Stay of proceedings

Petitioner / plaintiff was a subcontractor, whereas main contract was between respondent / foreign company and respondent / National Highway Authority (NHA)

Petitioner / plaintiff filed civil suit under S. 14 of Arbitration Act, 1940 against respondent / foreign company

Trial Court on application filed by respondent / foreign company stayed proceedings of suit under S. 4 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, as Foreign Arbitral Award had already been issued in its favour

Validity

Mere exchange of few letters or act of registering some complaints, in absence of privity of contract between petitioner / plaintiff and respondent / NHA, did not give any cause of action to petitioner / plaintiff to sue respondent / NHA

Subcontract was independent and any representation made therein, or scope of obligations undertaken in the context thereof did not bind respondent / NHA- the employer, which could not be held liable for any vicarious liability in the guise of subcontract

Arbitration agreement, under reference, was not null and void, inoperative or incapable of being performed

High Court declined to interfere in the order passed by Trial Court and directed that legal proceedings would remain stayed till the circumstances so warranted and could be resurrected if conditions so arise

Revision was dismissed, in circumstances.

Where parties to a contract have agreed to resolve their disputes through arbitration, ordinarily Court must hold the parties to their bargain

This is not an absolute rule

Power conferred upon Court to grant a stay under S. 34 of Arbitration Act, 1940 is entirely a matter of discretion of Court

Expression "such authority may make an order staying the proceedings" indicates that Court has discretion to stay suit or not.

Proceedings in suit filed by appellant/plaintiff company were stayed by Trial Court due to arbitration clause in contract between the parties

Application under O. VII, R. 11, C.P.C. filed by respondents/defendants-Authorities for the plaint in the suit to be rejected on the ground that Court at place "I" did not have the territorial jurisdiction to adjudicate upon the suit, was dismissed

Plea raised by respondents/defendants-Authorities was that works under contracts were executed at place "M" and that contracts were also executed at place "M"

Validity

One of the respondent/defendant authority did not have its offices at place "I"

Dispute as to whether the contracts were executed between respondent/defendant authority and JV at place "I" or place "M" was also to be determined by Trial Court after recording of evidence

Whether or not respondent/defendant authority's excuse for payment of amount into JV account instead of payment through Letter of Credit in accordance with the provisions of the contracts was plausible or sustainable was also to be determined in an adjudicatory process in Trial Court in the suit instituted by appellant/plaintiff company

Trial Court did not commit any jurisdictional irregularity by dismissing application under O. VII, R. 11, C.P.C.

High Court set aside order of Trial Court staying proceedings, resultantly application under S. 34 of Arbitration Act, 1940 was dismissed

Appeal was allowed accordingly.

Appellants/ defendants were aggrieved of dismissal of their application filed under S.34 of Arbitration Act, 1940 for staying proceedings and directing the parties to pursue their remedies in terms of arbitration clause

Plea raised by respondent / plaintiff was that certain notices issued to appellants/ defendants were not responded and in Trial Court they had asked to file written statement

Validity

Request for adjournment for submission of written statement was recorded by Trial Court on the day when the Court was also confirming that the entire attachments to the suit were not available with appellants/defendants and the same were handed over to them on the given day

Trial Court had wrongly construed the intention of appellants / defendants to discard their right to invoke arbitration clause available in partnership deed

Any initial presumption arising against appellants/defendants stood dislodged

Referred communication, prior to institution of suit had no bearing, as S. 34 of Arbitration Act, 1940 provided that an application for stay could be instituted at any time after commencement of legal proceedings

Suit was relied upon for ascertaining the intention to waive off right of arbitration related to period prior to partnership deed which then required the disputes to be resolved through arbitration

Earlier suit of respondent / plaintiff pertained to year, 2014 which was disposed of on 16-02-2015 on the basis of partnership deed formally executed on 07-01-2015

Subsequent suit could not be termed as a continuation of the earlier suit, for the purposes of ascertaining situation in hand

This fact was mistakenly observed by the Trial Court

Preamble of partnership deed gave it a superseding effect besides the fact that specific clause of partnership deed provided that the same constituted the entire understanding between the parties with respect to the subject matter of the partnership deed

High Court in exercise of appellate jurisdiction, set aside the order passed by Trial Court and proceedings in the suit were stayed

Appeal was allowed, in circumstances.

It was necessary that appellant / defendant should not have disentitled itself from doing so either by filing written statement or by taking any other step in the proceedings

Application of appellant / defendant to Trial Court under S. 34 of Arbitration Act, 1940, was filed "before filing a written statement or taking any other step in the proceedings"

Words "taking any other steps in the proceedings" did not include each and every step, it must be such a step which clearly and unambiguously manifested intention to waive benefit of arbitration agreement and to proceed with the suit

Taking other steps in suit proceedings connoted the idea of doing something in aid of the progress of suit or submitting to jurisdiction of Trial Court for the purpose of adjudication of merits of the controversy in suit

Once a party exercised option to invoke arbitration clause in terms of S. 34 of Arbitration Act, 1940, that was a manifestation of its readiness and willingness to do all things necessary for the proper conduct of arbitration

If Trial Court was satisfied that dispute pending before it in a suit (legal proceedings) should be decided by arbitration in accordance with arbitration agreement and parties were ready and willing to do all things necessary for proper conduct of arbitration, it could make an order staying the proceedings before it

Effect of an order under S. 34 of Arbitration Act, 1940, was of a stay of the suit

High Court set aside order passed by Trial Court whereby appellant's / defendant's application under S. 34 of Arbitration Act, 1940, was dismissed and proceedings in the suit instituted by respondent/plaintiff were stayed

Appeal was allowed, in circumstances.

Provision of S. 34 of Arbitration Act, 1940, has been enacted to make arbitration agreements effective and prevent a party from going to Court contrary to his/its own agreement

Where parties have agreed to refer disputes to arbitration, Court should as far as possible give an opportunity for resolution of disputes through arbitration rather than by judicial adjudication

Powers vested in Court to grant stay under S. 34 of Arbitration Act, 1940, are entirely a matter of discretion of Court

Courts must not ignore to see that parties are held to their bargain and promote sanctity of contracts/agreements

Stay of proceedings in a suit is a more expedient and proper course to follow where there is arbitration clause in agreement/contract

When application under S. 34 of Arbitration Act, 1940, is filed in pending suit, further progress/proceedings in such suit automatically comes to an end and Trial Court's power to act under Civil Procedure Code, 1908, is suspended till a decision is rendered on such application

Court has jurisdiction to entertain suit, however, Court in its discretion may stay the suit but Court has to consider whether discretion should be exercised in a particular case or not

Provision of S. 34 of Arbitration Act, 1940 does not make it obligatory on Court to necessarily refer dispute to arbitration and may exercise discretion to stay proceedings if it is satisfied that there is no sufficient reason why matter should not be referred to in accordance with the arbitration agreement

Arbitration agreement is a contractual undertaking by which parties agree to settle their dispute by way of arbitration rather than to proceed in Court

Whenever, any dispute or difference arises relating to and arising out of arbitration agreement, any party to the agreement may apply for staying of Court's proceedings by filing application under S. 34 of Arbitration Act, 1940

Party who wishes to refer disputes to arbitration has to apply without delay to Court for stay of proceedings particularly in breach of agreement to arbitrate dispute which arises between parties and falls within the scope of arbitration

Word "dispute" has got wide meaning and scope and includes any claim which other party admits under S. 34 of Arbitration Act, 1940

Court has ample powers to exercise its discretion to stay legal proceedings provided that there has been a valid arbitration agreement, proceedings in Court have been commenced, application is made by a party to the proceedings before filing written statement and or taking any other step in pending proceedings and such party is ready and willing to do all the acts necessary for the proper conduct of arbitration.

Appellant/plaintiff company was awarded contract for construction of carriageway but certain differences led to filing of suit

Ad-interim injunction issued by Trial Court in favour of appellant/plaintiff was set aside under S. 34 of Arbitration Act, 1940

Validity

Appellant/ plaintiff did not apply to respondent/defendant (National Highway Authority) for extension of time for completion of the project

If NHA and/or Engineer, as the case was, had declined to accede to genuine request of appellant/plaintiff for the grant of extension in time, then appellant/plaintiff could have been in a good possible position to have blamed NHA for causing undue delay and creating hurdles in the way of appellant/plaintiff towards completion of project

In absence of such resort regarding seeking extension in completion period, appellant/plaintiff exposed itself to unsavory consequences, for which NHA could not be held responsible

It was neither a statutory nor a mandatory requirement of law that application under S. 34 of Arbitration Act, 1940, must specify disputes arising between the parties

Mere non-mentioning of disputes in application under Arbitration Act, 1940 would not render the application bad ipso facto

Court, by itself perusing arbitration clause in the contract and claim raised in the suit, would determine whether claim brought in suit, sought to be stayed or otherwise, was within the submission to arbitration

Trial Court did not just stay proceedings in the civil suit, but had also put aggrieved party at liberty to approach concerned forum by referring the matter to arbitration if so needed

High Court declined to interfere in order passed by Trial Court as the same was not suffering from any legal infirmity

Appeal was dismissed, in circumstances.

When Court stays proceedings in suit instituted by either party to agreement containing arbitration clause, parties are left whether to institute arbitration proceedings with the intervention of Court (as provided under S. 20 of Arbitration Act, 1940), or without intervention of the Court (as provided under Chapter-II of Arbitration Act, 1940)

Where parties to suit, who are also parties to arbitration agreement executed prior to institution of suit, jointly apply for matters in dispute between such parties to be referred to arbitration, Court may treat such application as application under S. 20 of Arbitration Act, 1940 and refers disputes to arbitration.

Petitioner / plaintiff filed suit for specific performance of agreement to sell and proceedings in the suit were stayed by Lower Appellate Court in exercise of jurisdiction under S.34 of Arbitration Act, 1940

Validity

Provision of S.34 of Arbitration Act, 1940, has been enacted to make arbitration agreements effective and prevent a party from going to Court contrary to his/its own agreement

Where parties had agreed to refer disputes to arbitration, Court should as far as possible, give an opportunity for resolution of disputes through arbitration rather than by judicial adjudication

Powers vested in Court to grant stay under S.34 of Arbitration Act, 1940, is entirely a matter of discretion of Court

Court must not ignore to see that parties are held to their bargain and promote sanctity of contracts/ agreements

Application under S.34 of Arbitration Act, 1940, merits rejection, when in such application, there are no averments as to the applicant's readiness and willingness to have the disputes resolved through arbitration

Court has jurisdiction to entertain the suit, however, the Court in its discretion may stay the proceedings in the suit and also consider whether the discretion should be exercised in a particular case or not

Provision of S.34 of Arbitration Act, 1940, does not make it obligatory on the Court to necessarily refer the dispute to arbitration and may exercise the discretion to stay the proceedings if it is satisfied that there is no sufficient reason why the matter should not be referred to in accordance with the arbitration agreement

High Court declined to interfere in the matter and maintained the order passed by Lower Appellate Court

Revision was dismissed in circumstances.

Petitioners / accused persons were aggrieved of refusal of Trial Court to stay criminal proceedings till determination of marriage by Family Court

Validity

When Civil Court and Criminal Court were seized of matter and result of one proceedings had a direct bearing on the result and outcome of another, then in such state of affairs, proceedings before Criminal Court had to be halted till the decision of case pending before Civil Court

High Court set aside order passed by Trial Court and proceedings before Criminal Court were adjourned sine die till decision of family suit filed by respondent/complainant for restitution of conjugal rights

Revision was allowed accordingly.

Appellant/assessee sought stay of proceedings in consequence of an order passed by Commissioner Inland Revenue (Appeals)

Validity

Commissioner Inland Revenue (Appeals) had annulled the order of the assessing officer, therefore, no demand existed against the appellant/assessee

Department could only proceed afresh if the facts of the case and legal provisions so warranted

Request for granting stay of proceedings was not allowed.

Mere filing of an appeal/writ petition before the High Court or a higher forum does not automatically operate as a stay of proceedings unless a specific order has been passed in this respect.

Plaintiff was an association of pilots who assailed notification issued by defendant Airline pertaining to terms and conditions of service of pilots

Plaintiff relied upon an agreement executed between the parties

Defendant Airline sought stay of proceedings to invoke arbitration clause in the agreement

Validity

Held, it was only to the extent that Airline was no more willing to treat plaintiff as a body, which could enter into negotiations with regard to working conditions of Airline pilots

Defendant Airline did not dispute or derecognize any other independent and individual activity of plaintiff association according to their own Charter and Memorandum of Association

Mere registration under Societies Act, 1925 did not create any statutory obligations on an employer to enter into negotiations in respect of terms and conditions of service of members of such society

Industrial Relations Act, 2012, had specifically provided formation of Trade Union and election of Collective Bargaining Agent to a certain category of employees for which pilots stood disqualified

Recourse to Societies Act, 1925 could not be equated or termed parallel for plaintiff Association to act as a representative body or a Collective Bargaining Agent with regard to terms and conditions of service of pilots

What was not provided in law could not be read into it by other means

Plaintiff might have a legal status as a society to act for betterment of its members but could not claim as a matter of right to be representative body or a Collective Bargaining Agent for negotiating terms and conditions of service of pilots in defendant Airline

High Court stayed the proceedings of civil suit as there was an arbitration clause in agreement and termination of agreement fell within all disputes provided in the agreement and parties were to go for arbitration accordingly to agreed terms

Application was allowed, in circumstances.

Plaintiff filed recovery suit wherein defendant before filing his written statement submitted application for stay of proceedings and referred the matter to the Arbitrator

Trial Court dismissed the application for stay of proceedings

Validity

Parties had entered into the agreement which contained arbitration clause

Dispute between the parties had arisen out of the agreement and same should be referred to the Arbitrator in the manner and mode provided by the arbitration clause

Plaintiff instead of arbitration proceedings had instituted the present suit on the basis of a different stance contrary to the stance of the defendant

Plaintiff should have resorted to the arbitration proceedings to be carried out by the Arbitrator for resolution of controversies

Nothing was on record that agreement containing arbitration clause had been executed under duress, undue influence or on account of any misrepresentation on the part of defendant

Plaintiff could not be allowed to avoid arbitration agreement, in circumstances

Impugned order passed by the Trial Court was set aside

Proceedings before Trial Court were stayed and matter was referred to the Arbitrator for decision

Appeal was allowed, in circumstances.

Petitioner assailed the order of Trial Court whereby it, while acceding to the request of Deputy Prosecutor General had adjourned the case sine die in the light of S. 10(3)(f) of Punjab Criminal Prosecution Service (Constitution, Functions and Powers) Act, 2006

Validity

Prosecutor General or any Prosecutor especially authorized in that behalf by the Prosecutor General had to inform the court and he had to submit before the court the reasoning and decision of the Cabinet/Government

Neither any decision was made by the Government i.e. approval by the Cabinet nor any Prosecutor was specifically authorized in that behalf by the Prosecutor General

Deputy Prosecutor General had not even submitted before the Court that he was making the request under the instructions of the Prosecutor General

Mere fact that earlier case against the accused had already been postponed due to non-availability of a witness did not constitute a valid reason for postponement

Statement of the Deputy Prosecutor General had no sanctity in the eyes of law

Impugned order was set aside being illegal and void

Trial Court was directed to start the proceedings from that juncture when the case was adjourned sine die

Criminal revision was allowed, in circumstances.

Approval of the Government in order to obtain a stay under S. 10(3)(f) of the Act is necessary and that should be based on specific reasons

Such reasons should be in writing

Case is to be forwarded either by the Prosecutor General by advancing reasons to the cabinet or the cabinet itself is to take the decision but such decision must be based on some cogent reasons

Government, as mentioned in the S. 10 of the Act does not mean the Prosecutor, Prosecutor General or Secretary Prosecution or Chief Secretary, it is the 'Cabinet'.

Terms and conditions mentioned in bill of lading with regard to jurisdiction of Court at any particular place could not be considered so sacrosanct or untouchable in admiralty jurisdiction under codified law but the Court while exercising jurisdiction to stay the suit had to comprehend whether the Court had otherwise jurisdiction to decide the lis in its applicable admiralty laws or not

No such condition in law was mentioned to oust partial or outright jurisdiction of High Court but the case had to be decided in the parameters and confined of law

Stay of proceedings could not be claimed as a matter of right otherwise whole purpose of Admiralty jurisdiction of High Court vested in law could become redundant and superfluous and its jurisdiction was only to be restricted and limited to arrest the ship and ask for security as precondition to allow sailing of vessel then stay the suit such was not the actual philosophy and astuteness of law

Defendants had filed suit before Court in "London" which could be decided independently without any predominating or overriding effect on pending suit in local laws jurisdiction

Here not only security was furnished but some material orders had already been passed in Trial Court so the issues should be settled and parties were to be afforded an opportunity to adduce evidence so that pending suit could be decided on merits rather than lying dormant or hanging around without any lawful purpose and justification

Continuance of action in High Court was not to operate as an injustice to defendants, who had failed to make out a case that plaintiff did not disclose a cause of action or that the suit was frivolous, vexatious and or oppressive to them or it amounted to an abuse of process of the Court

High Court set aside the order passed by Trial Court

Appeal was allowed accordingly.

Defendants after availing two opportunities for filing of written statement, moved application under O. VII, R. 11, C.P.C. seeking rejection of plaint on grounds that suit was not maintainable in view of arbitration clause available in contract agreement

Application filed by defendants under O. VII, R. 11, C.P.C. was treated as an application under S. 34 of Arbitration Act, 1940 and proceedings were stayed

Validity

Mere wrong mentioning of provision of law could not deprive a party from relief for which it was otherwise entitled

Such was not a matter hinging upon wrong mentioning of a provision as defendants with conscious mind moved application by invoking provision of O.VII, R. 11 C.P.C.

Defendants had no intention to seek stay of proceedings rather they while canvasing multiple reasons, including arbitration clause of agreement, sought rejection of plaint

Application moved by defendants could not be treated as application under S. 34 of Arbitration Act, 1940 and proceedings could not be stayed

High Court set aside judgment and decree passed by Trial Court resulting into dismissal of application filed by defendants

Revision was allowed in circumstances.

Parties entered into contract for construction of multi-storeyed apartments and plaintiff had furnished performance bond equal to 10% of contract price in favour of defendant

Plaintiff filed suit as dispute between parties had arisen due to delay in completion of contract

Trial Court accepted application filed by defendant and stayed proceedings till determination of matter by arbitrator

Validity

No document was available on record to show that defendant took no steps for referring matter and dispute with plaintiff to arbitration

Defendant was ready and willing to go to arbitration prior to institution of suit by plaintiff

Mere inaction or lack of response on part of defendant to claim of plaintiff for payment of money could not be construed as unwillingness on part of defendant to cooperate in commencement of arbitration proceedings

High Court declined to interfere in orders passed by Trial Court

Appeal was dismissed in circumstances.

High Court declined to send blank/unsigned agreements for arbitration leaving question to be decided for arbitration first by Arbitrator the effect of aftermath of non-signing of agreement and for such limited purpose Arbitrator would assemble parties to examine providence of draft agreements which were inoperative and incapable of being performed

In case of valid and binding contract, parties must honour their bargain to invoke a particular forum by mutual agreement

High Court declined to refer the matter to Arbitrator not on the basis of its own discretion rather than the circumstances did not reflect to invoke arbitration or honour the forum selection clause on the strength of unsigned agreements

Application was dismissed in circumstances.

Defendant instead of submitting written statement moved an application seeking stay of proceedings but same was dismissed

Validity

Plaint was filed by the plaintiffs on 05-06-2015 wherein summons were issued

Defendant appeared on 18-06-2015 and submitted his power of attorney on 25-07-2015 and obtained copy of plaint on the same day

Defendant after obtaining copy of plaint and other documents got knowledge for the first time with regard to cause of action

Defendant moved application for stay of proceedings promptly in circumstances

Court had to be satisfied on the basis of facts and circumstances in each case that conduct of the party seeking stay of proceedings displayed an unequivocal intention to proceed with the suit and give up the right to have the matter disposed of through arbitrator

Court should examine the facts in each case so as to determine whether conduct of party seeking stay would amount to pursuing the suit

Conduct of party seeking stay of proceedings ought to reflect willingness to participate in the same and factor of acquiescence must not be in doubt

Requesting a single adjournment would not tantamount to stepping in the proceedings by the party seeking stay of the same

Impugned order passed by the Trial Court was set aside

Application moved by the defendant should be deemed to be pending

Trial Court was directed to decide the said application after affording an opportunity of hearing to the parties

Appeal was allowed in circumstances.

Proceedings of any lis could not be adjourned for indefinite period merely for the reason that review had been filed in the Supreme Court

Impugned order passed by the Labour Court was set aside

Labour Court was directed to decide the pending petition within a period of three months

Constitutional petition was allowed in circumstances.

High Court directed the courts below not to stay proceedings in cases until a specific order to stop proceedings of Trial Court was not issued

Registrar of High Court was directed to circulate copy of present judgment to all Judicial Officers working within jurisdiction of High Court that until proceedings of courts below were not stopped through a specific order, the same would continue with proceedings of lis

Mere pendency of any matter before High Court against interlocutory order would not be taken as an automatic bar to continue normal proceedings of main lis

If proceedings of any lis were found to be stayed/adjourned sine die without any specific order passed by superior court, such cases would be stream lined to normal proceedings.

If defendant filed written statement or took a 'step in the proceedings' then he would not be entitled thereafter to seek a stay of the suit

Where counsel appearing for the party had sought adjournments for filing a written statement and had obtained time on more than one occasion for such purpose then application for stay of suit would not be maintainable

Defendant ought to have applied for setting aside the order for striking off defence

Filing of such application could not be considered to be a "step in the proceedings"

Had the defendant made such an application and said order had been set aside then he could not have been precluded to file an application under S.34 of Arbitration Act, 1940

Defendant could not have sought stay of the proceedings without having the said order set aside

Parties were presumed to be aware of the contents of the order sheet maintained by the Trial Court

Once defendant had gone through the suit then he must at the earliest make up his mind whether or not to submit to the jurisdiction of the court

If defendant wanted to opt for the dispute resolution mechanism contained in the contract then he should take corrective steps and inform the court without any delay about his intention to seek stay of the suit

No one could be stopped for seeking an adjournment for filing an application under S.34 of Arbitration Act, 1940

If after appearance of defendant suit was adjourned for filing written statement without expressing his intention of filing an application under S.34 of Arbitration Act, 1940 then he could be said to have taken a step in the proceedings

Defendant remained silent before the Trial Court for six occasions and case was adjourned for filing written statement

Trial Court was correct in dismissing the application for stay of proceedings in the suit

Appeal was dismissed in circumstances.

Conditions.

Conditions.

Person applying under S. 34 of Arbitration Act, 1940 has to satisfy the Court firstly; that there was an agreement to refer, secondly; that suit related to any matter agreed to be referred to arbitration and thirdly; that there was a 'dispute' between parties which was covered by arbitration clause in agreement

Unless such is shown, suit cannot be stayed.

Written statement was not filed by defendant but was given time to file same on several dates on specific requests in such regard time was granted to file written statement

Validity

Such adjournments amounted to taking steps in proceedings and filing a separate counter suit also amounted to acquiescence in proceedings

Mere existence of an arbitration clause in agreement between parties did not bar a suit or alternate legal proceedings in Court which otherwise did not qualify to be referred to arbitration

In application for stay of suit, defendant was required to state matter briefly; the matter that plaintiff alleged and he denied or he alleged and plaintiff denied but no such averment was made in application

Defendant simply said that as there were arbitration clauses in agreement, therefore suit should be stayed

Non-payment of dues by defendant to plaintiff was an independent cause of action and same could not be termed as a dispute which should be referred to arbitration

High Court declined to stay proceedings

Application was dismissed in circum-stances.

Plaintiff engaged in business of imports, distribution, marketing and selling of defendant's (foreign company) products in the local markets in Pakistan

Contention of plaintiff was that defendant (foreign company) had terminated agreement to deprive him from the fruits of the same and to cause irreparable loss

Validity

Defendant was a company established and functional in a foreign country and manufacturing its product there

Parties were in notice and knowledge of their status and place of residence/business

Interpretation of agreement, words used therein or conduct of the parties had to be examined keeping such fact in view

Plaintiff had nowhere challenged the legality of the Court of foreign country nor it was his case that issue involved/raised by him could not be determined by such court or plaintiff's right could not be determined by such court

Status of plaintiff was that of 'distributor' of defendant-foreign company for products supplied through shipment

Such was a series of events

Every breach thereof would give a right to the plaintiff but every such right would be subject to 'arising from or in connection with the agreement'

Plaintiff had right to sue at the place where cause of action had accrued which would be in a foreign country

Civil Procedure Code, 1908 did explain the 'jurisdiction', 'try all suits unless barred', 'rejection of plaint or return thereof for presentation before proper forum' but nowhere permitted the courts to stay proceedings of the suit

Once a lis was brought to a file of courts then law would provide mechanism for disposal of the same but it did not include an order of stay proceedings for an indefinite period

Procedure in courts in a foreign country might be different from one provided in Civil Procedure Code, 1908

Returning of plaint for presentation before proper forum would not meet the requirement of law rather result in causing prejudice to plaintiff

Suit before High Court in Pakistan was not maintainable which was dismissed in circumstances

High Court observed that dismissal of suit would not prejudice the rights of plaintiff to institute proper proceedings for adjudication of its grievances/claims as per applicable limitation of law if any.

Plaintiff initiated legal proceedings for number of reliefs including one of declaration and cancellation of lease in favour of defendant

Such dispute was never agreed to be referred to arbitrator nor the parties to agreement at that time were competent or legally justified to keep such authority with them or to get a matter referred for arbitration at their choice when the title, status and rights of defendant would in any case of arbitration were likely to be prejudiced

High Court declined to stay the proceedings

Application was dismissed in circumstances.

Mere allegation of fraud/forgery in a civil suit against defendant cannot by itself be a ground for refusing a stay the proceedings in suit.

Mere pendency of criminal proceedings against defendant by itself cannot be a ground on which proceedings in the suit can be stayed under S.34 of Arbitration Act, 1940.

Defendant on the first available opportunity filed application to stay the proceedings and to refer the matter to arbitrator

Trial Court allowed the application filed by defendant and stayed the proceedings in suit for recovery of damages

Plea raised by plaintiff was that application was filed by defendant after many adjournments

Validity

Once the Court would stay proceedings in suit, the parties were left whether to institute arbitration proceedings with intervention of Court (under S.20 of Arbitration Act, 1940), or without intervention of Court (under Chap.II of Arbitration Act, 1940)

Where parties to the suit, who were also parties to arbitration agreement executed prior to institution of suit, jointly applied for matters in dispute between such parties to be referred to arbitration, the Court could treat such application as an application under S.20 of Arbitration Act, 1940, and could refer the disputes to arbitration

Adjournment granted in routine by Trial Court was not inductive of defendant's conduct to abdicate his claim to have disputes raised in the suit to be decided in accordance with arbitration clause in the agreement

Single adjournment granted by Court in routine, requiring defendant to file a power of attorney and written statement could not be termed as 'a step in the proceedings'

Date on which the order was passed was the first date on which representative of defendant had tendered appearance in Court

Conduct of the defendant, in order to be termed as 'a step in the proceedings' must be such as would manifestly have displayed an unequivocal intention to proceed with the suit and gave up the right to have the matter disposed of by arbitration

Trial Court not only stayed proceedings in civil suit but had also directed plaintiff to invoke arbitration clause in agreement for resolution of dispute

Trial Court could not have given such direction and it was against the law

High Court partially set aside the order passed by Trial Court only to the extent of direction given to plaintiff to invoke arbitration clause

Appeal was allowed accordingly.

Pursuant to Agreement in question, arbitration proceedings under International Chambers of Commerce Rules were initiated and admittedly the same culminated in rendering of a partial award of the Tribunal, consisting of three Arbitrators

Plaintiffs fully participated in proceedings of their chosen forum but at some stage they decided not to proceed further

Award rendered by Tribunal was also not challenged by plaintiffs

Suit was instituted in year, 2011 i.e. after more than eleven years from the date of termination of the Agreement

After termination, plaintiffs themselves invoked arbitration clause and participated in arbitration proceedings under International Chambers of Commerce Rules

Effect

Article of the Agreement was a valid 'arbitration agreement', dispute raised in the suit read with relief sought were covered under the 'arbitration agreement'

Plaintiffs did not assert that the 'arbitration agreement' was null and void, inoperative or incapable of being performed

Agreement was capable of performance for the purposes of S. 4 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, and High Court stayed the proceedings

Application was allowed in circumstances.

Earlier application for stay of proceedings was filed on behalf of defendant company but the same was dismissed being incompetently filed

On second application, Trial Court stayed proceedings of trial for matter to be decided through arbitration but Lower Appellate Court set aside the order passed by Trial Court and dismissed the application

Validity

Two fundamental factors were to be satisfied, firstly that written statement was not filed and secondly that no steps in the proceedings had been taken by defendant company

Except for such two conditions, no limitation was provided for filing such application and no time was prescribed for filing application under S. 34 of Arbitration Act, 1940

Where court was satisfied that ingredients of S. 34 of Arbitration Act, 1940, had been fulfilled, then proceedings were to be stayed so as to give effect to arbitration agreement

Nature of dispute raised by plaintiffs by instituting suit related to and having essentially arisen from and out of joint venture agreement

Lower Appellate Court passed order in question and in doing so exercised jurisdiction vested in it illegally and with material irregularity

Trial Court properly exercised its jurisdiction in accordance with law and no legal infirmity was pointed out so as to require interference with order passed by Trial Court

Stay of proceedings was in accordance with law and was just and proper

Revision was allowed in circumstances.

Suit for recovery of damages and compensation was pending before Trial Court and application filed by defendant for stay of proceedings was dismissed

Validity

Parties had not agreed to make Arbitration Act, 1940, applicable to them, therefore, S.34 of Arbitration Act, 1940, could not be pressed into service

Another condition for pressing S.34 of Arbitration Act, 1940, was that proceedings of arbitration had been commenced but in the present case no such proceedings commenced

No steps having been taken before filing application under S.34 of Arbitration Act, 1940, therefore, Trial Court did not commit any illegality while rejecting application under S.34 of Arbitration Act, 1940

Appeal was dismissed in circumstances.

Application filed under S.34 of Arbitration Act, 1940 was dismissed by the Trial Court but same was accepted by the Appellate Court

Validity

Proceedings of suit could be stayed under S.34 of Arbitration Act, 1940 if matter was mutually agreed between the parties

No occasion to stay proceedings of the present suit existed as factum of alleged arbitration agreement had been denied by the plaintiff

Impugned judgment passed by the Appellate Court was not sustainable in the eye of law which was passed without application of judicious mind and in excess of jurisdiction vested in it

Impugned judgment passed by the Appellate Court was set aside and order of Trial Court was restored

Constitutional petition was accepted in circumstances.

Defendants did not make application for stay of suit in the first instance but they filed memo of appearance and statement along with para-wise comments copy of which was supplied to the plaintiff

Present application under S. 34 of Arbitration Act, 1940 had been filed at a belated stage

Section 20 of Arbitration Act, 1940 was not applicable as suit had already been filed

Application filed under Ss.20 & 34 of Arbitration Act, 1940 read with S. 151, C.P.C. was dismissed in circumstances.

Bank guarantee submitted by the party for due performance of the contract was an absolute and unconditional Bank guarantee of which encashment could not be stayed by the court which became functus officio by staying the proceeding of the suit by invoking the provisions of S.34 of Arbitration Act, 1940.

Tenant resisted ejectment proceedings on the plea that he had filed suit for specific performance of agreement to sell and possession of premises was with him as part performance of the agreement

Validity

Tenant could not be protected from ejectment merely by asserting agreement to sell in his favour or by filing suit for specific performance of agreement to sell, unless sale-deed was executed in his favour and agreement to sell had been enforced

Filing of civil suit could not vitiate title of landlord unless the same was finally decided

Only those cases could be left to be decided by civil court, where intricate and complicated questions regarding title of immovable property were involved

Neither there was any dispute regarding ownership of landlord nor there was any intricate or complicated question involved about title of leased premises

Tenant had himself admitted that landlord was owner of the premises and he agreed to sell the same to him, there was no need to leave the matter to be decided by civil court

Tenant could not protect his possession over leased house by invoking provisions of S.53-A of Transfer of Property Act, 1882

Tenant failed to point out any illegality or material irregularity or legal or factual infirmity in eviction order passed by Rent Controller

Appeal was dismissed in circumstances.

Stay of legal proceedings could be obtained under S.34 of Arbitration Act, 1940, but in order to invoke such provision, it was necessary that there must be an arbitration agreement in existence; legal proceedings must have been started by a party to the agreement; proceedings must be with respect to matter agreed to be referred to arbitration; application for stay must have been filed before filing written statement or taking any step in proceedings; and party asking for stay must be ready and willing to do all things necessary to proper conduct of arbitration-Application under S.34 of Arbitration Act, 1940, could merit rejection, when in the application there was no averment that applicant was ready and willing to have dispute settled through arbitration

No obligation on court to necessarily refer dispute to arbitration but it gave the court discretion to stay proceedings, if it was satisfied that there was no sufficient reason as to why matter should not be referred to in accordance with arbitration proceedings

Legal proceeding which was sought to be stayed must be in respect of matter which parties had agreed to refer and the same was within the terms of arbitration agreement

Before order for staying of suit could be made under S.34 of Arbitration Act, 1940, it must be established that suit had been instituted in respect of matter agreed to be referred

Where suit had commenced as to the matter which was outside the submission, the court was competent to refuse the stay

Court under S.34 of Arbitration Act, 1940, could stay a suit and could also exercise its jurisdiction to entertain the suit for adjudication of claim of parties containing arbitration clause and could also consider whether exercise of such discretion in particular case would be judicious and reasonable

High Court declined to stay proceedings and directed defendants to file written statements

Application was dismissed in circumstances.

Discretion exercised by Court, judicial and proper-Special Leave to Appeal refused by Supreme Court.