' This petition has been filed to challenge the arbitration proceedings reported to have been filed by the defendant No,1 and pending before the defendants Nos.2, 3 and 4 at Germany in pursuance of an arbitration agreement, which, according to the petitioner, is not in existence.
2. The facts to be noted are that the Petitioner deals in export of molasses. The respondent No,1 is a German Company which had, prior to the events in dispute in the present case, purchased molasses from the Petitioner in a number of instances. On December 14, 1989 the petitioner received a telex dated 13-12-1989 from the respondent No,1 requesting the petitioner to finally confirm two alleged oral contracts between the parties dated October 13, 1989 whereby the petitioner had allegedly agreed to sell and the respondent No,1 had purportedly agreed to buy the following quantities of Cane Black Strap Molasses:
(1) 20,000 metric tons at a rate of U.S. Dollars 54 per metric ton to be shipped between 24-12-1989 and 31-1-1990.
(2) 20,000 metric tons at a rate of U.S. Dollars 45 per metric ton to be shipped between 15-3-1990 and 30-4-1990.
(3) The case of the petitioner is that in fact no oral agreement as alleged had been entered into between the parties and the respondent No,1 had been so informed by the petitioner vide its telex (Annexure "D/3"). No doubt, there had been discussion between the petitioner and the respondent No,1 vis-a-vis the transaction in question but no contract had yet crystallised binding the petitioner.
Be that as it may, but according to the petitioner, further correspondence was exchanged between the parties but the petitioner consistently took a stand that no binding contract had been concluded between the respondent No,1 and the former. Notwithstanding the same, the respondent No,1 informed the petitioner by telex that they proposed to apply for arbitration under the rules of the Grain Association, Hamburg. Pursuant to the said telex the respondents Nos.2, 3 and 4 were appointed Arbitrators notwithstanding the protest from the petitioner. Thereafter the petitioner received a letter from Grain Association, Hamburg requesting it to nominate its own Arbitrator. The petitioner again protested vide Annexure "G" by requesting the Arbitrators to send it a copy of the so-called arbitration agreement but without any avail as the Arbitrators proceeded with the arbitration vide Annexure "H", and hence the Petition.
4. It may be pointed out that on an application filed by the Petitioner under Section 151, C.P.C.
Interim injunction was granted by this Court on 24-4-1990 restraining the respondents Nos.2 to 4 from acting as Arbitrators in the matter. Service of the notice was effected upon the respondents but none of the respondents has appeared and defended the present proceedings.
5. I have heard Mr. Khalid Anwar, learned counsel for the petitioner.
6. The first question that arises is, whether this Court has jurisdiction to entertain the present petition. Mr. Khalid Anwar has invited my attention to Section 47 of the Arbitration Act which provides that:- "47. Act to apply to all arbitrations.
Subject to the provisions of Section 46, and save in so far as is otherwise provided by any law for the time being in force, the provisions of this Act shall apply to all arbitrations and to all proceedings thereunder: Provided that an arbitration award otherwise obtained may with the consent of all the parties interested be taken into consideration as a compromise or adjustment of a suit by any Court before which the suit is pending.
7. It is pertinent to point out that if a contract had been concluded between the parties, in such case, under the rules applicable to the parties the Grain Association would have been empowered to nominate the Arbitrators in the matter. In that event the award given by the Arbitrators could only be challenged under the provisions of Arbitration (Protocol and Convention) Act, 1937.
However, in the present case since the Arbitrators have only entered upon reference the contention of Mr.Khalid Anwar is that the provisions of section 33 of the Arbitration Act are applicable in the present case. According to section 33, any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement can apply to the Court. In this regard Mr. Khalid Anwar has pointed out that even an alleged arbitration agreement would be covered by section 33 of the Arbitration Act. As to the question whether this Court has jurisdiction to entertain the present petition Mr. Khalid Anwar has placed reliance upon the case of M/s. Aslo Marines Ltd. v. M.T. Magda and another (PLD 1985 Karachi 745) wherein Naimuddin, J. (as he then was) while dealing with a somewhat similar question came to a conclusion that the Courts in Pakistan would have jurisdiction in the matter notwithstanding the fact that there was a clause in the agreement giving jurisdiction to a foreign Tribunal. It is pertinent to point out that in the present case neither the respondents have appeared before this Court nor they have filed any statement challenging the jurisdiction of the Court. Mr. Khalid Anwar has, inter alia, contended that it would not be just and fair to compel the petitioner to incur expenses and appear before the arbitrators in West Germany particularly when there is no arbitration agreement in existence between the parties. According to the learned counsel, one of the grounds, considered by Naimuddin, J. In the said judgment was the inconvenience that might be caused to the plaintiffs in case they were compelled to defend the matter before a foreign Tribunal. It would not be out of place to point out that conclusions were drawn by Naimuddin,J. After referring to various cases on the point both from our own as well as foreign jurisdiction. As to the merits of the case, as pointed out earlier, nothing has been placed before this Court by the respondents to rebut the allegations made in the Petition. From the various documents filed by the Petitioner before this Court, nothing can be spelled out to indicate that there was any concluded contract between the parties.
8. Consequently, I agree with Mr. Khalid Anwar that the appointment of the respondents Nos.2, 3 and 4 as arbitrators in such a case, would be null and void.
9. In the result, the respondents Nos.2, 3 and 4 are restrained from acting as Arbitrators in the case and the interim injunction earlier granted by the Court is confirmed.