1. ' All the three suits between the same parties in which common questions of law and facts are involved will be disposed of by this judgment.
2. ' In Suit No.320 of 1975 by a contract dated 21-11-1972 the defendants agreed to sell to the plaintiffs 4,500 bales of cotton Pakistan American Seeds @ 26.66 U.S. Cents per lb. FOB Karachi April, May, June shipment at buyers option. In Suit No. 321 of 1985 the defendants had agreed to sell 2,000 bales February/March shipment. In Suit No.322 of 1985 the defendants had agreed to sell 900 metric tons of cotton April/June shipment. The transactions were negotiated by the parties by cable. Shortly after the contract had been made contract notes in respect of each contract were sent to the defendants but they did not sign it and returned the same. According to the plaintiffs both the parties accepted that these notes contained full terms of the contract as the defendants acted upon it and relied in appeal. The rules and regulations governing the contract and place of arbitration depended on the destination of the cotton. It is stated in the plaint that on Dollar devaluation the defendants on 28-2-1973 required the plaintiffs to revise the agreed price upward by 11.12% and sent a cable to that effect. The plaintiffs expressed their inability to accede to the request and asked the defendants to confirm immediately their intention to proceed with the balance of shipment. It may be mentioned that in Suits Nos. 320 of 1975 and 321 of 1975 the defendants had made partnershipment but in Suit No. 322 of 1975 no shipment had been made.
3. The plaintiffs by their cable dated 5-3-1973 informed the defendants that upward revision of the contract was not possible and if the defendants failed to ship the goods, they would be forced to refer the matter to Technical Arbitration in Liverpool. The plaintiffs again called upon the defendants to confirm shipment to enable them to declare the destination. The defendants did not reply and the plaintiffs by their cable dated 11-5-1973 nominated Liverpool as port of destination for the unshipped bales of cotton. The contract was, therefore, to be governed by the bye-laws of the Liverpool Cotton Association Ltd. The plaintiffs by cable dated 11-5-1973 requested the defendants to ship the balance quantity of the contracted cotton by the first available steamer to Liverpool failing which they shall proceed to finalise technical arbitration in accordance with rules of Liverpool Cotton Association Ltd. The plaintiffs by cable dated 15-5-1973 informed the defendants that they were proceeding to Technical Arbitration and nominated Mr. R.J. Anderson as their arbitrator and called upon the defendants to nominate their arbitrator. The plaintiffs also warned the defendants that in case they fail to nominate their arbitrator by 19-5-1973 the plaintiffs shall make application to the Liverpool Cotton Association Ltd. For appointment of arbitrator under the provisions of Rule 304(5)(b) on behalf of the defendants. The defendants, however, insisted on their demand of increase in price by 11.12% to enable them to effect the shipment.
4. ' The Liverpool Cotton Association Ltd., by its letter dated 25-5-1973 informed the defendants about the reference made to it and called upon them to appoint their arbitrator by 11-6-1973 failing which the matter will be referred to the Vice-President of the Association to take appropriate action. This Association by its letter dated 11-6-1973 informed Mr. J.H.S. Griffiths that the ex-President has appointed him as arbitrator on behalf of the defendants in exercise of powers under rule 304(5) (b) of the Bye-laws and the Rules of the Liverpool Cotton Association Ltd. Mr. Griffiths by his letter dated 12-6-1973 informed the defendants that he has been appointed by the ex-President and called upon the defendants to send him full instructions with evidence in support of the case before the end of June, 1973 failing which the arbitrator will be obliged to proceed with the case on the evidence supplied by the plaintiffs to its arbitrator. The defendants neglected and failed to send any reply and the arbitrator by letter dated 4-7-1973 intimated the defendants that in a preliminary meeting with the plaintiff's arbitrator he had been able to examine the evidence of contracts, letters and cables and unless the defendants refute it by 13-7-1973 he will be obliged to proceed on the basis of the evidence produced by the plaintiffs. The defendant's arbitrator by letter dated 17- 8-1973 informed the defendants that the arbitrators have completed technical arbitration and enclosed the award of the Liverpool Cotton Association.
5. ' In Suit No. 320 of 1975 the award was made on 7-8-1973 against the defendants for US $290,101.50 calculated on the basis of rate at 50.40 US Cent per lb. With interest @ 10% per annum from 14 days after the award till payment. In appeal filed by the defendants the damages were calculated on the basis of rate at US cent.4880 per lb. Plus interest @ 10% per annum from 31-8-1973 till the date of this award i.e. 9-1-1975. The defendants were thus to pay US $310,585.37 with interest at 12% from 19- 1-1975 till payment and costs.
6. ' In Suit No. 321 of 1975 US $51,566.95 were awarded calculated on the basis of rate at 50.15 US cent per lb. With interest as above. In appeal the damage was calculated on the basis of rate at 49 cent per lb. Plus interest awarded by the arbitrators. The defendants were to pay US $ 58,185.93 with interest and cost.
7. ' In Suit No. 322 of 1975 the arbitrators calculating damages on the basis of rate at 50.45 U.S. Cents per lb. Awarded US $499,804.86 with interest. In appeal the damage was awarded on the basis of the rate at 49.25 Cent per lb. With interest granted by the arbitrator. The defendants were to pay US $540,678.37 with interest and cost.
8. ' The plaintiffs have applied for filing the award and that judgment and decree be passed against the defendants in terms of the award.
9. ' The defendants have filed their objections. It has been denied that there was any concluded contract for the sale of cotton to the plaintiffs. The contract was expressed to be subject to the Rules and Regulations depending on destination of the cotton. It was denied that there was any agreement and the rules of Liverpool Cotton Association were applicable. It was pleaded that as there was no concluded contract, and it was at the stage of negotiation, the defendants were within their right to seek revision in the price due to devaluation. It was also pleaded that the plaintiffs acted wrongfully in appointing Liverpool as port of destination of cotton and or making the contract subject to bye-laws and rules of the Liverpool Cotton Association Ltd. It was admitted that the plaintiffs are members of this Association and the defendants are associate members and not full members. It was pleaded that the bye-laws of this Association do not apply. It was denied that the Association could nominate an arbitrator on behalf of the defendants or that any notice as alleged was received by them. A letter from Liverpool Cotton Association Ltd., was received, but as there was no concluded contract between the parties, and there was no agreement of arbitration, the letter was of no consequence and the defendants were not obliged to appoint any arbitrator. It was further alleged that Mr. J.H.S. Griffiths was appointed as an arbitrator on their behalf by an ex- President of the Association which was illegal. It was further pleaded that rule 304(5)(b) of the Bye- laws and rules was not applicable. The receipt of letter dated 12-6-1973 from Mr. Griffiths is admitted, but as the nomination was not accepted he was not entitled to proceed with the arbitration and the defendants were justified not to reply his letter. It was denied that Mr. Griffiths sent a letter dated 4-7-1973 to the defendants or that it was received. It was pleaded that the arbitrators assumed jurisdiction which was not vested in them and the award made by the arbitrators is invalid. It was pleaded that the award has not been made in pursuance of any agreement between the parties. The arbitrators were not constituted in the manner agreed upon between the parties. The award was not made in conformity with the provisions of the bye-laws of the Association. The award is not a foreign award and that the arbitrators and umpires were not independent and impartial Tribunal as the managing director of the plaintiffs was at the material time President of the Liverpool Cotton Association Ltd. The appointment of Mr. Griffith by the ex- President of the Association was not according to the rules and was invalid. That the enforcement of the award would be against laws of Pakistan and Public Policy and that the award is not stamped and is not a foreign award.
10. ' Mr. Rauf the learned counsel for the defendants contended that the award is not stamped and, therefore, it cannot be enforced. Similar objection was raised by the learned counsel in Nan Fung Textiles Ltd. V. Sadiq Traders Ltd. PLD 1982 Kar. 619 in which after exhaustive discussion I had observed that the foreign award is not chargeable with stamp duty. Mr. Rauf has invited my attention to Messrs Jugotekstile Impex v. Messrs Shams Texitle Mills Ltd. 1986 CLC 879 where a contrary view has been expressed by my learned brother Haider All Pirzada, J. I had the privilege to read this judgment, but with respect I am unable to subscribe with this view. In this judgment while relying on section 3, subsection (c) of the Stamp Act it has been observed that as the award relates to a matter or thing to be done in Pakistan it is chargeable with duty. There can be no cavil with the proposition' that section 3 of the Stamp Act is the charging section and any instrument which falls under it is chargeable with duty. Section 3(c) clearly provides that to attract chargeability the instrument should be mentioned in the schedule to the Act. Unless the instrument is mentioned in the schedule it cannot be charged under section 3(c). In Nan Fung Textile Mills' case it was held that the award mentioned in the schedule does not include a "foreign award" and, therefore, a 'foreign award' does not fall within the ambit of section 3(c). If an instrument is not mentioned in the schedule to the Act but "relates to any matter or thing done or to be done in Pakistan and is received in Pakistan", it cannot be charged with stamp duty. With respect I may say that this aspect of the controversy has not been considered in Jugotekstile Impex's case which merely proceeded on interpretation of last portion of section 3(c). In this regard Mr. Muhammad Ali Sayeed the learned counsel has relied on AIR 1951 Pepsu 24, I L R 49 Mad. 903 and PLD 1963 Kar.
962. In my view 'foreign award' does not require stamp duty.
11. ' The next contention of the learned counsel for the defendants is that there is no agreement of arbitration between the parties, therefore, neither the dispute could be referred to arbitration, nor arbitrators could have been appointed and proceeded with the matter. It is an admitted position that the contract between the parties concluded by exchange of cables and that the plaintiffs are members of Liverpool Cotton Association, whereas the defendants are its associate members. It seems that the plaintiffs had sent contract notes for the signatures of the defendants but they refused to sign it. However, on the basis of the contract concluded on exchange of cable part of the goods were supplied by the defendants in Suits Nos. 320 of 1975 and 321 of 1975 and payments were made by the plaintiffs. In this background it has to be considered whether there was agreement between the parties for referring the matter to arbitration. It is true that there is no written agreement signed by the parties for referring the matter to arbitration but it is not necessary that an agreement for arbitration should be signed by the parties. It is sufficient if the agreement is in writing. Even if it is not signed, the parties will be bound by it and the matter can validly he referred to arbitration. In this regard Mr. Muhammad Ali Sayeed the learned counsel for the plaintiffs has referred' to Messrs Hafiz Abdul Aziz Cotton Ginning Factory v. Messrs Haji Ali Muhammad Abdullah PLD 1966 Kar. 197, Messrs Jamal Jute Baling & Co., Dacca v. M. Sari & Sons, Dacca PLD 1971 SC 784, Mst. Shamim Akhtar v. Najama Begum and others PLD 1977 SC 644, Paracha Textile Mills Ltd., Karachi v. Nanak Ram Shamandas PLD 1977 Kar. 37, Messrs Hussain Bux & Co. v. Zebtan Textile Mills Ltd. PLD 1981 Kar. 28, Gul Ahmed Textile Mills Ltd. v. Starco 1981 CLC 1667, Shankar Lal Lachmidas v. Jamy Brothers AIR 1931 All. 136, Jaggal v. B.G. Hurmuzji AIR 1955 SC 812, Ramchandar Ram Nag v. Hussain Oil Mills and another AIR 1958 Cal. 620 and Banarsi Das v. Cane Commissioner U.P. And another AIR 1963 SC 1417. In all these authorities it has been held that the arbitration agreement should be in writing and shall be enforceable if agreed to even without the signature of any party. To constitute an arbitration agreement in writing it is not necessary that it should be signed by the parties. It is sufficient if the terms of the agreement are reduced in writing and consensus of the parties is established.
12. ' In the present case it is an admitted position that the parties are members of Liverpool Cotton Association Ltd. And they have entered into an agreement for sale and purchase of cotton. Article 140 of the Articles of Association of Liverpool Cotton Association Ltd. Provides that where any difference arises between the member, associate member or registered member concerning anything connected with the cotton trade or any transaction therein it would be referred to arbitration in accordance with rules. Therefore, the Articles of Association provide for referring the dispute to arbitration between member and associate member in respect of dispute arising from any transaction relating to the cotton trade. Where any person applies for the membership of a Society or Association whose rules provide for arbitration in dispute between its members and he becomes a member, by implication it amounts to an arbitration agreement between the members. Reference can be made to Abdul Aziz Cotton Ginning Factory v. Haji Lal Muhammad Abdullah PLD 1966 Kar. 197, Gordhardas v. Chandulal & Co. AIR 1952 Born. 349, and Rambakhsh Lachmandas v. Bombay Cotton Co. AIR 1931 Born.
81. By virtue of membership of Liverpool Cotton Association which provides for arbitration between the, members there exists an arbitration agreement between the parties. In these circumstances even if the parties have not signed any agreement for arbitration or the defendants have refused to sign the contract note sent by the plaintiffs containing arbitration clause the existence of arbitration agreement between the parties cannot be denied.
13. ' Mr. Rauf then contended that if for argument sake the agreement is spelt out, then it was vague and could not have been enforced unless Liverpool was made destination of the goods. This contention has reference to the contract notes sent by the plaintiffs which were not signed by the defendants. It speaks of the place of arbitration as place of destination of the goods. It does not impose any condition precedent for invoking the arbitration clause. Furthermore the arbitration is not being invoked under the contract note, but it is being invoked under the Articles of Association and the Rules governing such arbitration. The learned counsel for the defendants has referred to various authroities and section 29 of the Contract Act to show that agreement of arbitration is not enforceable due to uncertainty and vagueness. The question of vagueness and uncertainty does not arise as observed earlier, therefore, I need not refer to these authorities at all.
14. ' Mr. Rauf then submitted that the defendants had not participated in the arbitration, nor nominated the arbitrator who was appointed on behalf of the defendants by the ex-President of the Liverpool Cotton Association which was not a proper nomination under the Rules. Mr. Muhammad Ali Sayeed has referred to Rule 304 of the Liverpool Cotton Association Ltd. Bye-laws and Rules. Under Rule 304, Bye-laws and Rules of Liverpool Cotton Association Ltd. The dispute is to be referred to arbitration of two disinterested members one to be appointed by each party and such arbitrator shall have power to appoint an Umpire. An Umpire before giving the award shall be made acquainted with the view of the arbitrators. Sub-Rule 5(b) provides that in case of neglect or refusal by any party to appoint the arbitrator, the President on application made by either party may appoint arbitrator and if he is disqualified then the arbitrator shall be appointed by the Vice- President or by any Acting President. Under the rules President includes the Vice-President or any person appointed by the Director in accordance F with Article 108 to perform temporarily the duty of the President. Article 108 of the Articles of Association provides that if the President for any cause is not available to perform the duty then the Vice-President shall have the power to perform the same and if he is not available to perform that duty then the most recently retired President who is available shall have the power to perform the duties of the President. In the present case the ex- President has appointed the arbitrator on behalf of the defendants. In this regard the learned counsel for the plaintiffs has invited my attention to the affidavit filed by John Richard Anslie Daglish in which he has stated that the President of the Association was the Managing Director of the plaintiffs and was, therefore, an interested party and unable to act under Rule 304. The Vice- President was not available and, therefore, Mr. Patrick O'Connell who was the previous President of the Association appointed an arbitrator on behalf of the defendants. These facts have remained unchallenged and nothing has been brought on record to show that this does not portray the G correct factual position. In these circumstances the appointment made by the ex-President was valid under the Rules.
15. ' The learned counsel for the defendants then contended that the requirement of Rule 304(5)(b) to appoint arbitrator within three days is contrary to Arbitration Act, 1958 as section 7(b) requires appointment to be made within seven days. It was further contended that the Umpire was not appointed by the arbitrator immediately and, therefore, there was no valid proceeding. Mr. Muhammad Ali Sayeed the learned counsel for the plaintiffs has contended that under the Rules the arbitrator was not required to appoint the Umpire immediately and he could have been appointed in case the arbitrators disagree. He further contended that under the rules arbitrator was to be appointed within three days. All these provisions relating to appointment of arbitrator and umpire amount to terms of agreement between the parties. Therefore, contravention of sections 7 and 8 of the English Arbitration Act, 1950 does not arise as these provisions are subject to contract. The submissions made by Mr. Muhammad Ali Sayeed seem to be valid and on this account the appointment of arbitrators and umpire cannot be held to be in violation of the Arbitration Act, 1950.
16. ' Mr. Rauf then contended that the real dispute between the parties was not referred to arbitration.
17. According to him the real dispute was that the plaintiffs were required to revise and enhance the contracted price in view of the devaluation of Dollar. In fact this was merely a ground on the basis of which the defendants were refusing to supoly the goods. The contention of the defendants that they were read} to supply the goods on revision of rates does not mean that they were ready and willing to supply the goods in terms of the contract. Price is an essential element in a contract of sale of goods. If the seller requires the purchaser to raise the prices and only then he will supply the goods then it will not amount to due performance of the contract. The real dispute was whether the defendants were not ready and willing to supply the goods in terms of contract, and committed breach thereof and further what damages the plaintiffs were entitled to recover. This dispute was referred and adjudicated by the arbitrators.
18. ' The learned counsel for the defendants then contended that the claim of the plaintiffs was never communicated to the defendants nor any notice was given to them. It is not necessary that a party interested in referring the dispute to arbitration should first intimate the other I side about the claim. The learned counsel further contended that damages were not assessed according to law.
19. In two contracts, period was to expire in June, 1973 and before that the matter was referred to arbitration. The period of delivery of goods is fixed for performance of the contract, but if any party by his conduct or otherwise clearly manifests that he is not interested in supplying the goods or honour his commitment, then even before the expiry of the period of delivery the purchaser is entitled to claim damages or refer the matter to arbitration. The purchaser has two options, either to wait for the expiry of delivery period or in view of the breach committed by the seller revoke the contract and claim damages.
20. ' The last contention of the learned counsel for the defendants is that the award is not a foreign award. The learned counsel has referred to section 2 of the Arbitration (Protocol and Convention)
21. Act, 1937, Burlas Brother's case reported in PLD 1961 SC 573 and contended that unless Pakistan becomes member of the convention, by notification issued in 1938 and the amendment made by Ordinance 53 of 1962 Pakistan could not be treated as a party to the Convention. According to the learned counsel there existed no reciprocal arrangement between Pakistan and U.K. And the amendment made by Ordinance 53 of 1962 cannot be a substitute for the notification to be made under section 2 of the Arbitration (Protocol and Convention) Act, 1937. To substantiate his contention Mr. Rauf has referred to Dalmia Cement Ltd. v. National Bank of Pakistan (1974) 3 AER 183 'State Succession in Municipal Law and International Law' by D.P.O. Connell, 'The Transfer of Power in India' by V.P. Memon. Same objections were raised by the learned counsel in Nan Fung Textile Ltd. v.
22. H. Pir Muhammad Shamsuddin PLD 1979 Kar. 762 in which my learned brother Ajmal Mian, J. (as he then was) rejecting these contentions held that the award made in England was a foreign award enforceable in Pakistan. It would be pertinent to reproduce the observation as follows:- "(e) In my view no exception to Ordinance LIII of 1962 referred to hereinabove, can be taken as Mr. A.
23. Rauf was unable to point out that the above Ordinance has violated any Constitutional Provision or was enacted by the authority not competent to enact. It is the privilege or prerogative of the Government of Pakistan to decide as to whether the award given in a particular foreign country should be enforceable in Pakistan or not notwithstanding that the country in which the award has been given has not made any reciprocal arrangement for the enforcement of Pakistan awards as contemplated in section 2 of the Act. The Government of Pakistan has expressed its intention not through a notification but it has been manifested through an enactment and, therefore, I cannot decline to enforce the instant award on the ground that in England no reciprocal provisions have been provided for the enforcement of Pakistan awards. It may be pertinent to mention that this aspect was adverted to in the aforesaid SC of 1961, namely, Yangize (London) Ltd. v. Barlas Brothers (Karachi) at 583 wherein Hamoodur Rehman, J (as his Lordship then was) was pleased to observe as follows:- ' In this connection it might also be pointed out that for determining if the conditions mentioned in section 2 of the Act have been fulfilled it is neither necessary nor proper for the national Court to enter upon any investigation as to whether reciprocal provisions hav3 in fact been made in the country where the award sought to be filed was made for the enforcement of the awards made in Pakistan. In matters pertaining to international arrangement the Courts should act in aid of executive authority and should neither say nor do anything which might cause embarrassment to that authority in the conduct of its international relations. Thus, if the notification contemplated under the Act had been issued the national Courts would have been bound to hold that the conditions prescribed for treating an award as a foreign award had been fulfilled and would not have been entitled to go behind the notification and investigate whether reciprocal provisions did in fact also exist in the notified country.'
24. ' It is clear from the above-quoted para. Of the above judgment that I cannot enter upon any investigation on the question as to whether reciprocal provisions for the enforcement of the Pakistan awards have in fact been made in the country of which the award is sought to be filed in Pakistan for enforcing it cannot question the wisdom which prompted the Government of Pakistan to cause the enactment of the aforesaid Ordinance LIII of 1962.
25. ' In view of the above discussion I hold that the award in question is a foreign award and is enforceable in Pakistan."
26. 'I respectfully agree with the aforestated observation. In view of the above discussion I allow the petition (registered as suit) and order K that the award be filed. I accordingly pass judgment and decree in terms of the award with no order as to costs.