to interference in the revisional jurisdiction. He has also drawn our attention to the delay that has taken place and the nature of the controversy involved. His effort has been to get a decision on merits of the controversy as was given by the Civil Judge by his order dated 23‑9‑1978. The learned counsel for the respondent/appellant, on the other hand contended, that as pointed out before the High Court in revision petition material and fundamental objections to the very competence and validity of the application had been raised. Issues reflecting these objections had been framed. Even the High Court observed that "the learned counsel has rightly pointed out, the learned Judge at some places used such language that a genuine apprehension has been entertained by the petitioner that his evidence on vital issues which have already been framed has been shut out once for all." The High Court further held that the trial Court "has yet to decide issues Nos. I and 2" and "the recording of such a finding will have the effect of prejudging the main case on issues Nos. I and 2." It is contended that by recording on a miscellaneous application determinative finding decid ing the material legal and jurisdictional is without consciously adverting to them, the trial Court committed a material irregularity to the serious prejudice of the respondent/appellant. Even within the confines of sections 7 and 8 of the Arbitration (Protocol and Convention) Act, 1937 such evidence as was sought to be produced by the respondent/appellant was admissible. Clause (c) of section 7 of the Arbitration (Protocol and Convention) Act, 193 7 makes it a condition precedent for the enforcement of foreign award that "it must have been made in conformity with the law governing the Arbitration Procedure". The respondent/appellant wanted to show through these witnesses that the tests prescribed in section 23 of the Arbitration Act, 1950 (14 Deo 6 Ch. 27) an Act passed by the Parliament of United Kingdom remained unsatisfied. The learned counsel for the respondent/appellant how ever conceded that if the legal jurisdictional issues taken up first as was the object of the applications of the petitioner/appellant, his own request for examining the witnesses who are abroad can follow such decision. After hearing the learned counsel for the parties, we find that it is not necessary for us to decide at this stage in these proceedings the merits of the controversy, inter aria for the reason that the High Court itself has not dealt with the merits or recorded a determinative finding on the questions raised before it. Even the trial Court has not consciously decided so far the legal and jurisdictional issues framed in the proceedings touching the con troversy. Yet it dealt with these matters and decided them in positive and unequivocal terms while dealing with question of relevancy of the evidence proposed to be produced, when disposing of two miscellaneous applications. Such disposal was taken by the High Court so far as the issues awaiting disposal are concerned to be only a tentative finding not affecting the future disposal of these issues. From the anxiety of the learned counsel of the petitioner/appellant to obtain a decision on such legal and jurisdictional issues first we only understand that he sought the disposal of these issues first so as to channelize and contain the pending proceedings. The learned counsel for the petitioner/appellant considers that in fact by such disposal of his applications, the trial Court in fact decided these legal jurisdictional issues and it would according to him be a fetish of a technicality to contend that these issues did not stand disposed of by such an order. That is not what the trial Court itself either expressed or intended but accomplished neverthe less though by implication. The application dated 25‑7‑1978 filed by petitioner /appellant could be disposed of either solely by reference to issues framed in the proceedings or after recording a determinative finding on such of the legal and jurisdictional issues as could be disposed of without recording any oral evidence. The trial Court did neither. For these reasons while accepting all these appeals we set aside the impugned orders of the High Court and also of the trial Court dated 23‑9‑1978 and 17‑10‑1978 and in partial modification of the High Court orders direct that first the legal and jurisdictional issues, as would not require the recording of oral evidence should be decided and thereafter the relevance and necessity and the manner of recording of the evidence proposed to be led by the parties should be adjudged in the light of decision on such legal and jurisdictional issues. As the proceedings have already been inordinately delayed in spite of concern and anxiety on the part of everyone dealing with them to ensure their early disposal, the trial Court shall give it due attention. No order as to costs. S. Q. Order accordingly.