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2006 YLR 1027

LAHORE DEVELOPMENT AUTHORITY through Director-General vs TAUSEEF

Citation2006 YLR 1027
CourtLahore High Court
Judge(s)Mian Saqib Nisar
ResultAppeal disposed of

' MIAN SAQIB NISAR, J.---Respondent No.1/Tauseef Corporation (Pvt.) Limited, moved an application under section 20 of the Arbitration Act, 1940, claiming that there are tripartite agreements, dated 14-9-1995, between itself and the LDA, and a dispute in terms thereof has been arisen between the parties, therefore, such agreement be directed to be filed and the matter be referred to the arbitration, as per the arbitration clause 28 contained therein. This application has been resisted by the appellant, on the ground that the agreements regarding which the relief has been sought under section 20 of the Arbitration Act, since have been cancelled by the LDA, resultantly, the reference cannot be made. It was also pleaded, that the agreements have been unauthorizedly signed on behalf of the LDA, because the LDA has authorized some of its officials to execute the agreements, but had never empowered any representative of the TEPA, to enter into the agreements as to bind the LDA under the same. The learned Civil Judge, framed the following issues:--

(1) Whether the agreement dated 18-7-1994 is void ab initio? OPR

(2) Whether Tauseef Corporation has waived his right to file this application? OPR (2-A) Whether the applicant has no cause of action to bring this application? OPR (2-B) Whether the applicant has not approached this Court with clean hands? OPR (2-C) Whether the agreement was cancelled between the parties on 20-2-1997? OPR (2-D) Whether after completion of project in question and recision of agreement, the instant application is not competent? OPR (2.E) Whether under Clause 28 of disputed agreement, the instant application is not proceedable?

OPR

(3) .Whether the application under section 20 of the Arbitration Act is liable to be accepted on the ground mentioned in the application? OPA

(4) Relief.

' The parties produced their evidence. The respondent Tauseef Corporation, inter alia, brought on the record Exh.A6, one of the tripartite agreements, and it is its claim, that all other agreements regarding which the reference was sought, are identical containing the same stipulations and also the arbitration clause. The learned Civil Judge, on the conclusion of the trial has decided the issues against the appellant. It is submitted by the appellant's counsel, that the findings on the issues are absolutely erroneous, as the learned Court below has transgressed its jurisdiction by assuming the role of the arbitrator and giving decision upon those questions, which were to be decided and sorted out by the arbitrators; it is also contended, that the learned trial Court, in fact has based its entire decision on the agreements dated 18-7-1994 and 18-1-2004, which were not even those for which the arbitration was sought by respondent No.1; these documents have not been tendered in evidence by the respondent, therefore, the reference to the arbitration on the basis of some extraneous agreements is not sustainable.

2. Learned counsel for the appellant has further submitted, that the trial Court while deciding the matter has given findings upon the proposition by concluding that the agreements are valid; those could not be cancelled as pleaded by the LDA; the agreements were authorizedly executed on behalf of the LDA, which findings are absolutely extraneous and illegal, because such dispute envisaged by Issues Nos.l, 2-C, 2-D and 2-E, could exclusively be decided by the arbitrators and the Court while rendering its decision upon an application under section 20 of the Arbitration Act, could not adjudicate the disputes between the parties, falling within the domain of the arbitration. In support of his contentions, reliance has been placed upon the judgments reported as Union of India v. Messrs Chaman Lal Loona & Co. (PLD 1958 SC (India) 1), Pakistan Chrome Mines Ltd. Karachi v. Phibro Asia Ltd., New York and 3 others (PLD 1975 Karachi 861), Manzoor Construction Co. Ltd. v.

University of Engineering & Technology, Taxila (1984 CLC 3347) and Project Director, Balochistan Minor Irrigation and Agricultural Development Project, Quetta Cantt. v. Messrs Murad Ali & Company (1999 SCM R 121).

3. Learned counsel for the respondent, when confronted with the above plea, has expressed no objection, if the findings of the learned trial Court, on Issues Nos.1, 2-C, and 2-E, and/or any other issues, the determination of which falls within the jurisdiction of the arbitrators are set aside and left for the adjudication by the arbitration, because according to him, his client is only interested in seeking the resolution between the parties in terms of the arbitration clause. It is also stated that in the application under section 20, the respondent has asked for the filing of the arbitration agreements between the parties dated 14-9-1995 and the reference to the arbitrators in accord therewith; the other agreements to which Court has mentioned in the impugned order, are almost akin and also contain an identical arbitration clause. But the respondent shall confine its cause to the said agreement and has no objection if any error committed by the Court below in this behalf is corrected.

4. In the light of the above, the findings of the Court below on the Issues Nos.1, 2-C, 2-D and 2-E, are set aside, and by affirming the conclusion of the Court below that the matter should be referred to the arbitration, however, according to the agreement dated 14-9-1995, the appeal is disposed of, with the direction to the parties to appear before the learned trial Court, on 27-2-2006, for the nomination of their respective arbitrators, and the matter shall be accordingly referred to the arbitrators by the Court, within two months. If the Court below has been abolished, as apprehended by the learned counsel for the appellant, the parties shall appear before the learned District Judge, on the aforesaid date, for assigning the matter to any other Court of competent jurisdiction.

' Before parting it may however be observed, that as the third arbitrator named in the agreement has died, and no substitute has been provided in the agreement, therefore, in the case of divergent awards by the arbitrators, nominated by the parties, I appoint Mr. Justice (Retd.) Rashid Aziz. Khan, former Chief Justice of the Lahore High Court, to act as an umpire in the matter. The fee of the umpire shall be determined by this Court, upon a miscellaneous application filed by either of the parties or the umpire.

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