2009 PLP 305 (CLD)

NADEEM AZHAR SIDDIQI, J.

The plaintiff by filing application under section 20 read with section 8 of the Arbitration Act, 1940, has prayed that the defendants may be directed to file Arbitration Agreement in Court and an Arbitrator may be appointed to resolve the dispute. The claim of the plaintiff is that he is the partner of Hijaz Butter Supply a duly registered partnership and is entitled to Rs.63,37,600 by way of his share in the net profit of the partnership business and its assets and properties acquired by the defendant No.1 out of the income of partnership. It was further stated in the application that in spite of repeated requests of the plaintiff the defendants Nos. 1 and 2 have not agreed to refer the matter to arbitration. The defendants Nos.1 and 3 have filed their reply in which they have admitted the execution of partnership and registration of firm. It was further stated in the reply that Partnership-Deed dated 1-4-1965 is not in existence and the plaintiff and the defendant No.2 were retired from the said partnership and new partner, namely, Muhammad Ibrahim and Hyder Bux were admitted by consent of retiring and existing partners and a new partnership was executed. The plaintiff has filed his affidavit-in-rejoinder and has defined his retirement from the firm and has also denied his signature on the alleged Partnership-Deed dated 1-7-1996. Learned counsel for the plaintiff submits that the Partnership-Deed dated 1-4-1965 is not disputed, which contains arbitration clause. He then submits that there is a dispute between the partners with regard to the share of the plaintiff and even if it is presumed that the plaintiff was retired from the partnership the matter has to be referred to the arbitrator to determine the share of the plaintiff. No one was present on behalf of the defendants to argue this application. The Partnership-Deed dated 1-4-1965 is not disputed, the said deed contains clause 18 which reads as under:-- 'That in case of any dispute or difference arising out of the affairs of the partnership the same shall be preferred to an impartial arbitrator to the appointed with mutual consent by the, parties to this deed and his award shall be binding on the contracting parties." The dispute between the parties is the existence or non-existence of the partnership and the share of the plaintiff. This dispute is arising out of the Partnership-Deed and in terms of Clause 18 of the said deed the same has to be resolved through arbitration. Before referring the matter to the arbitration three conditions are necessary; (1) existence of arbitration agreement; (2) existence of dispute under the agreement; and (3) B proceedings under chapter-II not have been started. From the perusal of pleadings it appears that the above three conditions have been fulfilled. The parties by agreement have chosen to refer the dispute to the arbitration and are bound to honour the said agreement and cannot bypass the mechanism provided in the agreement on flimsy grounds. In view of the above, the application is allowed as prayed. The defendant is directed to file the agreement in Court within fifteen days and the parties are directed to submit the name of arbitrators within the above-stipulated period for deciding the dispute between the parties. The suit is disposed of as above. S.A.K./M-224/K Application accepted.