' MS. RUKHSANA AHMAD, J.---C.M.A. No,11382 of 2009 is an application under Order XXXIX, rules 1 and 2 read with section 151, C.P.C. Filed by the plaintiff in which it has prayed that the defendants, their officers, agents be restrained from appointing any person other than the plaintiff as an importer, manufacturer, assembler or distributor of "Samsung" brand colour television or their parts in Pakistan or from supplying any material to such person(s) or from cancelling the exclusive arrangement between the parties. It has been further prayed by the plaintiff that in case any person or entity has been so appointed they may be restrained from acting as an importer, assembler, manufacturer, distributor and agent of Samsung brand colour televisions and/or any of their parts in Pakistan.
2. Before taking up the injunction application, I would like to go briefly into the history of the case.
The plaintiff, Digital World Pakistan (Pvt.) Ltd, is seeking declaration and permanent injunction, which company was incorporated on 6-4-2000 and is engaged in the business of manufacturing, assembling, sales and distribution of consumer electronics. Certificate of incorporation along with Memorandum and Articles of Association of the company are annexed with the plaint.
3. The defendants are companies involved in business of consumer electronics under the brand name of "Samsung". The plaintiff's contention is that before April, 2000 the brand Samsung had a very small/negligible market and brand recognition in Pakistan. It was at this juncture the parties entered into negotiations and agreed to enter into a distributorship with a promise that if everything went well the parties would enter into a long term joint venture for the purpose of installing a factory/assembly unit in Pakistan for the use of Samsung brand in Pakistan.
4. A Letter of Intent was signed between the parties dated 1-4-2000 and the defendants appointed the plaintiff as distributor for their audio/video products, most notably colour televisions of the defendants.
5. The plaintiff submitted that at that particular time in Pakistan, there was a predominant market of "LG" and "Sony" and the latter two products were being locally assembled and it was thus necessary and imperative for the defendants to enter into a long term strategy/agreement for the purpose of conquering the Pakistani market. Both the parties entered into a long term joint venture evidenced through an Agreement to Assemble Samsung Colour Televisions under license" dated 19-8-2002 hereinafter referred as "Assembly Agreement") under which the plaintiff was to be supplied parts in semi or completely knocked down (CKD) conditions and these parts were then assembled/manufactured by the plaintiff in its factory in Pakistan. After the execution of the said Assembly Agreement, the plaintiff massively invested by taking on lease the factory of Orion Electronics (Pvt.) Ltd. At Islamabad, wherein the job of Samsung Colour T.V. Was carried out to the satisfaction of the defendants. On further encouragement by the defendants, the plaintiff, colossally invested in the purchase of land, building, plant equipment's, machinery and infrastructure so as to install their own factory at 35 K.M. On Multan Road, Lahore on 7-0 acres of land. The investments of the plaintiff in the factory are to be gauged and confirmed from the evaluation report dated 21-2-2006 attached to the plaint, in which the total worth of the factory was shown at Rs,360 million. The plaintiff's factory had .Given employment to 350 persons who were being imparted on the spot training and thus the plaintiff had created many job opportunities. Huge investments were further made by the plaintiff in purchase of expensive molds and state of the art technology including testing equipment's, running a cost of US$ 1.75 million.
6. According to the plaintiff, this Assembly Agreement was in substance a joint venture agreement between the parties. Looking at the market practice and so also the actual transaction taken place between the parties and their conduct inter se, the following pertinent aspects of relationship stood settled and acted upon:--
(a) "The plaintiff imported parts in semi and completely knocked down (CKD) conditions from the defendant. The price of such purchases from the defendants included an in-built profit margin for the defendants;
(b) The investment in land, equipment, machinery, technology, labour, infrastructure, marketing, advertising, the financial exposure from the market and the time/effort undertaken by the plaintiff was colossal. The defendants stood precluded from appointing anyone else an Assembler/Manufacturer of their products till such time the Assembly. Agreement was to subsist.
Similarly, till the business of the Assembly Agreement, the defendants also stood precluded from permitting any other from importing any Samsung parts or products into Pakistan. Any other interpretation to the arrangement between parties would be opposed to commercial sense and would also be against all canons of market practice. In fact the manner in which the parties performed their works and conducted themselves abundantly confirms the latter statement;
(c) The mere permission to assemble or import the products would again have not made any commercial sense, till such time an exclusive distributorship for the sale of manufactured goods at the factory of the plaintiff was also available. Therefore, the plaintiff was also appointed as an exclusive distributor of the Samsung brand colour televisions in Pakistan.
7. The plaintiff was the exclusive assembler and distributor of Samsung colour television in Pakistan and this was reaffirmed when the plaintiff's factory was inaugurated by the then Prime Minister of Pakistan and the plaintiff was also felicitated by the Ambassador of South Korea to Pakistan and Mr. D.K. Byeon, the then President of the defendant No,1 Company. The plaintiff conducted an event at Hotel Pearl Continental in Bhurban, Pakistan to launch LED television sets, which was widely published and recorded by the media which projected the plaintiff as the sole assembler/manufacturer and distributor of Samsung colour television as late as 4-8-2009.
8. The plaintiff stated that it had hugely invested in advertising its product and because of this hard work and investment, the market share of Samsung colour television in Pakistan prior to April, 2000 was negligible and today it has risen up to nearly 40%. Further, since the year, 2000 the plaintiff has exclusively been purchasing parts from the defendants in completely knocked down (CKD) condition and semi-knocked down conditions as well as completely built units (CBU) which is to the tune of approximately US$ 93 millions. All this proved that all along the plaintiff had exclusive right as assembler/manufacturer and distributor of this product. The plaintiff had spent US$ 7 million on advertisement alone. The plaintiff had singularly created an immense goodwill for Samsung brand colour television in Pakistan. As many as 650 dealers had been established all over Pakistan with shop display centers, signage and other infrastructure facilities. Time and effort in establishing these dealerships cannot be measured in terms of money. The dealership contracts which were entered into by the plaintiff with 650 dealers were on behalf of the joint venture agreement/arrangements. Samsung plazas numbering 46 have been established, which are exclusive shops of retail for the sale of Samsung products only in which the plaintiff has not only put up Samsung colour television but other Samsung home appliances as merchandise for sale running into further heavy investment of millions of dollars.
9. The plaintiff submitted that the business of joint venture agreement/arrangement could not have run without the support from banking sector as market trade of colour television in Pakistan was running through a credit cycle of 90 days which was very unsecured. All such risks were taken by the plaintiff due to the existence of joint venture agreement and had there not been a joint venture agreement between the parties, the plaintiff would not have undertaken such a risk. The plaintiff acquired huge bank loans and financial facilities from several banks and at present the plaintiff's exposures in the banking sector are calculated at approximately Rs,1.6 billion which stands confirmed through certificate given by the Chartered Accountants annexed to the plaint.
Due to this running business sizable stock was brought in by the plaintiff for nearly Rs,1.2 billion and nearly Rs,356 million receivables from the market.
10. The plaintiff has submitted the involvement of the defendants in this business confirmed the existence of the joint venture agreement between the parties. The defendants had prescribed "PSI" system (purchase, sale and inventory) and costing sheets through which they prescribed and dictated, inter alia, the following:--
(a) the sales prices of the products;
(b) the margins of the plaintiff;
(c) the quantity of purchase and inventory;
(d) terms with the dealers.
11. The employees of the defendants namely Messrs D.K. Beyon, B.W. Lee, H.J. Park and Ashraf Sajid orally confirmed to the plaintiff's representative the factum of the joint venture arrangement between the parties and also that the plaintiff was the exclusive assembler, manufacturer, distributor of Samsung colour television in Pakistan and that no other person was permitted to effect imports and that Samsung brand for colour television in Pakistan was the ownership of the joint venture. This in fact really meant that no other person would be appointed to manufacture or deal with Samsung colour television in Pakistan excepting the plaintiff.
12. The joint venture arrangement was deemed permanent by the plaintiff as it could only be terminated if the eventualities mentioned in clause 20 of the Assembly Agreement were to arise. It is pleaded by the plaintiff that none of the conditions mentioned in clause 20 of the termination clause existed presently and neither the defendants had given any notice nor taken any objection on the touchstone of clause 20. Hence, the question of termination or appointment of third parties in lieu of or in addition to the plaintiff as importer, assembler, manufacturer or distributor could not arise. It is further pleaded by the plaintiff that it was the plaintiff who discovered from its own sources in the market that in a completely mala fide manner so as to ruin the said plaintiff and nullify the joint venture agreement/arrangement, the defendant had made arrangements to cancel relationship with the plaintiff and appoint a third party as agent/distributor so also the manufacturer/assembler for Samsung brand colour television. This was a big shock to the plaintiff as no notice and/or reasons had been given by the defendants to justify the proposed action and this action was arbitrary and in breach of natural justice. It was thereafter that the plaintiff instantly approached this Court to seek immediate judicial interference as Samsung brand colour television for Pakistan is the property of joint venture and no, third party could be appointed to import, manufacture or deal with Samsung colour television in Pakistan without the permission of joint venture/plaintiff. It is the case of the plaintiff that in case the threats of the defendants are materialized it would completely ruin the joint venture and the plaintiff would suffer bankruptcy, loss of reputation, goodwill and a complete annihilation in view of huge bank exposure and unsecured receivables, redundancy of employees and waste of millions of dollars of sunk expenditure in marketing its brand development, creation of dealerships and retail shops etc. Further, not only the above but the defendants throughout have been guilty of misrepresentation and default including but not limited to default towards their contribution for marketing and infrastructure development in view whereof the plaintiff was facing business difficulties. Before the plaintiff came into the picture, the defendants were already defaulters in Pakistan for an amount of US$ 0.966 million towards the business of marketing and infrastructure development for the year, 2008. The plaintiff contributed huge amounts for such development activities into the business and the plaintiff's marketing claim for the period 2009 pending against the defendants is US$ 1.410 million. The plaintiff has pleaded that special equities flow to grant the declaration and injunction and judicial interference in the plaintiff's favour by this Court, which would save the plaintiff from complete destruction as the loss to the plaintiff is not quantifiable in monetary terms.
13. On the filing of the suit along with this injunction application, this court on 17-12-2009 passed an ad interim order, inter alia, restraining the defendants from terminating the joint venture agreement. The defendants on being served upon were represented by Mr. Mansoorul-Arfin, learned Advocate and filed counter-affidavit to the stay application through one Mr. Sung Woo Han, attorney of defendants Nos.1 and 2. A rejoinder was filed by the plaintiff, making the application ripe for hearing.
14. The injunction application was taken up for hearing by this Court on several dates i.e, 24-2-2010, 25-2-2010, 3-3-2010, 4-3-2010 and 17-3-2010. The Advocates for the respective parties finally concluded their arguments and submitted their respective case-laws before this Court.
15. The learned Advocate for the plaintiff, Mr. Makhdoom Ali Khan, after making submissions on the facts of the case argued the said application at great length placing reliance on citations on various legal propositions to fortify his arguments which are listed under the following heads:-- Where cause of action partially arises-Territorial jurisdiction of High Court:
(i) 2006 CLD 210 (Lahore);
(ii) PLD 2002 Kar.420;
(iii) 1999 YLR 2162;
(iv) PLD 1996 Kar.411.
Application of section 120 C.P.C.:
(i) PLD 1994 Kar.388;
(ii) 1992 CLC 2047.
Damages are inadequate remedy---Injunction granted:
(i) 1990 CLC 609;
(ii) PLD 1982 Lah.49;
(iii) (1973)1 All ER 992.
Injunction application---Prima facie case:
(i) 1996 CLC 507;
(ii) 1992 CLC 2540;
(iii) PLD 1983 Kar.387;
(iv) 1997 SCMR 220.
Corpus to be preserved:
(i) 2003 CLC 695.
Balance of convenience and irreparable loss/injury:
(i) 1994 CLC 1601;
(ii) PLD 1982 Lah.49.
Injunction can be granted under section 151, C.P.C.:
(i) PLD 1990 Kar.1;
(ii) 1983 CLC 1695.
Oral agreement is enforceable:
(i) 2006 CLC 430;
(ii) 1997 MLD 1294;
(iii) 1993 SCMR 183;
(iv) PLD 1981 Kar.170.
' License:
(i) 2004 CLD 343;
(ii) 2005 CLC 1602;
(iii) 2002 MLD 1714.
Agency coupled with interest and determination of facts-Injunction granted:
(i) 1994 CLC 726;
(ii) PLD 1987 Kar.112;
(iii) 1980 SCMR 588.
Section 42 of Specific Relief Act 1877---No longer limited in scope:
(i) 2004 CLC 1029;
(ii) 2003 CLC 649;
(iii) PLD 1968 Kar.222.
Precedent---Judgment of another Single Judge only persuasive and not authoritative for another Single Bench:
(i) PLD 1996 Kar.393 Whether License Or Lease---Court to look at substance and not form:
(i) PLD 1993 Kar.700;
(ii) 1998 MLD 1879.
16. The learned counsel for the plaintiff contended that the point for consideration before this Court was not that the plaintiff was a mere licensee. The Court had to look deeper into the factual position of the case to see that the plaintiff had invested into this venture secure in the knowledge that it was protected by the joint venture and knew that this venture would not be terminated at the mere whim of the defendants but was to be regulated by clause 20 of the Assembly Agreement entered between the parties. Clause 20, for the sake of convenience, is reproduced as under:-- "(20) Samsung may terminate this agreement for any reason as under:--
(a) DWP fails to comply with quality standards of Samsung even after much technical support from Samsung.
(b) DWP uses the trade-mark of "Samsung" other than as specified by Samsung.
(c) DWP starts assembly of other kits than Samsung without the written consent of Samsung.
(d) DWP fails to meet commercial terms with Samsung.
(e) The ownership of key-management at DWP is changed without the consent of Samsung.
(f) DWP becomes financially insolvent."
17. According to the learned counsel for the plaintiff, the Court was required to look at the substance of the Assembly Agreement and not merely its form. It was argued that the Court was bound to determine the true relationship between the parties, that the main aspect was the exclusivity of the venture and that there is no denial of the fact of the quantum of investments made by the plaintiff in setting up its factory and in the infrastructure of the plazas, distribution, employees etc.
18. The learned counsel for the defendants, in his reply to the plaintiff's contentions that the license can only be revoked on happening of an event specified in clause 20 of the Agreement and cannot be revoked at the option of the defendants, argued that in commercial contracts, there is no permanency and in fact it being license which is a privilege is liable to be withdrawn at any time. In support of his contention he has relied upon Martin Baker Aircraft Co. Ltd. v. Canadian Flight Equipment Ltd. (1955) (2) All E.R. 722), wherein there was no clause for determination of the license.
It could be done so only as per clause 4 of the Agreement which provided events for revocation of the Agreement by either party. The Court held that such agreements are revocable and not permanent. The Court further pointed out that the Canadian Company which was given license to manufacture was not under only obligation to manufacture, sell or exploit the products at all although it does bar Martin Baker from entering into any agreement with any other party on the American Continent for doing the same. The Court held that this is enough to hold that the agreement is revocable as grantor of licence cannot be deemed to have intended that they have their hands entirely tied by what may be wholly passive action by the Canadian Company.
19. The defendant has relied upon a case decided by this Court which was reported as 1997 CLC 1903, wherein it was held that "it is difficult to say how an Agent can tie down his principal into an eternal bond by making some investments when partner contributing a major part of the capital of a firm and tied down his assets cannot do so."
20. The defendants' further relied upon a case reported as PLD 2007 Kar.278 wherein it was held that a contract of agency by its very nature is personal to the parties and revocable at their volition subject to the terms of the deed. It does not create eternal, legal relation. He further argued that plea of agency coupled with interest is not taken in the plaint and the plaintiff pleaded only joint venture. He argued that the meaning of joint venture is carrying on business jointly for the purpose of earning profits from the joint business and also sharing the losses. He further argued that it is not a joint venture but simply a license permitting the plaintiff to assemble the CKD units of television after they purchased the same from the defendant No,1 and selling same as their own property with the brand name of the defendants and thus according to the learned counsel for the defendants, such a licence could be revoked at any time and that licence is privilege not a contract. In support of this contention he relied upon the following:--
(i) PLD 1965 SC 83;
(ii) PLD 1961 SC 17;
(iii) PLD 1975 SC 667;
(iv) PLD 1958 SC 41;
(v) 2003 SCMR 50;
(vi) PLD 1978 Kar.1041;
(vii) PLD 2004 SC 860;
(viii) 2002 AC 114 (Lahore);
(ix) PLD 1966 Lah.195;
(x) (1955)2 All E.R.722;
(xi) PLD 2002 Kar.83;
(xii) 1992 CLC 2209.
21. He further argued that from perusal of the Assembly Agreement, it is very clear that all the clauses are contrary to the concept of joint venture specially when the clauses speak of sale or purchase of the CKD units and hence there is no agency relationship at all. He lastly argued that while granting injunction, the Court has to see to the existence of three ingredients viz, (i) prima facie case, (ii) irreparable loss and (iii) balance of convenience, and no injunction could be granted if these ingredients are not available. He therefore, prayed for rejection of the present application.
22. In rebuttal, the counsel for the plaintiff has pointed out with great emphasis that on an examination of the counter-affidavit, nearly a dozen critical facts remained undisputed. The counsel further stated that the bulk of case-law relied upon by the learned counsel for the defendants relates to cases of licenses which had a clause providing for termination at will after a particular notice period. In this case although there is a termination clause but the Assembly Agreement can only be terminated for one of the reasons specified in clause 20 and not at will and it is nobody' case that the plaintiff is in breach of clause 20. All the cases cited by the defendants are, therefore, distinguishable from the present case, which does not contain a termination at will clause. The counsel for plaintiff also pointed out that insofar as the judgment cited by the defendant from England is concerned reported in Martin Baker Aircraft Co. Ltd v. Canadian Flight Equipment 1955(2) All ER 722 , it is at variance with the decision of the House of Lords reported in 1875 LR (7) HL 550. He further pointed out that this case was specifically considered by Mr. Justice Ajmal Mian (as the then was) in Pakistan Automobile Corporation Ltd. v. General Motors Overseas Distribution Corporation PLD 1982 Kar.796 at 807-809. It was held in that case that the said English case-law is not applicable in Pakistan for the reasons set out in the judgment.
23. I have heard both the respective Advocates at great length over the days that the case has proceeded and have carefully gone through the documents/record. At the very outset the learned counsel for the defendants has raised a preliminary objection that this Court has no jurisdiction to entertain the present suit as it should have been filed before the Lahore Civil Court because the liaison office of the defendant No,1 is at Lahore. In rebuttal to this objection the plaintiff's Advocate has contended, that both the main documents viz. The letter of Intent (at page 99 of Court file) and the Assembly Agreement (at page 105 of Court file) have been signed by the plaintiff at Karachi, Pakistan and all the emails exchanged between the plaintiff and the defendants during their course of business have shown the defendants address to be at Karachi as shown in Annexures A-1 to A-14 (at pages 149 to 279 of Court file).
24. So far as jurisdictional objection is concerned, it is well-settled that parties by mutual agreement cannot invest or divest a court of its jurisdiction if otherwise vested in it. The Court in whose jurisdiction the cause of action has arisen has jurisdiction to entertain suit, irrespective of the residence of defendant. Where a party suffered some injury on account of some act of omission or commission relatable to the contract inter se, then the cause of action will be considered to have accrued at such place and the Court at such place will always have jurisdiction. Where two Courts may have jurisdiction in respect of the same claim then it is the prerogative of the plaintiff that weighs more in determining the place of suing. For purposes of assumption and determination of jurisdiction of Court, averments made in plaint are to be considered true and accepted. According to the plaintiff's averments, agreement between the parties was executed in Karachi, products of defendants were supplied at Karachi. Whether the defendant ordinarily resides or not or carries on business or not within jurisdiction of a Court would not by itself be enough to delete its name from array of parties if a defendant is IE a necessary party to suit. In this regard, reference may be made to Ittehad Cargo Services v. Rafaqat Ali, PLD 2002 Kar.420, Popular Pharmacy v. Nova Bio Medical PLD 1996 Kar.411 and Pak China Chemicals v.
Dept. Of Plant Protection 2006 CLD 210. Even otherwise, section 120 of the C.P.C. Provides that provisions contained in sections 16, 17 and 20 of the C.P.C. Shall not apply to the High Court in exercise of its original civil jurisdiction. Two judgments of this Court are instructive in this regard viz. Abdur Rahim Baig v. Abdul Haq Lashari PLD 1994 Kar.388 and West Pakistan Industrial Development G Corporation v. Sheikh Muhammad Amin 1992 CLC 2047. I, therefore, over rule this preliminary objection.
25. As regards the defendants' contention that there was no business being transacted between the defendants and the plaintiff for the last six years, this was denied by the plaintiff. The defendant No,1 issued a list of products to the plaintiff (Annexure B to the plaintiff's Rejoinder) and the contention of the defendants that the plaintiff was only entitled to import 14-29 inches CTVs' was denied as final certificate of import authorization issued by the government to import all kits for all sizes of CTV was given to the plaintiff (Annexure C-1 and C-2 to the Rejoinder).
The plaintiff had commercial invoices for CRP, LCD and LED TVs and further commercial invoices from different associated companies of defendant No,1 (filed as Annexures E-1 to E-4 to the Rejoinder). The plaintiff has also shown a list of dealership network established by him (Annexure F to the Rejoinder) with investment which is reflected in the Auditors reports and balance sheets and cash flow statement (Annexures F and G to the Rejoinder). Further contention of the plaintiff that there was existence of a joint venture with the defendants involvement based on the correspondence between the parties regarding investment in Pakistan reflected in the Annexures H-1 to H-20 of the Rejoinder. The presentation regarding the joint investment on Samsung Plazas as late as 21-5-2009 was reflected in Annexure 1 to the Rejoinder. The plaintiff obtained necessary NOC to assemble other brands of CTVs at the plaintiff's factory from the defendants (Annexure J to the Rejoinder). Lastly the defendants commitment to the plaintiff to make payment of approximately US $.966 million by March, 2009 against the marketing claim of the year, 2008 as reflected in Annexure K/1 to K/4 of the Rejoinder. It is the contention of plaintiff that in view of the above-stated joint venture agreement the plaintiff, inter alia, it had taken the following steps:--
(i) It purchased parts from Samsung worth US$ 93 million from the year, 2000 till to-date (Annexure K to the plaint);
(ii) Both parties agreed to contribute towards development of the brand Samsung and its infrastructure in Pakistan for which plaintiff invested US$ 7 million;
(iii) Dealership contracts entered into by the plaintiff with 650 dealers on behalf of the joint venture (Annexure M of plaint) was a certified commitment towards joint venture by the plaintiff. The time and effort invested is not measurable in terms of money;
(iv) Plaintiff also established 46 Samsung Plazas which are exclusive Samsung retail outlets, involving heavy investment of millions of dollars (Annexure N of plaint);
(v) Employed 350 skilled workers who receive continuous training from Samsung;
(vi) Hugely invested in purchase of expensive moulds and state of art technology including but not limited to testing equipment valuing US$ 17.5 million;
(vii) Plaintiff took bank loans of PKR 1.6 billion for joint venture;
(viii) Plaintiff has also been brought under great risk in view of sizeable stocks of nearly PKP 1.2 billion;
(ix) Plaintiff's receivables from market are PKR 356 million;
(x) Plaintiff took over the stocks of previous distributors Messrs S.S. Electronics and Reshmatex.
26. The plaintiff heavily invested in purchase of expensive moulds and state of the art technology including but not limited to testing equipment valued at US$ 17.5 million (Annexure G to the plaint) and as shown by the media in the daily Dawn dated 27-4-2003 (Annexure H to H/3 of the plaint) and 4-8-2009, in which the plaintiff was acknowledged as the sole assembler/manufacturer and distributor of Samsung. The advertisements of the plaintiff presenting itself as sole distributor and manufacturer/assembler was never contradicted by defendants as can be perused by Annexures 1 to 1/12 of the plaint. The plaintiff's efforts for joint venture showed the annual sale units as can be seen in Annexure J to J/2 of the plaint. For all the above investments as stated earlier, the plaintiff had to obtain loans from banks to the tune of PKR 1.6 billion and towards joint venture and the plaintiff had been brought under great risk in view of sizeable stocks of nearly PKR 1.2 billion and the plaintiff's receivables from the market were estimated at approximately PKR 356 millions as shown in Annexure 0, P, P-1 of plaint. At the request of the defendants, the plaintiff took over the stocks of previous distributors Messrs S.S. Electronics and Reshmatex as can be seen in Annexure S to S/3 of plaint. Further the plaintiff was also made to take over the stocks of home appliances from Messrs R and I Electronics (Annexure T to T/5 of the plaint) and the plaintiff was promised to be appointed the exclusive distributor for home appliances but subsequently the defendants appointed someone else. The plaintiff's has pending claims against the defendants for sums of money which the defendants agreed to invest in the Pakistani market (Ahnexure R to R/1 of plaint). - 27. To sum up the above, the undisputed and uncontroverted facts which can be concluded on an examination of the record show what measures had been taken by the plaintiff under the Assembly Agreement in the joint venture.
(a) investments,
(b) marketing Samsung plazas 46,
(c) dealers 650,
(d) employees 350,
(e) factory worth PKR 360 million,
(f) human infrastructure receivable from market PKR 356 millions
(g) brand name investment US$ 7 million,
(h) technology investment US$ 17.5 million,
(i) bank loans US$ 1.6 billion,
(j) stocks 1S$ 1.2 billion,
(k) parts imported worth US$ 93 million.
28. It is the contention of the plaintiff that its remedy lay in filing the present suit for declaration and permanent injunction as the damages were inadequate remedy to this particular case. The plaintiff contended that all the facts and documents proved without a shadow of doubt that the plaintiff has a good prima facie, arguable case and the balance of convenience is in its favour and the plaintiff would suffer irreparable loss and injury if the injunction was revoked. Further the plaintiff has agitated that the corpus has to be preserved, meaning that the Court while granting interim relief has to preserve the corpus of dispute and ensure that in case the suit is decreed, execution does not become enforceable or extremely difficult. In support of the above contention the plaintiff's Advocate has relied on Malak Sultan v. Twin Star 2003 CLC 695. The plaintiff's further contention is that even an oral agreement is enforceable as held in Shabeena Farhat v. Highway Housing 2006 CLC 430 and Muhammad Hanif v. Ghulam Hussain 1997 MLD 1294, Bashir Ahmad v.
Muhammad Yusuf 1993 SCMR 183, while in the present case the joint venture/Assembly Agreement and a letter of intent have been executed by both parties who have admitted to the same.
29. Coming to the contention that the agreement is not a licence it is contended by the plaintiff that a licence is a contract and specific performance can be granted if party is ready and willing. This was so held in Diamond Food Industries v. Joseph Wolf GmbH and Co. 2004 CLD 343. Though in this case injunction application had been dismissed, it was purely due to the facts and conduct of the concerned party. The plaintiff has all along demonstrated that it is ready and willing to perform its part of obligations and had in fact taken positive action to fulfil obligations. In this suit the plaintiff has established beyond any shadow of doubt that it had fully committed itself physically and monetarily into the establishment of the joint venture with the defendants.
30. The defendants during the course of their present arguments filed a statement annexing a letter from the Board of Investment dated 11-2-2010. The Board of Investment had addressed the defendants on the subject of opening of a liaison office by the defendants at Karachi and another document from the SECP, Company Registration Office at Lahore showing the defendants have filed certain documents with them on 31-8-2009. The filing of new documents by the defendants through a mere statement and that too at a belated stage during the course of arguments, has been objected to by the plaintiffs' Advocate and even if the same are to be considered by this Court they do not state anything in affirmative or in support to the defendants.
31. The learned counsel for the defendants' has argued that it was only a licence and no vested right was created forever in favour of the plaintiff and the same could be revoked. Franchise agreements, like licences or agency agreements, can be terminated and if that is done the plaintiff would be entitled to damages only, as investment does not create any vested rights in agency.
32. I have heard the arguments advanced by the learned Advocates at great length and have carefully gone through the documents filed by the parties. The defendants have not denied the business relationship with the plaintiff as a duly appointed distributor for Audio Visual Products including TVs which were incorporated in the Letter of Intent between both the parties and then the Joint Venture which was perpetual in nature and could only be revoked under clause 20 of the Assembly Agreement. From the date of the execution of the agreement till the filing of the present suit, admittedly he plaintiff has been the exclusive importer, manufacturer, assembler and distributor of Samsung brand colour television in Pakistan. It has rightly been argued by the plaintiff that labe's are of no significance and the Court will always look at the substance of the relationship to decide whether it is such that needs to be protected by an order of injunction. If the Court on the examination of the facts and the substance of the relationship' comes to the conclusion that it is of a kind which needs to be protected through an injunction order during the course of a lis then it will not hesitate in granting an injunction merely on the ground that an incorrect label has been used. I also concur with the plaintiff's further argument that this relationship on a close examination is a joint venture and even at its worst cannot be said to be a mere licence terminable at will. If it is treated as an agency then it is an agency coupled with an interest to say the least.
33. I am of the view that as held in a number of decisions passed by our Courts, each case is to be adjudged on its own facts, merits and strength. As held by Mr. Justice Sabihuddin Ahmed (as he then was) in Business Computing International v. IBM World Trade Corporation 1997 CLC 1903 at page 1912, para 14, "From a survey of the case-law cited at the Bar it appears that no hard and fast rules has been laid down by the superior Courts as to specific considerations for grant or refusal of injunction in such cases".
34. The facts and circumstances as narrated and discussed above in my view show that the plaintiff has established a prima facie case and that it would be unfair at this stage to confine it to a remedy in damages. It has a working relationship and an agreement in the nature of an exclusive joint venture. To allow it to be terminated in this manner would cause it irreparable loss and injury and may spell financial ruin. The balance of convenience also lies in favour of the plaintiff and as such I am confirming the injunction granted earlier by this Court till the disposal of the case.
Accordingly the said injunction application C.M.A. 11382 of 2009 stands disposed of.
35. Needless to state that all observations made here are tentative in nature and will not come in the way of either party at the time of trial and final decision of suit. I further direct that the matter be listed for framing of issues within 7 days of filing of the written statement(s).