2011 PLP 1642 (CLD)

SALMAN HAMID, J.

Through this C.M.A. 9176 of 2007 the defendants Nos.4 and 5 have prayed for a direction to the plaintiff to proceed to resolve their dispute per terms of Article 25 of the Contract of Purchase dated 27-4-2006, (Purchase Contract), entered into between them (plaintiffs) and defendant No.4; in the meantime: direct that the proceedings in the suit as against the defendants Nos. 4 and 5 be stayed, Justifying the prayer, it was asserted that the plaintiffs on the face of it have preferred the suit against defendant No.1 and that since the defendant No.4 have no liability against the plaintiffs for any loss or damage to the cargo, the defendant No.4 has been wrongly made a party to the suit and, therefore, the suit against defendant No.4 is a clear case of mis-joinder of parties. It was also urged that since the plaintiffs claim against defendant No.4 is based on the Purchase Contract, procedure as laid down therein be adopted - resolution through arbitration. Since defendant No.5 were brought into the suit as agents of defendant No.4 and it (defendant No.5) independently had no connection with the plaintiffs or with the Purchase Contract, it was argued that if the suit is stayed against defendant No.4 such would also hold good against defendant No.5. No other argument was advanced. Precedents, supporting above arguments were also not cited.

2. The plaintiffs on their turn resolutely resisted the C.M.A. It was prayed that the C.M.A. be dismissed as it was not maintainable and was filed without authority of defendant No.4 inasmuch as it was not brought on record. It was alleged that the C.M.A. was mala fide. The defendants Nos .4 and 5 were fully aware of the terms of bill of lading and losses in respect thereof were reported. These defendants were liable thereunder. It was also contended that where the dispute is likely to be adjudicated by a civil court and also by an arbitrator, invariably the civil court would not exercise discretion to stay the suit and split the matter into two actions; one before it (civil court) and the other before an arbitrator. It was also asserted that in the present case and according to defendants Nos.4 and 5's on showing, the Purchase Contract was only between the plaintiffs and defendant No.4. The defendants Nos.1 to 3 and 5 were not party to it (Purchase Contract). It was, therefore, urged that it would be inappropriate that the case of defendants Nos.1 to 3 and 5 is proceeded with before this court between the plaintiffs and such defendants and before an arbitrator between the plaintiffs and defendant No.4. It was also urged that since the liability is yet to be fixed on the defaulting party by leading evidence, at this stage, therefore, it would be unjust and improper to stay the proceedings merely because one out of the five defendants had entered into Purchase Contract, containing the arbitration clause. It was lastly contended that the entire contract, including delivery of cargo was completed at Karachi and that the entire evidence is also readily available at Karachi. Thus, it would be most inconvenient and unjust to carry the same to a foreign country along with witnesses.

3. In support of his contentions, learned counsel for the plaintiffs relied upon the case of Echardt and Company Marine GmbH, West Germany and another v. Muhammad Hanif (PLD 1986 Karachi 138) wherein, on the ground that the learned Single Judge refused to stay the proceedings had exercised discretion on relevant consideration and no view can be substituted for view of the Single Judge even if a different view in the matter was possible, appeal was dismissed by a division bench of this court. Relying on this precedent, it was argued by the learned counsel for the plaintiffs that the court while deciding the application under section 34 of the Arbitration Act, 1940, (Act, 1940) and before exercise of discretion had looked into various aspects of that case: like availability of the evidence and convenience of the parties and expenses, came to the conclusion not to stay the proceedings. Apex court also maintained the decision of the Division Bench of this court, reported as Eckhardt and Co. v. Muhammad Hanif (PLD 1993 SC 42). The other case that was cited by learned counsel was Muhammad Amin and Muhammad Bashir Ltd. v. PAS + R and others (2002 CLD 671 Karachi), wherein it was held that subject to provision of law, the court in its discretion could stay the suits and can exercise its jurisdiction to entertain the suits for adjudication of claim of the parties, containing arbitration clause and can also consider whether the exercise of such discretion in any particular case would be judicious and reasonable. After taking into consideration all the facts and circumstances of the case and by relying upon Hitachi Ltd. Rupali Polyester (1998 SCMR 1618) and Eckhardt and Co. v. Muhammad Hanif (PLD 1993 SC 42), the court declined to stay proceedings. In addition to the above two citations, learned counsel also relied upon State Bank of Pakistan v. Nagson, partnership firm, and others (PLD 1970 Kar. 490). wherein it was held that when in a case some dispute is likely to be adjudicated by a civil court and an arbitrator, then the court has discretion under section 34 of the Act, 1940 not to stay the suit. The stay application that was filed in the suit, and was the subject-matter of the citation was ultimately dismissed. Last case that was cited by the learned counsel was M. A. Nawaz and Co. (Regd.) and 5 others v. NBP through its Regional Manager, Multan (1970 SCMR 234) wherein the apex court upheld the decision of the Single Judge and the decision of the Division Bench that since one of the party to the agreement which contained arbitration clause was not a party to it cannot be non-suited and the application that was made under section 34 of the Act, 1940 was dismissed.

4. I have heard arguments of both the learned counsel and have also gone through the record and the precedents cited by the learned counsel for the plaintiffs.

5. Prayer clause in the present suit would show that the plaintiffs have prayed for a judgment and decree against the defendants jointly and severally in the sum of Rs.10,140,832 with cost and interest/markup/damages/ compensation @ 10% per annum with quarterly rests thereon pendente lite and for future and for any other or better relief. It is also clear from the narration of the plaint that it was defendant No.1's vessel which had brought plaintiffs consignment to Karachi through their local agents/ representatives i.e. defendants Nos. 2 and

3. It is alleged in the plaint that losses have been sustained by the plaintiffs because of the acts of omission and commission of defendants Nos.1, 2 and 3 and also because of the acts of omission and commission of defendants Nos.4 and

5. It is also clear from the narration of the plaint that under the Contract of Affreightment and the provision of the law, applicable, all the defendants were stated to be duty bound to take due and proper care of the consignment, imported by the plaintiffs. Such defendants, according to the plaintiffs, having neglected to perform their functions in terms thereof, they (plaintiffs) have suffered losses which are to be made good by all the defendants, jointly and severally. These losses are yet to be determined.

6. It was also mentioned in the counter affidavit to the affidavit filed in support of C.M.A. that the suit of the plaintiffs could not split into two. A part thereof referred to arbitration when it comes to defendants Nos.4 and 5 and the other part is decided by the civil court when it comes to the defendants Nos.1, 2 and

3. It was asserted that in such like situation and as per settled precedents, the civil court while exercising its discretion invariably refuse to entertain the application of the nature which is the subject matter of the C.M.A. It is also well settled by now that the court in its discretion can exercise its jurisdiction to entertain suit for adjudication of claims of the parties, containing arbitration clause and, can, also consider whether to exercise such discretion in a particular case and whether such an exercise would be judicious and reasonable or otherwise. While exercising such discretion, the factors mentioned above are customarily paramount before the court.

7. For the purposes of the present case, it is patently clear that the evidence is available at Karachi where the entire contract was concluded. Hence, it would be just and convenient if such evidence is looked into by the court here and the case is decided on the contention thereof. It is also well settled by now that no hard and fast rule can be laid down or no line of demarcation can be drawn as to in what cases refusal be made and in what, not. Each case has different factors and grounds of refusal. Particular and peculiar circumstances of each case needs to be addressed. It is the objective assessment of a case which brings to conclusion whether stay of legal proceeding can be granted or refused. Since in the present case save for one, all defendants admittedly are not signatory to Purchase Contract and that even otherwise all the evidence is available at Karachi, it would be convenient for all the defendants to contest the matter here. Stay of proceedings and or splitting the same into two would by no stretch be in the interest of justice. Therefore, the C.M.A. is hereby dismissed, however, with no order as to costs. S.A.K./T-12/K Application dismissed.