C.M. 371 of 2013.
' MUHAMMAD ANWAR KHAN KASI, C.J.---Applicant seeks interim relief qua deposit of liquidity with an escrow till final adjudication of the disputes between the parties to the suit.
2. The applicant claims to be the successor of Messrs Petronas Carigali, the owner of majority working interest in Petroleum Production from Commercial Discovery of Petroleum in Mehr Concession and in that capacity, being operator had issued Cash Calls to respondents for payments of their share of costs and expenses respecting exploration and development as approved by operation committee according to Joint Operation Agreement but the respondents defaulted in Cash Calls, consequently applicant met the expenditure requirements from its own accounts and after successful Commercial Discovery of Petroleum, production and sale has commenced. The applicant claims that for making up the default due to unpaid Cash Calls, he has a right of deduction from the petroleum sale proceeds, therefore, he be allowed to set up escrow account to deposit the share of respondents.
3. Learned counsel for the applicant argued that respondents are not entitled to receive the petroleum sale proceeds unless they pay their share of expenditure with interest so that the parties could avoid the second round of litigation for recovery.
4. Learned counsel for respondent No,1, on the other hand, argued that 'Farm Out Agreement' was merely Memorandum of Understanding and same has been superseded by 'Deed of Assignment' and Joint Operation Agreement. Moreover, the applicant was not a party to 'Farm Out Agreement' and legal status of his acquisition of 75% share of working interest from Petronas Carigali-Pakistan is still pending adjudication.
5. It is next submitted that application is not maintainable as the applicant has already claimed analogous relief in C. M. No, 1 of 2011 which is pending adjudication after Judgment dated 16-11-2012 passed by the Hon'ble apex court.
6. It is next contended that issue of cash calls is question of fact, already sub judice in Civil Suit No,130 of 2011 and requires adducing of evidence.
7. It is further argued that applicant has given false certificate on the plaint/petition that subject matter of the suit is not already pending adjudication and as such has not come to the court with clean hands, hence not entitled for equitable relief.
8. It is also averred that the real intent behind the application is to circumvent the procedure and to acquire legitimacy for illegal operation in the garb of the order of this court, sought through this application.
9. It is submitted that ingredients, essential for grant of interim relief, respecting irreparable loss and prima facie case are not available to applicant.
10. It is lastly stated that applicant is supposed to operate on his own risk and cost having no effect upon the rights of other working interest owner; or to place all receipts in an escrow account.
11. Learned counsel for respondent No,2, argued that applicant is not a legitimate working interest owner as transfer of 75% working interest to applicant has been made illegally and the petition is barred by law, therefore, same is liable to be dismissed and in this regard an application under Order VII, Rule 11, C.P.C. Has already been moved.
12. In rebuttal, learned counsel for applicant submitted that OMV is not a new company because the previous company with the name of Petronas Carigali has changed its title to OMV, therefore, question of transfer of shares in violation of law does not arise.
13. It was also clarified that only Farm Out Agreement governs the relationship inter se the parties to suit, whereas remaining agreements are between the State and working interest owners.
14. It was lastly submitted that relief in C.M. 1 of 2011 is not identical to that of present application as it relates to payment of operating expenses by defendant while instant application is related to disposal of expenses generated from sale of petroleum.
15. Heard and record perused.
16. Perusal of record reveals that relief prayed in the instant application has profound bearing upon the dispute agitated in the main petition/suit, para-12 which reads as under:-- "in the event of default by any working interest holder in payment of its share of the cash call within the time prescribed, in accordance with Article 6.5 of the Joint Operation Agreement, the Operator, subject to issuance of two notices for payment with the first being at least 45 days after the default and the second being at least 30 days thereafter, has the right to deduct from the proceeds of the sale of petroleum accruing to the working interest holder the defaulted amount along with a delayed payment penalty of 1.5% per month of the default amount calculated over the period of default. In the event of default the Operator also assumes a lien on the proceed due to the working interest of the defaulting holder as well as any interest of the working interest holder in material and equipment".
17. On the other hand, through the instant application following relief has been sought:-- "pending adjudication of disputes between the parties, this honourable Court may be pleased to direct that any and all monies remaining after the due deductions and adjustments from the proceed of Petroleum Sales to be paid by the purchasers against the Working Interest currently held by the respondents may be deposited in an escrow with a designated third party or deposited in a bank account directed to be set up by this honourable Court."
18. According to clause 6.5 of Joint Operation Agreement only operator or non-operator parties to the agreement are entitled to make deduction from the petroleum sale proceeds to make good the expenses incurred due to default in Cash Calls. If the application in hand is allowed, same would amount to authorize the applicant/plaintiff to make deductions which cannot be done prior to decision of the legal status of applicant/plaintiff, as successor of Petronas Carigali-Pakistan, being, de jure operator and majority working interest owner.
19. In addition, being a fiscal matter element of irreparable loss is not available to the applicant.
20. In view of above, the present application is dismissed.