' ARSHAD NOOR KHAN, By this High Court Appeal the appellant has challenged the judgment dated 10-9-2007 and decree, dated 19-9-2007 passed by the learned single Judge in Suit No,407 of 2007 Mr. Holger Hahn v. Comset Services Limited and other whereby the suit filed by respondent No,1 for declaration, permanent injunction and damages has been decreed.
2. Facts giving rise to the present appeal in brief are that in pursuance of service agreement Ex.P- 1/2 executed in between the appellant and respondent No,1, the respondent No,1 was appointed as Chief Operating Officer (COO) by the appellant a company incorporated in Jebel Ali Offshore Zone, UAE on 1-1-2005 to introduce and promote the Scheme of Hero Pakistani. It was also agreed in between the parties that the respondent No,1 will be paid 180,000 US$ per annum in monthly installment of 15,000 US$ as well as 100,000 US$ towards Housing Allowance. It was also condition precedent to the agreement that the respondent No,1 will be entitled to the afore-stated remuneration till the date when the company achieves the cash flow trigger and the month when the loan is paid and the company achieves trigger date, the respondent No,1 will be entitled to actual salary to the tune of US$ 280,000 as well as Annual Housing Allowance to the tune of US$ 100,000 over and above the initial Housing Allowance to the tune of US$ 1,00,000 etc. It was also agreed in between the parties that in case of termination of services of respondent No,1, prior notice of 12 months should be served on him and in case of non-service of notice of termination he will he entitled to 12 months salary. In pursuance of service agreement the respondent No,1 started performing his duties in the office of appellant at Karachi. It is further stated in the plaint that respondent No,2 was subsequently appointed by the appellant, who started interference in the working of the respondent No,
1. In the month of December, 2006 the respondent No,1 gone to his home country and to his utter surprise he received letter dated 26-12-2006, Exh.P-1/9 whereby the services of the respondent No,1 were terminated with immediate effect, without assigning any reason. It is further stated in the plaint that the respondent No,1 served notice on the appellant claiming therein the full salary and allowances as no prior notice for 12 months was served on him and also contended that by virtue of clause 5.8 of service agreement the date of termination of services of the respondent No,1 would be treated as trigger date and he will be entitled to actual salary and allowances. The said notice was not responded by the appellant therefore the respondent No,1 filed suit for recovery of service allowance and damages against the appellant to the tune of 691,999/92 US$.
3. The notice of the suit had- been served on the appellant and respondent No,2 who appeared and filed separate written statements.
4. The appellant and respondent No,2 in their written statement challenged the maintainability of the suit on the ground that the suit was not maintainable as the parties had agreed to submit to non-exclusive jurisdiction of English Courts and therefore this Court did not have jurisdiction. It was further stated that the relationship in between the parties was that of 'master and servant', therefore no discretionary relief could be claimed by respondent No,
1. It was further stated in the written statement that respondent No,1 cannot claim specific performance of the said agreement under the provisions of Specific Relief Act and, in case, of any alleged breach of the contract, the only right which survived to respondent No,1, was to claim the damages. It was further stated in the written statement that there existed no legal character in favour of the respondent No,1 as required under section 42 of the Specific Relief Act, as such the suit for declaration and consequential relief was also not maintainable. They, however, admitted the execution of the said agreement in between the parties and appointment of respondent No,1 as COO and had stated that respondent No,1 was entitled for full payment after the achievement of the trigger date and since at the time of the' termination of the services of the respondent No,1, the trigger date had not been achieved, as such the respondent No,1 was not entitled for any full dues for which the respondent No,1 was entitled after achievement of the trigger date. It was further stated in the written statement that colossal loss of reputation etc. Was not sustained by the respondent No,
1. It is further stated in the written statement that because of nefarious activities of respondent No,1, his services were terminated in accordance with the terms and conditions of the said agreement, as such the respondent No,1 is not entitled for any relief.
5. On the basis of the above pleading the following issues were framed:---
(i) Whether suit as filed by the plaintiff is maintainable under the law or in term of clause 18.3, if not its effect?
(ii) What is the agreed applicable law and its effect for the resolution of disputes between the parties under the terms of Employment Agreement?
(iii) Whether the plaintiff has not any cause of action against the defendant No,2 under the facts and circumnutates of the case? If not, its effect?
(iv) Whether the plaintiff as COO of the defendant No,1 was acting in bad faith and/or against the interest of the defendant No,1? If yes, what was the powers available to the employer (defendant No,1) under the Employment Agreement dated 1-1-2007?
(v) Was the purported termination of the plaintiff's employment as effectuated legal?
(vi) Was the action taken by the defendants against the plaintiff mala fide in the circumstances of the case?
(vii) Has the triggering cash flow commenced in terms of the Employment Agreement dated 1-1- 2005, and if so, since when, and what is its effect?
(viii)To what amount, if any, is the plaintiff contractually entitled upon termination of his employment by the defendant?
(ix) To what amount of damages, if any, is the plaintiff entitled due to his removal from service, as effectuated?
(x) What should the decree be?
6. After framing the issues, the parties led their evidence in pro and contra to their respective claims and have produced series of documents in support of their claim. The learned Single Judge after hearing the learned counsel for the parties decreed the suit as prayed. The appellant being aggrieved and dissatisfied with the judgment and decree, has preferred this appeal.
7. We have heard Mr. Abid S. Zuberi, Advocate for the appellant and Mr. Yousuf Ali Sayeed, Advocate for respondent No,l.
8. Mr. Abid S. Zuberi, learned counsel for the appellant, vehemently contended that the service agreement Ex.P-1/2 provides nonexclusive jurisdiction to English Court in case of any dispute arising between the parties by virtue of clause 18.3 of the said agreement and in view of section 28 of the Contract Act, the Courts or Tribunal in Pakistan had no jurisdiction to proceed with the case in between the parties, as such the learned Single Judge possessed no jurisdiction to entertain and adjudicate upon the suit. He further contended that in view of sections 16 to 20, C.P.C., the jurisdiction of the Courts in Pakistan is ousted and the parties could only approach the Courts in Pakistan with the prayer for temporary injunction and respondent No,1 has claimed the service benefits as well as damages which is fully hit by clause 18.3 of the said agreement. According to him, the learned Single Judge possessed no jurisdiction to proceed with the matter, as such the judgment and decree passed by the learned Single Judge are coram non judice which could not be executed in view of ouster of the jurisdiction of Local Courts or Tribunals under clause 18.3 of the agreement. He further contended that since the parties have voluntarily chosen the specific forum for redressal of their grievances, as such no other forum .Could be approached by either parties to the said agreement, therefore the suit filed by the respondent No,1 was filed malafidely to defeat non-exclusive jurisdictional clause of the service agreement Exh.P.1/2. He further contended that the learned Single Judge did not read the evidence in its true perspective and because of misreading of evidence available on record, the judgment and decree has been passed against the appellant. He further contended that by virtue of clause 13.1(c) which is the termination clause of the services of respondent No,1, he was not entitled to claim any damages, as such the learned Single Judge travelled beyond the terms and conditions of the service agreement Exh.P.1/2. He further contended that in view of clause 5.3 of the service agreement, the trigger date of cash flow had not accrued, therefore neither the appellant was responsible for payment of full service benefits to respondent No,1 including the full housing allowance, nor the. Respondent No,1 was within his right to claim the same in view of the aforesaid clause of the service agreement. The learned counsel for the appellant further contended that the evidence as well as the law involved in the case has not been appreciated by the learned Single Judge and the judgment and decree being coram non judice, are liable to be set aside. In support of his contentions regarding maintainability of the suit, he has relied upon the case of Saba Shipyard (Pakistan) Limited v.
Islamic Republic of Pakistan and another reported case in 2003 Lloyd's Law Reports 571, the case of Masood Asif and others v. United Bank Limited reported in 2001 CLC 479, the case of HIT Entertainment Limited and others v. Gaffney International Licensing (Pvt.) Limited and another reported in 2007 EWHC 1282 (Ch), the case of Tradesmen International (Pvt.) Limited v. Federation of Pakistan and another reported in 2005 MLD 541 and also reported in 2008 CLC 1618, the case of Messrs Eckhardt and Co. Marine GmbH v. Muhammad Hanif reported in PLD 1993 SC 42 and the case of CGM (Companies General maritime) v. Hussain Akbar reported in 2002 CLD 1528.
9. Mr. Yousuf Ali Sayeed, learned counsel for respondent No,1 while refuting the arguments advanced on behalf of the appellant, has vehemently contended that the non-exclusive jurisdictional clause in the service agreement Ex.P-1/2 does not oust the jurisdiction of the Court because the consent of the party cannot oust or confer jurisdiction on the Court. He further contended that the services of respondent No,1 were terminated without affording of an opportunity of being heard to him, as such the principles of natural justice have been violated by the appellant while terminating the services of respondent No,
1. He further contended that section 28 of the Contract Act neither applies under the peculiar circumstances of the present case, nor reflects on the exclusive jurisdiction of the Courts of Pakistan. He further contended that by virtue of clauses 5.3, 5.4 and 5.7, of the service agreement, the respondent No,1 is entitled to claim the actual salary and benefits as if the trigger date has commenced in view of clause 5.8 of the agreement, as such the claim of respondent No,1 has been properly considered by the learned Single Judge on the basis of the evidence on record and no material illegality or irregularity is apparent on the face of the record so as to interfere in the judgment and decree passed by the learned Single Judge and the appeal is liable to be dismissed with costs.
10. In support of his contention, he has relied upon the case of 'The Fehmarn' reported in 1958 ALL ER 333, the case of M.A. Chowdhury v. Messrs Mitsui O.S.K. Lines Ltd. And 3 others reported in PLD 1970 SC 373, the case of Messrs Mercantile Fire and General Insurance Co. Of Pakistan Ltd., Karachi v.
Messrs Arcepey Shipping Co. U.S.A. And another reported in PLD 1978 Kar. 273, the case of Far East Steamship Line and others v. The Union of India reported in AIR 1973 Mad. 169 (V 60 C 52), the case of The Black Sea Steamship U.L. Lastochkina Odessa and another v. The Union of India reported in AIR 1976 Andhra Pradesh 103, the case of CGM (Compagnie General Maritime) v. Hussain Akbar reported in 2002 CLD 1528 and the case of Light Industries (Pvt.) Ltd. Through Director v. Messrs ZSK Stickmaschinen GmbH and another reported in 2007 CLD 1324.
11. We have examined the case in the light of the arguments advanced on behalf of the parties and have gone through the entire evidence available on record as well as the case-law relied upon by the learned counsel for the parties.
12. From the arguments of the learned counsel for the parties, it transpires that both the learned counsel for the parties have limited their arguments to the maintainability of suit as well as the entitlement of respondent No,1 regarding his claim of service benefits and damages, as such from their arguments, the following points have been spelt out for determination:---
(i) Whether the learned Single Judge possessed jurisdiction to proceed with the suit in view of clause 18.3 of the service agreement which provides non-exclusive jurisdiction and the parties agreed to refer their disputes to English Court?
(ii) Whether the services of respondent No,1 were illegally terminated thereby entitling him to claim the trigger date as the date of issuance of termination letter which entitled him to the actual pay and allied benefits in full in view of clause 5.7 of the service agreement?
13. In view of the arguments advanced by the learned counsel for the parties, we propose to discuss the point No,1, supra, on the point of non-exclusive jurisdiction of the English Courts as envisaged in clause 18.3 of the said agreement Exh. P. 1/2. Clause 18.3 provides that this agreement shall be governed by and interpreted in accordance with English law and parties hereby irrevocably submit to the non-exclusive jurisdiction of the English Courts, except that a party may seek an interim injunction in any Court of competent jurisdiction. Clause 18.3, therefore, provides non-exclusive jurisdiction to the English Courts but the fact remains that the said agreement Ex.P- 1/2 has been executed in Pakistan, therefore the said agreement is subject to the scrutiny under the law of the land. The non-exclusive jurisdictional clause agreed in between the parties, in our humble opinion, does not oust the jurisdiction of the local Courts, nor the consent of the parties may confer jurisdiction to a Court which actually has no jurisdiction to entertain and decide the lis amongst the parties. The said point regarding non-exclusive jurisdiction of Courts of country has been elaborately dealt with by the Honourable Supreme Court in a very famous case of M.A.
Chowdhury reported in PLD 1970 SC 373 wherein the similar controversy was involved in between the parties. The facts of the case of M.A. Chowdhury, supra, were that there was condition in the bill of lading that the parties to the said bill of lading will refer their dispute to the Courts outside the Pakistan and in pursuance of the said bill of lading, the goods were imported by the .Three different appellants which were short of imported goods. Subsequently three separate suits were filed in different Courts and were decided separately by the Civil Court at Dacca, the then East Pakistan and the point raised in all the three suits filed separately was that in view of the condition specified in the bill of lading, jurisdiction of the local Courts ousted and the jurisdiction being non-exclusive jurisdiction accepted by the parties, comes into play and the foreign/English Court/Tribunal possess absolute jurisdiction to entertain and adjudicate upon the dispute amongst the parties.
The Civil Judge, Dacca vide his separate orders in all the suits rejected the claim of the appellants holding that in view of condition in the bill of lading, the English Courts had jurisdiction to entertain and adjudicate upon the dispute amongst the parties. The view expressed by the Civil Court was also endorsed by the then East Pakistan High Court and the matter came up before the Honourable Supreme Court. The Honourable Supreme Court granted leave to consider the point as to whether the local Courts, in view of the consent of the parties, lack the jurisdiction to entertain and decide these matters in between the parties as the view of the West Pakistan High Court was otherwise and in view of the conflicting views of both the High Courts of Pakistan, the Supreme Court after examination of the case-law of the country as well as case-law from Indian, English, U.S.A. Etc. Jurisdiction and after analyzing the provisions of section 28 of the Contract Act, disapproved the view of the East Pakistan High Court and while repelling the view of East Pakistan High Court, was pleased to observe as under:--- "In this view of the matter, in spite of the consistent, decisions of the High Court of East Pakistan, I have with utmost respect, to hold that these decisions have diverted the law of the country into a wrong channel and must, therefore, be overruled."
14. The Honourable Supreme Court in the case of M.A. Chowdhury (supra) while disagreeing with the view of the East Pakistan High Court, was of the view that the jurisdiction of the local Courts was not ousted despite the fact that the parties agreed to submit themselves before the jurisdiction of the English Court, however, in case, if there is arbitration clause in the agreement, the matter may be referred for arbitration proceedings. The dictum laid down by the Honourable Supreme Court in the case of M.A. Chowdhury (supra) is further reproduced herein below for the sake of convenience:-- "Having said this, however, I am of the opinion that in order to preserve the sanctity of contracts I ought also to hold, as was done in the earlier cases in Great Britain that such foreign jurisdiction clauses, even when they purport to give jurisdiction to a Court in a foreign country, are really in the nature of arbitration clauses which come within the exceptions to section 28 of the Contract Act and, therefore, should be dealt with in the same manner as other arbitration clauses. In the case of an arbitration it has to be remembered that the jurisdiction of the Courts is not altogether ousted, for, the Courts merely stay their hands to allow the parties to resort to the form of adjudication to which they have previously agreed. By only staying the actions before them the courts still retain to themselves the jurisdiction to resume the case if the arbitration, for any reason, fails or the parties find it impossible to comply with the form of adjudication to which they had agreed. This was also the view taken in the case of Malik Ali Akbar, which I approve."
15. While examining the scope of section 28 of the Contract Act, the Honourable Supreme Court was further pleased to observe as under:--- "The contention of the learned counsel supporting the decisions of the Dacca High Court that such foreign jurisdiction clauses are not hit by the main provisions of section 28 of the Contract Act, as, they are neither opposed to the public policy nor amount to an absolute ouster of jurisdiction of "ordinary tribunals" within the meaning of the section, is a little difficult to accept. I cannot persuade myself that "ordinary legal proceedings" and "ordinary tribunals" referred to in that section embrace the proceedings under different systems that may be prevalent in the foreign Courts also such foreign Courts themselves, merely because a foreign judgment may be enforced by a suit in our own Courts. This can be done even where the foreign judgment has been delivered in a case where there is no contract containing such a clause. The legal proceedings and tribunals referred to in section 28 of the Contract Act can only mean legal proceedings and tribunals known to the Legislature as "ordinary tribunals" in the country and the usual proceedings available in these Courts."
16. The view expressed by the Honourable Supreme Court in the case of M.A. Chowdhury (supra) has consistently been followed in a series of cases decided by the High Courts and is also binding on this Court. The same view has also been expressed by the Madras High Court in the case of Far East Steam Shipping Company, supra, as well as by the High Court of Andhra Pradesh in the case of Black Sea Steamship, supra. We are therefore of the considered opinion that the dictum laid down by the Honourable Supreme Court in the case of M.A. Chowdhury is full applicable under the circumstances of the present case and invested the Local Courts with powers to entertain and adjudicate upon the matters which are also subject to the non-exclusive jurisdiction of the foreign Courts, after examination of section 28 of Contract Act and case law of Superior Courts including foreign Courts.
17. The learned counsel for the appellant has heavily placed reliance on the case of Saba Shipyard Pakistan Limited, supra, but in our humble opinion the case of Saba Shipyard is not applicable under the peculiar circumstances of the present case for the reason that in the case of Saba Shipyard there was an arbitration clause in the agreement executed in between Saba Shipyard and K.E.S.C. And the Government of Pakistan acted as guarantor to the said agreement, subsequently the K.E.S.C. Defaulted and the Government of Pakistan filed suit for injunction against Saba Shipyard at Islamabad wherein the Senior Civil Judge had granted stay and it was pleaded before the Senior Civil Judge, Islamabad that the agreement provides non-exclusive jurisdiction and confers jurisdiction to English Courts but after some proceedings in the civil suit, the Saba Shipyard filed proceedings in the English Court at England, therefore, after considering the law of England and the fact that the contract between the parties provides a non-exclusive clause in the sense that in the case of breach of the contract from either party, they may commence proceedings and submit themselves to the jurisdiction of the Court in England and that since Government of Pakistan have submitted to the jurisdiction of the English Court, therefore the English Court possess jurisdiction to entertain and adjudicate upon the matter which is not the position involved in the present case as none of the parties has submitted to the jurisdiction of the English Court by virtue of non-exclusive clause of the agreement nor the said agreement Ex.P-1/2 bears any arbitration clause. Even otherwise, in our humble opinion, as discussed above, whenever a Court or Tribunal has been invested with the jurisdiction to entertain and adjudicate upon the lis in between the parties, the consent of the parties could not oust the jurisdiction of the said Court or Tribunal similarly, in case, if a Court or Tribunal possess no jurisdiction to entertain the lis and adjudicate upon it, the consent of the parties could not confer jurisdiction in such Court or the Tribunal which otherwise possess no jurisdiction to-decide the said lis and the lis in between the parties could be governed under the law of the land and the law of the land could not be brushed aside or ignored because of the consent of the parties which consent, in our humble opinion, could not be termed to be lawful in view of the provisions of the Contract Act. In case any authority is needed, reference may be had to the case of Pir Sabir Shah v. Shah Muhammad Khan, Member Provincial Assembly N.-W.F.P. And another reported in PLD 1995 SC 66, the case of Ali Muhammad and others v. Muhammad Shafi and others reported in PLD 1996 SC 292, the case of Mst. Rashida Begum v. Mst. Aisha Bibi and others reported in 1979 CLC 509, the case of Haji Muhammad Asghar v. Malik Shah Muhammad Awan and another reported in PLD 1986 SC 542, so also case of Muhammad Ramzan and 2 others v. Noor Muhammad and 4 others reported in PLD 1987 Lah:268, wherein it has been constantly held that the question of jurisdiction being very important and fundamental in nature, if a forum had no jurisdiction the same cannot be conferred upon it by consent of the parties. The case-law on this point relied upon by the learned counsel for the appellant, in our humble opinion, does not speak about the proposition involved in the present case and is contrary to the view expressed by the Honourable apex Court in the case of M.A.
Chowdhury (supra). In our humble, the ratio decidendi of the case of M.A. Chowdhury is fully applicable to the circumstances of the present case and we observe that the learned Single Judge rightly entertained and adjudicated upon the matter and the judgment and decree in any way could not be termed to be corum non judice.
18. We are also oblivious of the fact that by non-exclusive clause in the agreement, the parties have to submit themselves at the mercy of the foreign Courts and the case is required to be proceeded under the law of land of that country which has been given non-exclusive jurisdiction which may be highly expensive for the parties qua the payment of Court fee payable in that country as well as the law applicable to that country besides the difficulties and inconvenience to the parties and their witnesses on one hand and on the other hand the statute and the law of the land has either been rendered ineffective or dormant which could not be allowed merely at the option of the parties to submit themselves before the foreign Court thereby reposing no confidence in the local Courts which trend could not be approved and the Honourable apex Court has also taken serious view of the said fact in the case of M.A. Chowdhury (supra).
19. Now we revert to the second point of entitlement of respondent No,1 regarding payment of the actual service benefits. Both the parties have heavily relied upon the terms and conditions of the agreement Exh.P.1/2 in support of their contentions. The learned Single Judge has also referred the whole terms and conditions of the service agreement Exh.P.1/2 in the impugned judgment therefore we do not want to in cumber this judgment by referring to all the terms and conditions of the said agreement but will discuss only those clauses of the agreement on which the parties have heavily relied upon namely clauses 2.2, 5.1, 5.2, 5.3, 5.4, 5.7 and 5.8 and we propose to examine these clauses of the agreement to determine the respective assertions and claims of the parties.
20. The appointment of respondent No,1 is provided under clause 2.1 of the agreement and by virtue of clause 2.2 the effectiveness of the service agreement and date of signing of the agreement coupled with the condition regarding termination of the services of respondent No,1 are provided which in the case of termination by either party requires not less than 12 months notice in writing.
By virtue of clause 5.1 of the agreement the remuneration/salary payable to respondent No,1 was 1,80,000 US$ per annum subject to clauses 5.3 and 5.4 and the said salary shall accrue from day to day and will be payable by equal monthly instalments of 15,000 US$ in arrears normally on first day of each calendar month and by virtue of clause 5.2 the respondent No,1 being Executive of the firm was entitled to 1,00,000 US$ as housing allowance per annum payable in equal monthly instalments of 8333.33 US$ with salary and by virtue of clause 5.3 of the service agreement, with effect from the month when the company achieves the triggering cash flow/trigger month, the company will pay the salary to respondent No,1 at the rate of 280,000 US$ per annum and the said salary is payable in equal monthly instalments of 23,333 US$ in arrears normally on the first day of each calendar month and first such payment shall be paid on the first day of second month following the trigger month. Any payment made to the Executive on the payment date under this clause shall also be in respect of additional salary owed to the Executivc in respect of trigger month. The respondent No,1 (Executive) will, therefore, receive a payment of 31,666 US$ on the payment date subject to clause 5.4 and by virtue of clause 5.4 no salary payment above 15.000 US$ per month shall be paid to the Executive in respect of any month if the notional payment of such additional salary in the month which has given rise to the potential additional salary payment under clause 5.3 (the 'relevant salary month') would cause the company to no longer be in positive cash flow for the relevant salary month. By virtue of clause 5.7, with effect from the trigger date the respondent No,1 (Executive) will be entitled to receive a further 100,000 US$ from the company in respect of housing allowance payable monthly in 12 equal instalments normally on the first day of each calendar month and clause 5.8 provides the termination clause and by virtue of it if the employment is terminated for any reason prior to full receipt by the Executive of the total sums specified in clauses 5.5 and 5.7, any outstanding amounts shall be paid by the company to the Executive in one lump sum payment within 14 days of the date of termination of the employment.
21. The terms and conditions of the service agreement, therefore, provide that initially the respondent No,1 will be entitled to the remuneration/salary by virtue of clause 5.1 and on the date on which the company achieved trigger cash flow, the salary of the respondent No,1 was payable under clause 5.3 of the service agreement and admittedly services of respondent No,1 were terminated by the appellant vide letter Exh.P.1/9 dated 26-12-2006 and a perusal of the termination letter shows that no reasons were assigned by the appellant while terminating the services of respondent No,
1. The contents of termination letter Exh.P.1/9 are usefully quoted here in below for the sake of convenience:-- "Dear Holger, ' Unfortunately, due to the current situation, Comset no longer requires your services and your employment is terminated effective immediately. Please accept our best wishes for your future success."
22. Admittedly respondent No,1 was appointed as COO on 1-1-2005, as such the respondent No,1 worked with the appellant for a period of about 2 years and by that time the trigger date regarding achievement of cash flow was not achieved. The respondent No,1 on receipt of termination letter filed the present suit claiming therein the actual salary and allied allowances and as per learned counsel for respondent No,1 on termination of the services of the respondent No,1, it will be deemed that the trigger date was achieved. At this point it will be relevant to reproduce tit_ provisions of clauses 5.1 to 5.9 dealing with remuneration, which are as under:-- 5.1 "The company shall pay to the Executive a salary at the rate of $180,000 per annum (subject to clauses 5.3 and 5.4). The salary shall accrue from day to day and will be payable by equal monthly instalments of $15,000 in arrears normally on the first day of each calendar month.
5.2 The Executive shall also be entitled to receive a house allowance of $100,000 per annum payable in equal monthly instalments of $8,333.33 with salary.
5.3. Subject to clause 5.4, with effect from the month in which the Company achieves a Triggering Cash Flow (the "Trigger Month) the Company will pay to the Executive a salary of $280,000 per annum. The salary shall accrue from day to day and will be payable by equal monthly instalments of $23,333 in arrears normally on the first day of each calendar month. The first such payment shall be paid on the first day of the second month following the Trigger month (the "Payment Date"). Any payment made to the Executive on the Payment Date under this clause shall also be in respect of the additional salary owed to the Executive in respect of the Trigger month. The executive will therefore receive a payment of $31,666 on the Payment Date subject to clause 5.4 below.
5.4. Notwithstanding the above clause 5.3 no salary payment above $15,000 per month shall be paid to the Executive in respect of any month if:--
(a) The notional payment of such additional salary in the month which has given rise to '1,., potential additional salary payment under clause 5.3 above (the "Relevant Salary Month") would cause the Company to no longer be in Positive Cash Flow for the Relevant Salary month; or
(b) The amount of Positive Cash Flow achieved in the Relevant Salary Month by the Company is less than $24.900.
5.5. With effect from the month in which the Company achieves a Triggering Cash Flow the Executive will be entitled to receive a sum equal to the total of the difference between the monthly amount specified in clause 5.1 and the monthly amount specified in clause 5.3 for each month from the date of commencement of the Employment to the month in which the Company achieves a Triggering Cash Flow, subject to a maximum of an equivalent to 30 months difference in salary.
Such sum shall be payable monthly in 12 equal instalments normally on the first day of each calendar month. Subject to clause 5.6 the first such instalment shall be paid on the first day of the second month following the month in which the Company achieves a Triggering Cash Flow.
5.6 No instalment payable under clause 5.5. Shall be paid to the Executive in respect of any month, if:--
(a) The notional payment of such instalment in the month which has given rise to the potential instalment payment, (the "Relevant Instalment Month") would cause the Company to no longer be in Positive Cash Flow in respect of the Relevant Instalment Month; or
(b) The instalment payable to the Executive exceeds 1/3 of the amount of Positive Cash Flow achieved in the Relevant instalment Month by the Company.
5.7 With effect from the trigger Date, the Executive will be entitled to receive a further $100,000 from the company in respect of housing allowance payable monthly in 12 instalments normally on the first day of each calendar month. The first such instalment shall be paid on the first day of the month following the Trigger Date.
5.8 If the Employment is terminated for any reason prior to full receipt by the Executive of the total sums specified in clauses 5.5. And 5.7 above, any outstanding amounts shall be paid by the Company to the Executive in one lumps sum payment within 14 days of the date of termination of the Employment.
5.9 The company may, at its absolute discretion, pay the Executive an annual discretionally bonus.
The Executive's eligibility for a bonus shall be determined on the basis of a number of factors to be determined by the Company at its sole discretion. Such factors may include (but will not be limited to) the profitability of the Company, the Executive's performance, conduct and contribution and the strategic needs of the Company. In the event that bonus is paid to the Executive, such bonus shall be between 15%-17.5% (as determined by the Company) of the total performance Bonus Pool for the relevant financial year. The bonus paid to the Executive (if any) shall be paid on the first day of the month following the end of the relevant financial year. For the avoidance of doubt, no bonus shall be payable if the Executive is no longer employed by the Company if the Executive is working under notice (whether given by the Company or the Executive) as at the end of the relevant financial year."
23. From a perusal of the above clauses, it is clear that for claiming the actual salary and allowances as well as damages, the clauses 5.1 to 5.4 are very clear, unambiguous and definite in their wisdom which provide the payment of salary and allowances from pre and post dates of achievement of the trigger cash flow and no where in clause 5.8 of the agreement it is provided that on termination of the services of respondent No,1, would be entitled to actual salary and allowances as if the trigger ,:ash flow has been achieved by the company. Clause 5.8, as discussed above, is completely silent about the proposition advanced by the learned counsel for respondent No,1 that the termination of respondent No,1 would be deemed to be achievement of the trigger date thereby entitling him to claim the actual salary and allowances etc. It is, therefore, evident that at the event of termination of the services of respondent No,1, the trigger date was not achieved by the company. The respondent No,1 in his cross-examination has candidly admitted that at the time of termination of his services the trigger date was not achieved. The admission of the respondent No,1 in his cross-examination is usefully quoted herein below for the sake of convenience:-- "As I know the deft. No,1 not achieved trigger of cash flow even before issuance of termination letter dated 26-12-2006 to me.
24. The admission of respondent No,1, therefore, shows that at the time when his services were terminated on 26-12-2006, the company had not achieved the trigger date but, as discussed above, he had pleaded that termination of his service was independent of achievement of trigger cash flow but clause 5.8 of the agreement, as discussed above, is totally silent to the proposition that in the event of termination of services of respondent No,1, the trigger date would commence.
The respondent No,1 has further admitted in his cross-examination that the principal amount of loan has still not been repaid by the appellant and it is one of the conditions precedent for achievement of the trigger date that with clearance of the loan amount, the trigger date' would commence and the said admission of respondent No,1 that still the appellant had not repaid the loan shows that the trigger date was not achieved at the time when the services of respondent No,1 were terminated. The respondent No,1 has further admitted in his cross-examination that in para.9 of his affidavit in evidence he has stated that until the appellant achieved a cash flow break even point, he shall receive amount of 1,80,000 US$ per annum. The respondent No,1 in his cross- examination has almost admitted the whole defence of the appellant regarding achievement of the trigger date, non clearance of the loan as well as receiving the salary to the tune of 180,000 US$ per annum in view of clause 5.2 of the agreement, as such the respondent No,1 could not claim actual salary and allowances which he had to receive on achievement of the trigger date and his admission in cross-examination, as discussed above, disentitle him to claim the actual salary and allowances and since respondent No,1 has admitted that the trigger date had not achieved, therefore the estoppel operates against him to ,claim the actual salary which was payable to him only after achievement of the trigger date.
25. The submission of learned counsel for respondent that in case of termination, even if trigger date has not been reached, the termination will be considered to be the trigger date in accordance with the provisions of clause 5.8 which provides that any amount out of total sums specified in clauses 5.5. And 5.7, if there is any amount outstanding, the same shall be paid in one lump sum payment within 14 days, is not sustainable.
26. When we read clause 5.8 as a whole, the interpretation which clearly emerges is that if the trigger date had been achieved before termination and instalments are still outstanding, the entire outstanding amount shall be paid within fourteen days in one lump sum payment. It cannot be interpreted to mean that if the trigger date has not been reached, the termination will be considered to be trigger date.
27. It will be pertinent to point out that during the pendency of the appeal, vide order dated 12-10- 2008 of this Court, the appellant was directed to deposit 200,000 US$ with the Nazir of this Court and in the event if he succeeded in appeal, if will be refunded to him within three days and the matter was adjourned to 29-10-2008 for reply of the learned counsel for the appellant under instructions of his client and on 29-10-2008 the learned counsel for the appellant filed a statement in writing denying therein the deposit of 200,000 US$ in Court and stated that the appellant have wind up their business at Karachi and have shifted to Dubai. The learned counsel for respondent No,1 on receipt of the copy of the said statement has also filed statement in writing on 28-11-2008 stating therein that the appellant has made misstatement in Court and are running their business after changing the name of their company in the name of Northway Pakistan Limited (PNL) which has been incorporated through another offshoot 3 company in the name of Northway Investment Limited. But that as it may, we are not inclined to pass any order in this respect because it is the exclusive domain of the executing Court to execute the decree in the manner provided under Order XXI, C.P.C.
28. The respondent No,1 has claimed the actual salary in lieu of notice period of 12 months as well as the difference in his salary and allowances with effect from 1-1-2005 to 26-12-2006 but, as discussed above, since the trigger date admittedly had not achieved, therefore the respondent No,1 was not entitled for the actual salary or difference in his salary and allowances. The learned Single Judge has passed the decree in view of his claim mentioned above to the tune of 691,999.92 US$ but, as discussed above. In our humble opinion, since the trigger date was not achieved, therefore respondent No,1 was not entitled for the actual salary and the differences in his salary and allowances received by him from 1-1-2005 to 26-12-2006, as such the decree passed by the learned Single Judge ought to be modified as under:--
(i) The Salary of 12 months in lieu of 12 months notice regarding termination of the services of respondent No, 1 at the rate of 15,000 US$ amounting to 180,000 US$.
(ii) The respondent No,1 is not entitled to any difference in his salary from 1-2-2005 to 26-12-2006 for the simple reason that admittedly the trigger date had not achieved by that time.
(iii) Entitled for Housing allowance of 12 months for non-service of notice for termination of his service at the rate of 8,333.33 US$ amounting to 100,000 US$.
(iv) He is not entitled for annual housing allowance as well as additional benefits for the reason that by the time when his services were terminated admittedly the trigger date had not achieved.
29. For all the aforesaid reasons and circumstances, we are of the considered opinion that the non- exclusive clause provided in the service agreement Ex.P-1/2 does not oust jurisdiction of the local Courts to entertain and adjudicate upon the claim of the parties and by virtue of service agreement between the parties, admittedly the trigger date had not achieved therefore the respondent No,1 was not entitled for any actual salary or allowances which were payable after achievement of the trigger date, however, as discussed above, respondent No,1 is only entitled for the salary of 12 months in lieu of the notice amounting to 180,000 US$ as well as housing allowance for the 12 months in lieu of notice period amounting to 100,000 US$ totaling 280,000 US$ and, in any way, is not entitled for the whole claim awarded to him by the learned Single Judge.
30. After pondering the whole evidence available on record we are of the opinion that the whole claim put forward by the respondent No,1 could not be allowed and the decree ought to be modified. Accordingly the decree impugned herein is modified to the extent of US$ 280,000 as indicated in paras.28 and 29 of this judgment. With the above modification in the decree, we do not find any merits in the present appeal which is hereby dismissed with no order as to costs.