2024 C L C 449
[Balochistan]
Before Gul Hassan Tareen, J
MUHAMMAD QASIM and 2 others ----Petitioners
Versus
MUHAMMAD ISMAIL and others ----Respondents
Civil Revision No.148 of 2022, decided on 8th May, 2023.
Arbitration Act (X of 1940) ---
----Ss. 21 & 34--- Civil Procedure Code (V of 1908), O.XII, R.2--- Arbitration ---Petitioners
were aggrieved of orders passed by Courts below rejecting application made by them under
Ss. 21 & 34 of Arbitration Act, 1940---Validity ---Respondents extended consent for
arbitration through sole arbitrator before Revisional Court during pendency of suit before Trial Court ---Such consent did not operate as estoppel against respondents when petitioners
made an application before Trial Court under Ss. 21 & 34 of Arbitration Act, 1940---Legality of order made by Trial Court under O.XIII, R.2, C.P.C. was under adjudication before Lower Appellate Court, in exercise of revisional jurisdiction--- Trial Court rightly rejected
application of petitioners made under Ss. 21 & 34 of Arbitration Act, 1940--- Provision of S.
34 of Arbitration Act, 1940 was wrongly mentioned in caption of the application--- Court
could only refer matter/differences without consent of all interested parties under S. 21 of Arbitration Act, 1940--- Respondents did not extend consent for arbitration, therefore, Trial
Court rightly exercised its jurisdiction and Lower Appellate Court rightly upheld the same ---
High Court declined to interfere with the orders passed by two Courts below ---Revision was
dismissed, in circumstances.
Project Director University of Loralai and another v. Zarif Khan Hussainzai and
Brothers through Managing Director 2023 YLR 527 and The Imperial Electric Company (Private) Limited through Chief Financial Officer v. Messrs Zhongxing Telecom, Pakistan (Private) Limited through Chief Executive and 20 others 2020 CLC 760 distinguished.
Ahsan Rafiq Rana and Habib Qambrani for Petitioners.
Mir Wais Bazai for Respondents Nos.1 to 15.
Mir Wais Panezai State counsel for Respondents Nos.16 and 17.
Date of hearing: 5th May, 2023.
JUDGMENT
GUL HASSAN TAREEN, J. ----This Civil Revision Petition, filed under section 115,
the Civil Procedure Code, 1908 ('Code') is directed from the concurrent orders passed by the
courts below whereby an application made by the petitioners under sections 21 and 34, the Arbitration Act, 1940 ('Act, 1940') was concurrently rejected.
2. Briefly, facts of the case are that the petitioners instituted a Civil Suit for declaration,
correction of revenue record and perpetual injunction against the respondents in the Court of
Additional Qazi, Kharan ('Trial Court'), in respect of an immovable property, described in para No. 1 of the plaint. Respondents Nos. 1 to 14 and 15 submitted their contesting written statements. During pendency of the suit, petitioners made an application under Order XIII, Rule 2, the Code for placement of documents on record which was rejected by the Trial Court vide order dated 06 February, 2020. Against such order, petitioners filed a Civil Revision Petition before the Majlis -e-Shoora Kharan ('Revisional Court'). During pendency
of the Civil Revision Petition, the parties vide arbitration agreement dated 17 August, 2020 mutually agreed, to refer their differences to a sole arbitrator namely Abdullah Jan. The arbitration agreement was submitted before the Revisional Court and the Court with the consent of parties referred the matter/differences to the said arbitrator. The arbitrator acted in the reference, however, on 25 December, 2020, he submitted his report before the Revisional
Court that, since respondents have requested for return of their case to the Court, therefore,
he has returned the reference without making the award. The petitioners made an application for re -referring the matter to the said arbitrator. The Revisional Court vide order dated 18
February, 2020 rejected the application of the petitioners for making direction to the sole arbitrator to make an award. The petitioners did not further impugn the order of the Revisional Court which attained finality.
3. The petitioner again made an application under sections 21 and 34, the Act, 1940
before the Trial Court for making an arbitration reference to the said sole arbitrator. The application was contested and the Trial Court vide impugned order dated 27 May, 2021 rejected the application. Petitioners impugned such order in an appeal preferred under section 39, the Act, 1940 before the Court of Majlis -e-Shoora, Kharan ('Appellate Court') in Civil
Appeal No. 34/2021. The Appellate Court, after hearing both sides vide impugned order dated 22 December, 2021 dismissed the appeal.
4. M/s Ahsan Rafiq Rana and Habib Qambrani, learned counsel for the petitioners
submit that the respondents, during pendency of the Civil Revision Petition before the Revisional Court, extended consent vide arbitration agreement dated 17 August, 2020 for determination of their differences by a sole arbitrator; therefore, they could not have backed out from their consent on the doctrine of estoppel. They submit that the Courts below overlooked the said doctrine and, therefore, committed material illegality. They placed reliance on the following case laws:
Project Director University of Loralai and another v. Zarif Khan Hussainzai and Brothers through Managing Director 2023 YLR 527
The Imperial Electric Company (Private) Limited through Chief Financial Officer v. Messrs Zhongxing Telecom, Pakistan (Private) Limited through Chief Executive and 20 others 2020 CLC 760
5. On the other hand, Mr. Mir Wais Bazai, learned counsel for the respondents Nos. 1 to
15 submits that when the sole arbitrator returned back the reference to the Revisional Court
without making any award, the petitioners made an application to the Revisional Court for again referring the reference to the said arbitrator which was rejected and, the same attained finality, as petitioners did not impugn the said order before this Court. He submits that
during pendency of a suit, a Civil Court cannot, without the consent of all interested parties,
refer the parties to arbitration. The learned counsel referred to section 21, the Act, 1940 and
finally submits that impugned orders are concurrent whereas petitioners' counsel failed to highlight any error of jurisdiction in the orders.
6. Heard. Record perused.
7. It is the main contention of petitioners' counsel that since respondents extended
consent for referring the differences to the sole arbitrator during pendency of a Civil Revision Petition before the Revisional Court vide arbitration agreement dated 17 August, 2020; therefore, they could not have backed out from their consent, whereas the Courts below overlooked it. Perusal of record also suggests as such, however, the respondents extended consent and the Revisional Court with their consent referred the differences to the said sole arbitrator when suit was spending before the Trial Court. The said Civil Revision Petition was preferred by the petitioners from an order passed by the Trial Court, whereby their application under Order XIII, Rule 2, the Code was rejected. Section 21, the Act, 1940, incorporates terms 'suit' and 'Court' in its text which is reproduced hereunder:
"21. Parties to suit may apply for order of reference.- where in any suit all the parties
interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in
writing to the Court for an order of reference."
The term 'suit' has not been defined in the Act, 1940; however, term 'suit' in section
21 is used in wider sense and also includes an appeal and a civil revision. Likewise, the term 'Court' though, defined separately in section 2(c), the Act, 1940, as a Civil Court, however, term Court also include an Appellate Court as well as a Revisional Court. Hence, apart from a Civil Court (during pendency of a suit), an Appellate Court during pendency of appeal and a Revisional Court during pendency of Civil Revision petition, are also competent to refer to the arbitrator matter in difference under sections 21 and 23, the Act, 1940. And when a party extends consent for reference of differences to arbitrator(s) before any of above mentioned Courts, then such party could not be allowed to resile from its consent unless an award, becomes void under section 16(3) or has been set aside and Court supersedes the reference under section 19, the Act, 1940. In such situation, the Court shall order that the arbitration agreement shall cease to have effect with respect to the difference referred.
8. However, the term 'Court' used in section 21, the Act, 1940 does not include an
Appellate Court/Revisional Court when a Civil Suit is still pending before the Court of first instance i.e. Civil Court. During pendency of a Civil Suit, parties normally approached to an Appellate Court in Appeal or to a Revisional Court in Civil Revision but in such situation, the Appellate and Revisional Court are not included in the definition of 'Court' for the purpose of section 21, the Act, 1940. During pendency of suc h an appeal or revision (when
suit is pending in the Court of first instance) and parties agree for an arbitration, then they
should have to approach the Court of first instance by making an application under section 21, the Act, 1940. Though the said Appellate/ Revisional Court during pendency of Civil Suit may, with consent of parties, refer the differences to arbitrator(s), however, such consent of any party cannot be construed as an estoppel against the consenting party and such consent
cannot be taken for the purpose of section 21, the Act, 1940.
9. In the instant case, the respondents extended consent for arbitration through a sole
arbitrator before the Revisional Court during pendency of the suit before the Trial Court,
therefore, such consent does not operate as estoppel against them when petitioners made an application before the Trial Court under sections 21 and 34, the Act, 1940. The contention of petitioners' counsel is, therefore, misconceived because before the Revisional Court, the legality of an order made by the Trial Court under Order XIII, Rule 2, the Code was under adjudication. The case laws cited at Bar by petitioners' counsel are not relevant to the peculiar facts and circumstances of the instant case.
10. The Trial Court has rightly rejected the application of the petitioners made under
sections 21 and 34, the Act, 1940. Though the provision of section 34, the Act, 1940 was wrongly mentioned in the caption of the application, however, under section 21, the Act, 1940, the Court can only refer the matter/differences without the consent of all interested parties. Since, respondents did not extend consent for arbitration, therefore, the Trial Court has rightly exercised its jurisdiction and the Appellate Court vide impugned order, has rightly upheld the same.
11. Yet this case has an important aspect too. During pendency of the Civil Revision
Petition, when the sole arbitrator filed his report showing his inability to make an award, the petitioners made an application to the Revisional Court for re -referring the matter to the said
arbitrator, however, the Revisional Court rejected said application vide order dated 18 February, 2020 and observed that the arbitrator is no more ready to conduct the arbitration. The petitioners failed to impugn such order, as such, it attained finality. Therefore, on this count too, the later application of the petitioners before the Trial Court was not competent without the consent of the respondents.
For afore discussion, I am not inclined to interfere with the impugned orders. As such,
the instant Civil Revision Petition is dismissed with no order as to costs.
MH/144/Bal. Revision dismissed.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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