2014 PLP 411 (CLD)

AMIN-UD-DIN KHAN, J.

Through this appeal the appellant-defendant has challenged the order dated 3-7-2010 passed by the learned Civil Judge, Lahore, whereby an application under section 34 of the Arbitration Act, 1940 seeking stay of the proceeding in a suit for recovery of damages and compensation was dismissed.

2. Learned counsel for both the parties have agreed that this appeal can be decided without the original record of the suit as the certified copies of complete record are available on the file of the appeal. Therefore, on their request the case is being heard.

3. Learned counsel for the appellant argues that no steps were taken before filing of the application under section 34 of Arbitration Act 1940 for the stay of the proceedings, therefore, states that the application was rightly filed before any further steps in the proceedings of the suit. He while relying upon cases titled Kh. Muhammad Aslam v. Ch. Aftab Ahmad and 4 others (1992 MLD 60), Muhammad Idris and others v. Tobarak Hossain (PLD 1965 Dacca 260), The Province of the Punjab v. Messrs Irfan & Co. (PLD 1956 (W.P) Lahore 442) and Rachappa Gurduadappa Bijapur v. Gurusiddappa Nuraniappa and others (1990 MLD 1383) argues that the order of dismissal of his application which is impugned in this appeal is against the law. The learned trial Court was bound to allow the application as there exists arbitration clause in the agreement between the parties, therefore, the learned trial court was bound to stay the proceedings of the suit and has prayed for the acceptance of appeal.

4. On the other hand, learned counsel for the respondents-plaintiffs argues that the defendant-appellant was served for 9-4-2010 and the learned counsel appeared and filed memo of appearance and prayed for adjournment for filing written statement and power of attorney. On 14-4-2010 the power of attorney was filed and for filing of written statement and reply of application, the adjournment was prayed which was granted and the case was adjourned to 24-4-2010. Even on 24-4-2010 the application in hand was not filed nor the written statement was filed and adjournment was requested and the case was adjourned to 3-5-2010 and then on 3-5-2010 written statement was not filed and last and final opportunity for filing the written statement and reply of application under Order XXXIX, Rules 1 and 2, C.P.C. was granted for 13-5-2010. Therefore on the said date i.e. 13-5-2010 an application for staying the proceedings under section 34 of the Arbitration Act, 1940 was filed, therefore states that steps in the proceedings of the case were taken before filing of the application, therefore, the application under section 34 of the Arbitration Act, 1940 in hand was not proceedable and the same was rightly dismissed. Learned counsel relying upon cases Messrs Cosmopolitan Development Company v. Messrs So DI ME S.P.A and another (1987 MLD 2832), Muhammad Idris and others v. Tobaarka Hossain (PLD 1965 Dacca 260) and Kh. Muhammad Aslam v. Ch. Aftab Ahmad and 4 others (1992 MLD 60) and Uzin Export Import Foreign Trade Co. v. Macdonald Layton & Co. Ltd. Karachi and another (1996 SCMR 690) argues that any contract ousting jurisdiction of Pakistan Courts is an invalid contract to the extent of ousting the jurisdiction and further in a suit for damages power to stay legal proceedings under section 34 of the Arbitration Act, 1940 was discretionary with the court and the court has exercised discretion vested to it under the law. Another objection was also raised by the learned counsel for the respondents-plaintiffs that a person who has given power of attorney to appoint the learned counsel was not having power to appoint another person to appear and defend the suit. States that delegatee cannot further delegate the powers.

5. I have heard the arguments of the learned counsel for the parties at length and perused the record with their able assistance.

6. The question whether a person who has given power of attorney to appoint the learned counsel was having power to appoint another person to appear and defend the suit in accordance with law, as sufficient material is not available on the file, therefore, I do not comment upon and that question may be seen by the learned trial Court.

7. There are two questions for determination before this Court whether any steps have been taken in proceedings before filing of the application under section 34 of the Arbitration Act and further whether on the basis of arbitration clause in the contract the trial Court was bound to stay the proceedings of the suit. For ready reference arbitration clause of the contract is re-produced as below:-- "All disputes arising out of or in connection with this contract shall be referred to arbitration before the Refined Sugar Association of London for settlement in accordance with the rules relating to arbitration. Such arbitration shall be conducted in accordance with English Law. This contract shall be governed by and construed in accordance with English Law."

8. Admittedly this arbitration is not to be governed by the Arbitration Act, 1940 and it has been referred in arbitration through Refined Sugar Association of London and such arbitration to be conducted in accordance with English Law. Therefore, when the parties have not agreed to resolve their disputes through Arbitration Act, 1940, how the appellant-defendant, then press section 34 of the Act. Further in the light of the above referred citations the discretion lies with the court, even in case of filing of application under section 34 of the Arbitration Act, 1940, if applicable in the suit. In this case, I find that as Arbitration Act, 1940 has not been made applicable therefore; section 34 of the Arbitration Act cannot be pressed into service. Another condition for pressing section 34 of the Arbitration Act 1940 is that the proceedings of arbitration have been commenced, in this case yet no arbitration proceedings have commenced. Further as the proceedings of the suit indicate that steps were taken before filing the application under section 34 of the Arbitration Act, 1940, therefore, in these circumstances the learned trial Court has committed no illegality while rejecting the application under section 34 of the Arbitration Act. In the light of what has been discussed above, I see no force in this appeal and the same is dismissed with no order as to costs. MH/C-4/L Appeal dismissed.