2012 PLP 95 (MLD)

MAMOON RASHID SHEIKH, J.

This petition assails the judgment dated 26-3-2011 passed by the learned Additional District Judge, Multan whereby the respondent's appeal was accepted on the question of territorial jurisdiction and the respondent's application under section 20 of the Arbitration Act, 1940 was directed to be heard by the learned Civil Court at Multan.

2. The sole question of law which needs determination is to the effect that whether the Civil Courts at Multan have the territorial jurisdiction to adjudicate upon the petitioner's application under section 20 of the Arbitration Act, 1940.

3. It is contended by the learned counsel for the petitioner that the respondent was given the contract of providing security services to the petitioner through agreement dated 31-10-2010. The said agreement contained an arbitration clause whereby any dispute arising out of or in respect of the agreement was referable to the arbitration. The respondent's contract was cancelled through notice dated 30-11-2010 whereby the respondent was informed that its services would not be required w.e.f. 1-1-2011. Feeling aggrieved the respondent filed an application under section 20 of the Act, ibid, seeking filing of the arbitration agreement and reference of the dispute to arbitration as contemplated under the arbitration clause. The petitioner entered appearance and raised the preliminary objection as to the territorial jurisdiction of the Civil Courts at Multan by filing an application under Order VII, Rule 10 of the C.P.C. The learned trial Court through order dated 20-12-2010 accepted the petitioner's application and directed that the respondent's application under the Act, ibid, be returned for presentation to the competent Court at Karachi. The respondent's appeal against the order of the learned trial Court was accepted through the impugned order dated 26-3-2011, hence, the instant petition.

4. The learned counsel for the petitioner contends that the impugned order dated 26-3-2011 is bad in law inasmuch as the learned appellate Court failed to appreciate that the Civil Courts at Multan do not have the jurisdiction in the matter. Clause 17 of the agreement stipulates that in case of a dispute between the parties the matter shall be referred to mutual negotiations and upon failure of such negotiations the matter shall be referred to arbitration by two arbitrators, one arbitrator to be appointed by each party. The venue of the arbitration was to be at Karachi. On the basis of the same and the fact that the central office of the petitioner is based at Karachi the Civil Courts at Multan do not have the territorial jurisdiction in the matter.

5. The learned counsel for the respondent whilst defending the impugned order submits that the agreement between the parties was executed at Multan and services by the respondent were to be provided all over Pakistan including Multan, as such, the Civil Courts at Multan have the jurisdiction in the matter. Relies on section 20 of the C.P.C. and the judgments reported as Cementation Intrafor and others v. Indus Valley 1989 MLD 4906, Hitachi Limited and another v. Rupali Polyester and others (1998 SCMR 1618) and Special Communication Organization through Director-General, Rawalpindi v. Messrs Ibeel (Pvt.) Ltd., Lahore (2007 CLC 248).

6. I have considered the argument addressed at the bar and have also gone through the record.

7. The question of jurisdiction in the matter is to be determined on the basis of section 31(3) of the Act, ibid, read with section 20 of the C.P.C. Reliance in this regard is placed on a judgment of this Court reported as Baig and Co. v. The Province of West Pakistan and others (PLD 1969 Lahore 453) wherein it has been held that for purposes of determining the territorial jurisdiction of the Court in arbitration matters the rules of the C.P.C. are attracted. The judgments cited at the bar by the learned counsel for the respondent are also in the same vein. The contentions of the learned counsel for the respondent are supported by the judgments cited by him at the bar. Section 20(c) of the C.P.C. provides that Civil Courts within whose territorial jurisdiction the cause of action wholly or partly arises can exercise jurisdiction in the matter. In the instant case the agreement was admittedly executed at Multan and the respondent was to render services all over Pakistan including the city of Multan. Part of the cause of action has arisen at Multan. The civil Courts at Multan are, therefore, vested with the territorial jurisdiction to adjudicate upon the matter.

8. The petition is accordingly dismissed with no order as to costs. M.H./A-217/L Petition dismissed.