2026 PLP 607 (CLC)

JAWAD HASSAN, J.

This case is being decided today in pursuance of the directions issued by the Supreme Court of Pakistan in C.P.L.A. No. 5579 of 2025 titled "Hascol Petroleum Limited, Islamabad v. Additional Rent Controller, Chaklala Cantonment Rawalpindi and others", vide order dated 13.01.2026. The relevant portion thereof is reproduced hereunder: " However, we are sanguine that the learned High Court shall proceed with the matter expeditiously and conclude the same at the earliest possible " Through the instant writ petition filed under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 (the "Constitution"), the Petitioner has called in question the legality of the impugned order dated 29.04.2025 passed by the Additional Rent Controller, Chaklala Cantonment, Rawalpindi.

2. Brief facts, necessary for the disposal of the instant petition, are that the Petitioner is a company which entered into a License Agreement dated 10.07.2017 (the "Agreement") with the Respondent No.2 regarding use of land measuring 1661 square yards situated at PAF Base Nur Khan, Airport Road, Rawalpindi, for installation and operation of a Filling/Service Station. Clause 11.7 of the Agreement pertains to the said arrangement, whereas Clause 11.2 provides a comprehensive dispute resolution mechanism through arbitration. It specifically stipulates that in the event of any dispute arising between the parties out of or in relation to the Agreement, the parties shall, in the first instance, attempt to resolve the matter through friendly consultations. If the dispute is not resolved through such consultations within thirteen days of service of dispute notice by the aggrieved party upon the other, the dispute shall be referred to and finally settled through arbitration. It is the case of the Petitioner that upon arising of certain disputes between the parties, the Petitioner instituted an application dated 27.02.2025 under Section 20 of the Arbitration Act, 1940 (the "1940 Act") before the Civil Judge 1st Class, Rawalpindi, seeking appointment of arbitrator/commencement of arbitration proceedings in terms of the Agreement. The Respondent No.2 filed its reply and the said application is still pending adjudication. Subsequently, the Respondent No.2, allegedly as a counterblast to the aforesaid proceedings initiated by the Petitioner, filed an eviction petition under Section 17 of the Cantonments Rent Restriction Act, 1963 (the "1963 Act") before the Additional Rent Controller, Chaklala Cantonment. In response thereto, the Petitioner, without entering into the merits of the eviction petition, filed an application under Section 34 of the 1940 Act seeking stay of the rent proceedings on the ground that the parties were bound by the arbitration clause and the matter ought to be referred to arbitration. The Respondent No.2 filed its response to the said application on 23.04.2025. Thereafter, the Additional Rent Controller, after hearing arguments of learned counsel for the parties, decided the said application vide impugned order dated 29.04.2025. Being aggrieved thereof, the Petitioner invoked the constitutional jurisdiction of this Court through the instant writ petition.

3. During the proceedings of this writ petition, the Petitioner assailed an interim order of this Court before the Supreme Court of Pakistan, which, while issuing the aforesaid directions, emphasized that the High Court shall proceed with the matter expeditiously and conclude the same at the earliest.

4. It is pertinent to note that this matter was taken up on various dates and during the course of hearing, certain queries were raised by this Court in order to explore the possibility of an amicable resolution between the parties, particularly in view of the dispute resolution clause contained in the Agreement. On 20.01.2026, this Court confronted learned counsel for the parties with the question that if the dispute essentially pertains to alleged non-payment or payment of certain amount under Clause 2.4 of the Agreement, then why the parties are not making sincere efforts to resolve the dispute through friendly consultations or mediation, as contemplated under Clause 11.2 of the Agreement, especially in view of the jurisprudential approach recently adopted by this Court in the case reported as Messrs 5H INSAAT Ve Ticaret Anonim Sirketi v. Secretary and others (2025 CLD 813 = PLJ 2025 Lahore 738) (Rawalpindi Bench). Upon such query, learned counsel for the parties sought time to obtain fresh instructions from their respective clients. Thereafter, on 11.02.2026, learned counsel for the Respondent No.2 sought further time to obtain instructions from the previous counsel of her client in order to properly assist the Court. On the other hand, learned counsel for the Petitioner submitted that his client was ready and willing to explore the possibility of an amicable settlement through mediation, as the dispute arising out of the Agreement could be resolved by mutual understanding without resorting to protracted litigation or formal arbitration proceedings. Today, learned counsel for the Respondent No.2 has also expressed concurrence and willingness to resolve the dispute through mediation.

5. At this stage, it would be beneficial to observe that the Supreme Court of Pakistan has consistently emphasized and encouraged the jurisprudential approach of mediation and Alternative Dispute Resolution (the "ADR") in order to curtail unnecessary litigation and ensure expeditious dispensation of justice. Reference in this regard may be made to the judgments reported as Messrs Mughals Pakistan (Pvt.) Limited v. Employees Old Age Benefits Institution through Director Law, Lahore and others (PLD 2025 SC 1), Province of Punjab through Secretary C&W, Lahore and others v. Messrs Haroon Company, Government Contractor and others (2024 SCMR 947) and Commissioner Inland Revenue v. Messrs RYK Mills (2023 SCMR 1856). The same principle has been consistently followed by this Court in the cases of Faisal Zafar and another v. Siraj-ud-Din and 4 others (2024 CLD 1), Netherlands Financierings Maatschappij Voor Ontwikkelingslanden N.V. (F.M.O.) v. Morgah Valley Limited and SECP (PLD 2024 Lahore 315 = 2024 CLD 685) and Strategic Plans Division and another v. Punjab Revenue Authority and others (PLD 2024 Lahore 545). More recently, the Supreme Court of Pakistan, in the case of Muhammad Naseer Butt v. Additional District Judge, Lahore and others (PLD 2025 SC 499), has elaborately discussed the concept, importance and benefits of mediation, as well as the role and responsibilities of Judges and Advocates in promoting mediation as an effective mode of dispute resolution. The Supreme Court has highlighted that mediation is not merely an alternative mechanism but a paradigm shift in dispute resolution, founded on collaboration, confidentiality, flexibility and party autonomy. It has been further observed that mediation reduces costs, saves time, alleviates the burden on Courts and provides a more practical and interest-based solution, which may not necessarily be available through adversarial litigation. The Supreme Court further took note of the statutory recognition and legislative framework provided under the Alternative Dispute Resolution Act, 2017 (the "Act of 2017"); the relevant provincial legislations; the ADR Mediation Accreditation (Eligibility) Rules, 2023 and the Mediation Practice Direction (Civil) Rules, 2023, thereby consolidating mediation as a mainstream dispute resolution tool within the judicial system of Pakistan. Similarly, this Court (at Rawalpindi Bench), in the case of Messrs Sadiq Poultry (Private) Limited Federation of Pakistan and others v. First Habib Modaraba (PLD 2025 Lahore 57=2025 CLD 90) has further strengthened the concept of mediation by emphasizing that disputes involving financial, commercial and contractual matters ought to be resolved through mediation, where possible, so that judicial time may be preserved for matters requiring adjudication on merits. Likewise, mediation has recently been reinforced and encouraged by this Court in the case of Mst. Ghazala Hussain and others v. Federation of Pakistan and others (2025 LHC 8219) (LHC Citation), wherein a longstanding dispute arising out of acquisition proceedings relating to Ojhri Camp land measuring 259 Kanal 03 Marla undertaken by the Military Authorities (HQ AAD Command, Rawalpindi), has successfully been resolved through mediation. Moreover, in Messrs 5H INSAAT Ve Ticaret Anonim Sirketi Case (supra), this Court, while taking up the issue of foreign investment and public welfare project(s), has promoted the concept of mediation instead of driving the parties towards prolonged arbitration proceedings. It was observed therein that delay in public interest projects deprives the public of essential services and infrastructure, adversely impacts quality of life, undermines public trust in governmental institutions and project stakeholders and also discourages future funding and investment. Furthermore, where foreign investment is involved, delays may jeopardize investor confidence and hamper the inflow of modern technology, management practices and advanced marketing techniques into the country.

6. In view of the above and considering the consensus of learned counsel for the parties to resolve the dispute through mediation, Hon'ble Mr. Justice (R) Maqbool Baqir, former Judge of the Supreme Court of Pakistan; former Chief Justice of the Sindh High Court and former Caretaker Chief Minister of Sindh, is hereby appointed as Mediator to resolve all outstanding disputes between the parties in line with the jurisprudential approach laid down in the aforesaid judgments. The Mediator shall convene a meeting between the parties at IBA, ADRIC, City Campus, Plot Nos. 68 and 88 Garden, Kiyani Shaheed Road, Karachi on 23.02.2026 and conclude the mediation proceedings within a period of four weeks thereafter. The mediation fee of Rs.1,000,000/- (rupees one million) shall be borne equally by both the parties.

7. The writ petition is, accordingly, disposed of in the above terms. MH/H-2/L Order accordingly.