P L D 2009 Lahore 442 (PLP)

UMAR ATA BANDIAL, J.

By reversing the judgment of the learned trial Court dated 111-1999, the learned appellate Court by its judgment dated 14-2-2002 has held that the respondent's suit for possession filed on 23-12-1989 was not barred by res judicata under section 11 of the C.P.C. on account of an arbitration award rendered inter partes on 8-10-1988 on the same dispute that was raised in the respondent's suit.

2. Learned counsel for the petitioner has urged that once an award has been rendered on a dispute the parties thereto cannot ignore it to start fresh legal proceedings on the same dispute. Consequently, the suit by the respondent is barred by law laid clown in section 32 of the Arbitration Act, 1940.

3. The respondent's counsel has also been heard. The argument made by the learned counsel for the petitioner is attractive and is based on the presumption that an arbitration award becomes legally effective, the moment it is rendered. However, under the Arbitration Act, 1940 (the `Act') an award acquires legal effect only when it is made a rule of Court through the procedure visualized in section 14 to section 17 of the Act. In the present case the respondent's application to make the aforesaid award a rule of Court was reject by the learned civil Court on 21-6-1989 for several defects. The respondent never challenged the legality and validity of the said finding. It is the respondent's argument that once an award is rejected for purpose of enforcement as a rule of Court, it becomes non est and ineffective. In such an event, the original cause of action that would have merged in the arbitration award, stands revived. Accordingly, after rejection of the award as a rule of Court the respondents could file a suit on their original cause of action. The submission has weight. In the present case, neither any arbitration agreement existed to block the suit nor could the arbitration award he delivered on the dispute become a bar because it had already been declared unenforceable and ineffective by the Court. Therefore, the liars under section 32 and 33 of the Act were not attracted to the case.

4. The immunity from the special bars under the Act, however, does not spare the original cause of action of the respondents/plaintiff from the ordinary legal bars to commence legal proceedings. Therefore, a fresh suit on its original cause of action would be maintainable, if it is within the prescribed limitation from the date of the respondent's cause of action. The suit was filed within 15 months of the date of the accrual of cause of action dated 3-8-1988. This suit cannot be barred under res judicata because the rejected arbitration award has been declared by the learned civil Court to be un-enforceable and, therefore, ineffective. Consequently, there is no surviving determination of the dispute between the parties that can block the respondents from seeking an effective and binding adjudication of the same dispute. Resultantly, the appellate order made in this case is correct and is affirmed on its merits as also on the direction of remand given therein.

5. Petition dismissed. H.B.T./A-69/L Petition dismissed.