1. ' This is a Petition under section 5 read with section 7 of the Arbitration (Protocol and Convention)
2. Act, 1937 and rule 294 of Sind Chief Courts Rules for enforcement of an award made at. Geneva, Switzerland. Maly the facts are that on the basis of negotiations between the parties, as reflected by the correspondence, the Plaintiffs established an irrevocable letter of Credit No, 38249 dated 16th May, 1973 for shipment of 14,500 Metric Tons of Japanese white (Pound Grain) Rice of 1968 Crop. A further quantity of 506 Metric Tons was also agreed to be supplied in addition to the aforestated 14,500 metric tons. The defendants shipped 14,278,3032 metric tons but failed to ship the balance quantity of 7,27,6968 metric tons. The Plaintiffs therefore filed claim for damages for $ 1,88,298.82. On 25th March, 1977 the Plaintiffs proposed the defendants to submit the dispute to two arbitrators to be appointed one by each of the parties upon which the defendants by their letter dated 9th April, 1977, agreed to it. It is stated that as there was a dispute between the defendants and Trading Corporation of Pakistan, which was subject-matter of an arbitration, the defendants requested the plaintiff to withhold the arbitration proceedings till such time the award was made in that case. After the award was made in the dispute with Trading Corporation of Pakistan and the defendants' claim was rejected, the Plaintiffs referred the matter to arbitration and appointed Mr. Smidoff of Geneva as their arbitrator. The defendants appointed Madam G. Albert of Geneva as their arbitrator. The Plaintiffs sent a statement of claim claiming $ 1,88,298,82. The arbitrators made an award on 27th September, 1979 granting damages to the plaintiffs in the sum of $ 1,37,744.88 with interest at the rate of 10% per annum from the date of award till payment. They also awarded $ 14,553.94 towards the dead freight and cost of $ 300. These proceedings have been instituted to enforce this award. The Defendants claim to have filed objection which was not available on the file, however a copy of the same was supplied which has been placed on record.
3. ' Mr. Sarmad Usmani, the learned counsel for the defendants has contended that the award cannot be enforced as it is not a foreign award as contemplated by section 2 of Arbitration (Protocol and Convention) Act, 1937. The contention is based on the fact that the plaintiffs are domiciled at New York where they carry on their business. It is an admitted position that under the notification issued by the Government of Pakistan under section 2 (b) of the Act USA has not been declared to be a party to the convention setforth in the second schedule. The learned counsel for the plaintiffs has not been able to produce any notification of the Government of Pakistan to rebutt his contention.
4. He has, however, relied on a Treaty between USA and Pakistan known as Treaty of Friendship and Commerce (with Protocol) signed at Washington on 12th November, 1959. It was registered by the United States of America on 17th August, 1961 with the Secretariat of United Nations. Reliance has been placed on Article 5, sub-clause (2) of the treaty which reads as follows :- "Contracts entered into between nationals and companies of either Party and nationals and companies of the other Party, that provide for the settlement by arbitration of controversies, shall not be deemed unenforceable within the territories of such other Party merely on the ground that the place designated for the arbitration proceedings is outside such territories or that the nationality of one or more of the arbitrators is not that of such other Party. No award duly rendered pursuant to any such contract, and final and enforceable under the laws of the place where rendered, shall be deemed invalid or denied effective means of enforcement within the territories of either Party merely on the grounds that the place where such award was rendered is outside such territories or that the nationality of one or more of the arbitrators is not that of such Party."
5. ' Mr. Abdul Monem Khan the learned counsel for the Plaintiffs has contended that the Plaintiffs are entitled to enforce the award under the aforestated clause of the treaty. It therefore seems that reliance has been placed entirely on the treaty and not the law governing the enforcement of the award. The Court is to give effect to the law and not the treaty. If any treaty or convention is to be enforceable through the Court of law it should have some legislative or other sanction. Such treaties can be enforced by Courts if they are made part of the Municipal or domestic laws of our country. It is well settled that treaty by itself is not enforceable through the Court. In this regard reference may made to the following observation made in Yangtze case PLD 1961 S. C. 573 at 578.
6. "This argument though apparently plausible does not bear scrutiny. It fails to take into account that under the system of law which prevailed in. British India and now prevails in this country international arrangements affecting private rights and obligations do not become operative of their own force but require some legislative or other sanction. Such international arrangements are recognized and enforced in our national Courts only to the extent they are incorporated into the municipal or domestic laws of our country and subject to the conditions, if any, therein specified.
7. Thus the Protocol on Arbitration Clauses and the Convention on the Execution of Foreign Arbitral Awards had to be incorporated in the Arbitration (Protocol and Convention) Act, 1937 and the conditions therein prescribed had to be complied with, by issuing the notification of the 8th June, 1938 before they could become operative even in British India."
8. ' There are instances where International Conventions have been made enforceable through Municipal Legislation. In this regard reference can be made to Carriage of Goods Act, 1925, Carriage by Air Act, 1934 and Carriage by Air (International Convention) Act IX of 1966. Even the Arbitration (Protocol and Convention) Act, 1937 is an instance of such Municipal legislation. It therefore follows that the treaty referred by the learned counsel for the plaintiffs does not confer jurisdiction upon the Court to enforce the award made on a dispute between persons domiciled in Pakistan and persons domiciled in U.S.A.
9. ' The question therefore arises whether the award in the present suit can be enforced under the provision of Arbitration (Protocol and Convention) Act, 1937. In Yangtze's case where notification issued in the year 1938 was held not continuing to be valid after the creation of Pakistan, the following observation was made :- "A fresh notification was, in this view of the matter, necessary to indicate that the foreign Power whose subject wished to enforce an award made outside Pakistan was a party to the Convention and the place where the award was made was situated in. a territory to which the Convention applied. In the absence of such a notification it is not possible for the national Courts of Pakistan to hold that the award sought to be enforced is a "foreign award" within the meaning of section 2 of the Arbitration (Protocol and Convention) Act, 1937 for the satisfaction thereunder as to the 'existence of reciprocal provisions has to be of the Central Government of Pakistan and not of the Courts. Unless such satisfaction is evidenced in the manner indicated in the Act the Courts in this country are helpless and are not in a position to hold that the conditions necessary for making such an award enforceable in Pakistan under the provisions of the said Act have been shown to have been fulfilled by party seeking to enforce the award, on whom the initial onus clearly lies to show that the award is a "foreign award" of the nature contemplated under the Act."
10. ' After Yangtze's case Foreign Awards and Maintenance Orders 'Enforcement (Amendment)
11. Ordinance, 1962 (Ordinance 53 of 1962) was promulgated which added subsection (2) to section 2 of Arbitration (Protocol and. Convention) Act, 1937 providing that any notification issued under section 2 by the late Government of India before 15th August, 1947 and in force on that day for the purpose of enforcement of foreign awards in British India, declaring any power to be party to the said Convention or any territory to be the territory to which the Convention applies, shall be deemed to be a notification issued by the Central Government for the purpose of enforcement of foreign awards in Pakistan. U.S.A. Has not been included in the notification issued earlier. Another notification has been brought to my notice bearing No S.R.O. 481 (K) dated 20th April' 1960 published in Gazette of Pakistan, dated 29th April, 1960 which is reproduced hereunder. MINISTRY OF LAW Karachi, the 20th April, 1960 ' S. R.
0. 481 (K). -In pursuance of section 2 of the Arbitration (Protocol and Convention) Act, 1937 (VI of 1937), the Central Government, being satisfied that reciprocal provisions as stated in that section have been made in relation to Pakistan by the Federal Republic of Germany with effect from the 22nd day of April 1954 is pleased to declare the Federal Republic of Germany to ne a party to the Convention set forth in the Second Schedule to the said Act as from that date.
12. (No, F. 7 (12) 60-Law).
13. A. R. ,KAZI, Dy. Secy.
14. ' By this notification the Federal Republic of Germany was declared to be a party to the Convention.
15. It is thus clear that where Central Government is satisfied that reciprocal arrangements have been made notification as required by section 2 of the Act is issued. The Plaintiffs have not produced any notification in which USA has been declared to be a party to the Convention. The effect of the absence of such a notification has been set out in the Yangtze case as quoted above.
16. Consequently the award cannot be termed as a "foreign award" and it cannot be enforced under Arbitration (Protocol and Convention) Act, 1937.
17. ' Mr. Abdul Monem Khan the learned counsel for the plaintiffs has contended that in PLD 1979 Kar.
18. 762 it has been held that in matter pertaining to international arrangement the Court should act in aid of the executive authority and should neither say or do anything which may cause embarrassm ent the authority in the conduct of its international relation. This observation is based the divtum laid down by the Supreme Court in Yangtze's case. This can more fully be understood if subsequent observations of the Supreme Court are carefully read where it has been held that where a notification has been issued by the Central Government the Courts would not go behind it to investigate whether reciprocal provisions did in fact exist in the notified country. Where notification has been issued the Court will presume that the conditions for treating an award as a foreign award has been fulfilled. In the present case no notification has been issued by the Central Government and therefore the Courts will not investigate whether reciprocal provisions do exist in the country which has not been notified. If the Central Government has not issued notification the Court should not interfere, investigate or do anything in that regard which may cause embarrassm ent to the Government in the conduct of its international affairs. The petition is, therefore, dismissed.