1. ' NADEEM AZHAR SIDDIQI, J.--- By these applications the defendants Nos.1 to 5 have prayed for stay of suit and to refer the matter for arbitration in terms of the agreement, dated 15-12-1994.
2. ' The plaintiff has opposed the applications by filing counter-affidavit. The defendants have filed their affidavit-in-rejoinder to the counter-affidavit of the plaintiff.
3. ' Learned counsel for the defendants submit that admittedly the claim of the plaintiff is arising out of the agreement dated 15-12-1994 in respect of sale of plaintiff's shareholding in defendant No,5.
4. He refers to clause (11) of the agreement, dated 15-12-1994 which provides arbitration between the parties. He further submits that the dispute between the parties is of such nature which can be referred to the arbitration and suit in view of arbitration clause in the agreement cannot proceed.
5. ' Learned counsel apart from other reported cases had relied upon the following reported cases:---
(1) Dar Okaz Printing and Publishing Ltd. Liability Company v. Printing Corporation of Pakistan Private Limited PLD 2003 SC 808, (2) Director Housing A.G.'s Branch, Rawalpindi v. Messrs Makhdum Consultants Engineers and Architects 1997 SCM R 988, (3) ACB (Pvt.) Ltd. v. UPS Worldwide Forwarding Inc. 2007 M LD 1520 (Karachi) and Messrs Gul Industries v. Ms. HEBEI (CMEC) Machinery and Equipment Incorporation, China 2001 CLC 87 (Lahore).
6. ' Learned counsel for the plaintiff submits that before filing of the suit the plaintiff has made every possible efforts for an amicable settlement and has also sent the letter to the defendant No,
1. He further submits that the defendants themselves did not agree for amicable settlement and at this stage cannot seek shelter under the arbitration clause. He then submits that the dispute between the parties is not covered under the arbitration clause and the same cannot be referred to arbitration. Learned counsel has relied upon the following reported cases:--- ' (1) Water and Power Development Authority v. Messrs Abdur Razzaq Muhammad Iqbal PLD 1977 Lah. 5, (2) Union of India v. Bharat Charcoal Co. Ltd. AIR 1962 Cal. 510, (3) W.F. Ducat & Co. Pvt. Ltd. v.
7. Hiralal Pannalal AIR 1976 Cal. 126 and (4) Messrs MacDonald Lyyton & Company Ltd. v. Messrs Airports Development Agency Ltd. PLD 1979 Kar.
8. 444.
9. ' In rebuttal, learned counsel for the defendants states that at no point of time the defendants have refused to refer the matter to the arbitration and that before filing of the suit no such attempt has been made by the plaintiff.
10. ' I have heard the learned counsel for the parties and perused the record of this case very carefully.
11. 'The plaintiff has filed this suit for specific performance and recovery of amount on the basis of agreement, dated 15-12-1994. Subsequent to the execution of the agreement dated 15-12-1994 the plaintiff served letter upon the defendant No,1 asking settlement of five unsettled claims in respect of clauses (2) to (6) of the agreement of sale of shares. The plaintiff has served legal notice, dated 22-1-2007 upon the defendants through his Advocate asking the defendants to make necessary arrangements for settlement of the claims of plaintiff. In concluding para. The plaintiff has shown his intention to take legal action in civil as well as criminal Courts. Defendants have replied the letter and legal notice denying the claim of plaintiff being false, baseless and time-barred. The plaintiff has also made an application to the Station House Officer of Police Station Gulshan-e- Maymar for taking action against Messrs Naqvi Brothers.
12. 'Perusal of the above, it appears that there is a dispute between the parties regarding settlement of share of plaintiff under agreement, dated 15-12-1994. The said agreement contained clause (11), which reads as under:--- "All questions and disputes arising out of or touching this agreement between the parties hereto shall be referred to the arbitration comprising of one representative of each party nominated in writing. If the Arbitrators so appointed are unable to arrive to a decision, the matter shall be referred to an Umpire who shall be appointed by both the Arbitrators hereto and whose decision shall be final and binding on both the parties."
13. ' The agreement, dated 15-12-1994 is not disputed. It is also not disputed that the said agreement contains arbitration clause. From perusal of the contents of the plaint, it appears that there is a dispute between the parties regarding settlement of the claim of plaintiff in respect of the land and completed and ongoing projects in terms of clause (2) appearing on page 2 of the agreement dated 15-12-1994. The contention of the learned counsel for the plaintiff that before filing of this suit the defendants refused for amicable settlement and at this stage, is not entitled to ask for referring the matter to the arbitration has no force for the simple reason that before filing of this suit no offer for referring this matter to arbitration has been made by the plaintiff and there is no refusal on the part of the defendants. The offer of amicable settlement cannot be equated with arbitration, as in that offer no Arbitrator was appointed by the plaintiff. The plaintiff is claiming that under agreement he is entitled for settlement of his claim and is required to ask for arbitration before approaching the Court. The parties have agreed to a mechanism to resolve their dispute and cannot bypass the same by filing the suit.
14. 'The provision of section 34 of the Arbitration Act provides that if in a contract, there is provision of resolution of dispute between the parties by way of arbitration and parties had agreed such forum, then such forum is to be resorted to and given preference over filing of the suit.
15. 'Before that stay of proceedings and referring the matter to the arbitration the Court has to satisfy itself that there is an agreement to refer the matter to the arbitration, the suit relates to any matter agreed to be referred, there is a dispute between the parties which is covered by the agreement and that the applicant was at the time when proceedings were commenced and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration.
16. 'In this case the defendants Nos.1 to 5 who are contesting defendants just after receiving the notice of the suit without participating in the proceedings have filed applications under section 34 of the Arbitration Act, which clearly shows their willingness to refer the matter to the arbitration and to do all things necessary to the proper conduct of the arbitration.
17. ' Arbitration clause in the agreement clearly and unequivocally provided that all disputes between the parties were to be referred to the arbitration and the parties could not be allowed to avoid the arbitration agreement lightly. The arbitration clause provides that the dispute shall be referred to the arbitration comprising of one representative of each party nominated in writing. The clause further provides that if the Arbitrators so appointed are unable to arrive to a decision the matter shall be referred to an Umpire who shall be appointed by both the Arbitratos.
18. 'In view of the above, the applications are allowed as prayed. The proceedings are stayed and the matter is referred to the arbitration in accordance with the arbitration clause of the agreement, dated 1542-1994. The parties may nominate their Arbitrators within 15 days and thereafter within next 15 days, the Arbitrators shall appoint Umpire.
19. ' These applications are disposed of in the above terms.