2004 PLP 1708 (MLD)

The facts relevant to this order are that Peoples Steels Mills Ltd. Jawaidan Nagar, Mangopir, Karachi (hereinafter referred to as "the applicant") assigned various works to Messrs Asian Consul Engineers (Pvt.) Ltd., Karachi (hereinafter referred to as "the respondent"). The contract documents consisted of: (1) general condition of contract "Part-1 (GCC-1)(2) general conditions of contract "Part-II (GCC-II). A dispute arose between the parties in respect of the cost/price of re-factory brick lining work carried out on the floor of teeming plate for pursuant to the provisions of GCC-I the parties appointed their own respective arbitrators who entered upon the reference. Since the arbitrators recorded spite award the matter was finally referred to the Umpire for its decision.

2. After permitting the parties to produce their evidence the Umpire gave award of 17 lacs in favour of the respondent on 2-6-1998. He (Umpire) submitted same before this Court under section 14 of the Arbitration Act.

3. After service of notice upon it the applicant filed objections to the award by way of an application under sections 16 and 31 of the Arbitration Act. On 10-3-1999, when the objections came up for hearing they were dismissed for non-prosecution and the award was made rule of the Court. The order was impugned through Appeal No.246 of 1999 and a Division Bench of this Court set it aside on 11-1-2000. The matter was remanded for scrutinizing the award in accordance with the law.

4. When the matter was still pending Sindh Civil Court (Amendments) Ordinance, 2002 was promulgated and the pecuniary jurisdiction of Civil Judges was enhanced. By the same amendment the cases/proceedings the subject-matter whereof was valued less than 30 Lacs, were transferred to the concerned "District Judges for disposal. Consequently, the reference filed by Umpire being (Suit No.68 of 1998) also stood transferred. The District Judge, Karachi (West assigned it new number 80/2003 and making it over to the IV Senior Civil Judge, Karachi (West). That Court, after hearing the parties, dismissed the objections against the award and made it rule of the Court on 28-5-2003. The applicant attacked the order and decree through Appeal No.169 of 2003 presently pending before 3rd Additional District Judge, Karachi (West).

5. During pendency of the appeal the applicant filed an application under section 31 of the Arbitration Act, 1940 pleading that the order and decree passed by the learned Senior Civil Judge be set aside as it was the High Court only which could take decision upon the objections to the award. He referred to section 31(2), (3) and (4) of the Arbitration Act. The learned 3rd Additional District Judge, Karachi (West), dismissed that application on 15-9-2003 which order has been assailed through present revision application.

6. Mr. Zahid Hamid contended that although the High Court was exercising jurisdiction over the reference in present case as Civil Court with original jurisdiction and after enhancement in the pecuniary jurisdiction of Civil Judges and District Judges by Civil Court (Amendment) Ordinance, 2002 upto three millions the suits and proceedings of the value not exceeding three million pending in the High Court stood transferred under the same Ordinance yet the reference in present matter was to remain there i.e. High Court. According to him subsections (3) and (4) of section 31, Arbitration Act put absolute bar upon the hearing of applicant/objections raised to the award by any Court other than one where the award had been filed. In support of his contention the learned Advocate referred to the decision of this Court in Umer Khan's case reported in (2002 CLC 492).

7. Mr. Aftab All Khan the learned Advocate for the respondent defended the impugned order arguing that the scheme of subsections (3) and (4) of section 31 of the Arbitration Act is that the applications relating to the arbitration proceedings shall be made to and decided by one Court rather same Court. According to him, the award was filed in this Court as Court of original civil jurisdiction having the pecuniary jurisdiction over the matter, therefore, t entertained the same and objections thereto for consideration. However, after amendment in the Civil Court Ordinance, 1962 whereby the pecuniary jurisdiction of Civil Judges was enhanced upto three million and the cases the value of the subject-matter whereas was upto three million were transferred to those Courts thereafter those Courts took place of this Court, and are the same Courts for all the purposes.

8. For proper appreciation of the contentions the subsections of section 31 of the Arbitration Act are to be examined thoroughly. They are reproduced below:

31. Jurisdiction.- (1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates. (2) Notwithstanding anything containing in any other law for the time being in force and save as otherwise provide in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be filed, and by no other Court. (3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been, or may be, filed, and to no other Court. (4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court."

9. The examination of the above subsections brings out that the award is to be filed in a Court having jurisdiction in the matter to which the reference relates. Thereafter, all questions regarding the arbitration agreement, the conduct of arbitration proceedings and the validity, effect or existence of award are to be brought before and decided by the same IA Court.

10. Now, it is to be seen as to which is the same Court. If at the time of filing of the award and any of the applications relating to its validity or effect one Court has a jurisdiction in the matter and during pendency of those applications it has been replaced by another Court then the successor Court is considered as same Court and not a different one. To make it more clear, it will be proper to say that the principal question to be kept in view is the jurisdiction and not the Court by itself. Under subsection (1) of section 31 of the Arbitration Act the award is to be filed before a Court having jurisdiction in the matter to which the reference relates. If the jurisdiction at the time of reference is with Court A but after sometime it is vested in the Court B the latter B would be the Court having jurisdiction in the changed situation therefore, it is deemed to be the same Court. Thus after the raise in the pecuniary limits of the jurisdiction of Senior Civil Judge upto three millions he took the place of this Court and was its successor to the extent of that limit. Therefore, it was the same Court. The result is that the transfer of the proceedings under the Arbitration Act from this Court to the learned District Judge and the decision recorded by the Senior Civil Judge to whom they were assigned by the learned District Judge were not without jurisdiction.

11. The pronouncement of this Court in the case of Umer Khan (supra) referred to by the applicant's learned Advocate is not helpful to him in the circumstances. Firstly the main question involved in that case was the original territorial jurisdiction with the High Court for entertaining an application under section 20 of the Arbitration Act. After holding that the cause of action had accrued in the limits of Karachi District and as such within the territorial jurisdiction of this Court the objections relating to it was repelled. For same reason the arguments about statutory transfer of the proceedings under Article 4(3) of P.O. VI of 1976 of the Establishment of Balochistan High Court were also repelled as the jurisdiction exercised by this Court over the matter was not the original jurisdiction of the High Court referred to in the Article of P.O. But was the Civil Court original jurisdiction wherein cause of action had accrued within the limits of Karachi District. Additionally, it was also held that objection as to the territorial jurisdiction was not entertainable in the light of section 21, C .P .C.

12. Before parting with the order, I must express that the question of jurisdiction of the original Court which made the award rule of Court should have been decided together with the other points raised in the appeal instead of taking up it separately. Such practice cannot beapproved. It has resulted in delaying the conclusion of the matter and dragging the parties unnecessarily. Above are the reasons for short order whereby the revision was dismissed on 17-2-2004. M.H./P-6/K Revision dismissed.