2020 C L C 1300
[Balochistan]
Before Rozi Khan Barrech, J
CANTONMENT BOARD QUETTA through Cantonment Executive Officer ----
Appellant
Versus
Messrs MUHAMMAD RAHIM KHAN & Co. through Managing Partner----
Respondent
Civil Miscellaneous Appeal No.12 of 2015, decided on 27th December, 2019.
Arbitration Act (X of 1940) ---
----S.34 ---Contract containing arbitration clause ---Dispute with regard to implementation of
contract ---Stay of proceedings ---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 c lause ---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 arbi tration 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.
Sqd. Ldr. (R) Khurram Zaman v. Mrs. Afia Zafar 2008 CLD 662; Muratab Ali v.
Liaqat Ali 2004 SCMR 1124 an d Dar Okaz Printing and Publishing Limited Liability
Company v. Printing Corporation of Pakistan Private Limited PLD 2003 SC 808 rel.
Syed Iqbal Shah, Deputy Attorney- General ("DAG") for Appellant.
Muhammad Akram Shah for Respondent.
Date of hearing: 1s t October, 2019.
JUDGMENT
ROZI KHAN BARRECH, J. ----This appeal is directed against the order dated
08.07.2015 (hereinafter "the impugned Order") passed by the learned Judicial Magistrate -
IX/Civil Judge, Quetta, (hereinafter "the trial Court") whereby appl ication filed by the
appellant under section 34 of Arbitration Act, 1940 ("the Act") was dismissed.
2. The brief and essential facts leading to the present appeal are that the bids offered by
the plaintiff/respondent, a registered firm, for construction of Jinnah Shopping Mall Quetta
Cantt was accepted by the appellant/defendant's department dated 29.10.2010. This was
followed by an agreement between the parties ("the Agreement"), however, certain grievances of the plaintiff/respondent arose and it institut ed a suit for recovery of
Rs.4,82,64,240.88 against the appellant/defendant, disputing therein measurement process of the work done, preparation of wrong bill, deduction of certain due amount and security of the plaintiff/respondent deposited with the appe llant/defendant in connection of the work.
3. The appellant/defendant, when put to notice, before filing his written statement filed
an application under section 34 of the Act soliciting therein that the matter may be sent to the Arbitrator for carrying arbitration proceedings, in view of clause 45 of the Agreement. The said application was contested by the plaintiff/respondent by filing a replication thereto.
4. The learned trial Court after hearing both the parties, dismissed the application of the
appellant/defendant dated 08.07.2015. Hence this appeal.
5. I have heard the learned counsel for the parties and have gone through the available
record with their able assistance. It is apparent from the record that the parties had entered
into the Agreement, which clearly provides clause 45 of the Agreement for arbitration, which reads as under: -
"If any dispute or difference of any kind whatsoever shall arise between the
Cantonment Board and the contractor in connection with or arising out of the contract or the carrying out of the work (whether during the progress of the work or after their completion and whether before or after the termination, abandonment or breach of the
contract) by the mutual consent of owner and contractor shall be referred to and settled by the Director Military Lands and Cantonments Quetta Region who calling on the advice of the consultant within a period of 90 days after being requested by ei ther
party to do shall give written notice of his decision to the owner and the contractor. Save as hereinafter provided such decision in respect of every matter so referred shall be final and binding upon the owner and the contractor until the completion of the
work and shall forthwith be given effect to by the contractor who shall precede with works with all due diligence".
6. Surely, the 'disagreement' or 'dispute' between the parties has arisen out of the
Agreement for execution of works, which under cl ause 45 was mandated to be referred to
Arbitration in the manner and mode provided by the said clause. However, the plaintiff/respondent instead of adopting the said mandatory recourse, resorted to institute a civil suit for recovery of certain amount on t he basis of a different stance contrary to the
stance of the defendant/appellant. The plaintiff/respondent was under obligation to have resorted to the proceedings to be carried out by the Arbitration for resolution of the
controversies , as per clear term s and conditions of clause 45 of the Agreement.
7. There is no allegation that the Agreement containing the above Arbitration clause was
executed under duress, undue influence or on account of any misrepresentation on the part of
defendant/appellant at the time of its execution. The arbitration clause clearly and
unequivocally provided that all disputes between the appellant and contractor will be referred to the Director Military Lands and Cantonment Quetta Region who shall be the sole arbitrator and his decision would be final and binding on the parties. The plaintiff/respondent having entered into the contracts voluntarily which contained the arbitration clause, could not be allowed to avoid the arbitration agreement lightly. Thus, the learned trial Court , therefore,
was not justified in rejecting the application under section 34 of the Act filed by the appellant/defendant.
8. As far as the argument of the learned counsel for the plaintiff/respondent that
appellant/defendant sought adjournments before fili ng the application for referring the matter
to arbitration, the same is not in consonance with the facts of the present case. The record reveals otherwise. Notice was served on 08.06.2015 and application for arbitration was filed by the appellant/defendant on 15.06.2015. Hence, the said application can hardly be said to
be delayed. Reliance may be placed on Sqd. Ldr. (R) Khurram Zaman v. Mrs. Afia Zafar 2008 CLD 662, Muratab Ali v. Liaqat Ali 2004 SCMR 1124 and Dar Okaz Printing and Publishing Limited Liabi lity Company v. Printing Corporation of Pakistan Private Limited
PLD 2003 SC 808.
9. In view of the above, the order dated 08.07.2015 passed by learned Judicial
Magistrate -IX/Civil Judge, Quetta, is set aside and the application filed by the
appellant/defe ndant under section 34 of the Act is accepted and the proceedings before the
learned trial Court in Civil Suit No.60 of 2015 is hereby stayed, adjourned 'sine die' and the matter is hereby referred to the Arbitrator for decision.
ZC/43/Bal. Appeal allowed .This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
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