' This appeal under section 39 of the Arbitration Act, 1940, calls in question the order of Civil Judge 1st Class, Lahore, dated 29th July, 1990, whereby he directed the appellant to file the arbitration agreement in Court.
2. An application under section 20 of the Arbitration Act, 1940 was filed by MA. Razzaq & Co. respondent herein, against the appellant, praying that the dispute between the parties in respect of non-payment of the bills, by the appellant for the construction carried out by appellant under the agreement dated 18th October, 1986, be referred for arbitration to the Arbitrator nominated by the parties, in the arbitration agreement contained in para. 12 of the said agreement.
3. In its reply the appellant pleaded that the agreement in question was null and void, having been produced by the respondent through fraud and misrepresentation and was, as such, not capable of being enforced. It was further averred that no valid dispute having arisen out of any valid agreement between the parties, the matter was not referable to arbitration.
4. By its impugned order, dated 29th July, 1990, the trial Court repelled the objections raised by the respondent and directed that the arbitration agreement be filed in Court. It may also be mentioned that before the trial Court the respondent filed an application under Order XIV, Rule 3 of the Code of Civil Procedure, praying that in view of the disputed questions arising from the pleadings issues may be framed. This application was rejected by the trial Court on the same day on which it passed the impugned order, namely, 29th July, 1990.
5. Mr. M. Saleem Sahgal, Advocate, has strenuously argued that as the appellant had denied the existence of arbitration agreement between the parties, it was incumbent upon the trial Court to had framed an issue in this behalf, which the appellant should have been allowed to lead evidence before the application under section 20 could have been decided. In the same context, it was pointed out by learned counsel that the application praying for framing of issues was filed by the appellant on 7th May, 1990, which was rejected summarily and arbitrarily by the trial Court. The learned counsel for the respondent has been heard.
6. As regards the contention of the learned counsel for the appellant that it was essential for the trial Court to have framed an issue as to the existence of the arbitration agreement and the dispute between the parties, suffice it to say that in the reply filed by the respondent, the execution of the agreement dated 14th August, 1990, was not denied. This document embodies the arbitration agreement in form of clause 12 thereof.
7. As the existence of the arbitration agreement was not disputed, there was hardly any need to frame any issue. It needs no gainsaying that an issue arises only when a material proposition of fact or law is asserted by one party and is denied by other. In the written reply filed by the appellant, the only plea taken was that the agreement has been procured from the respondent through fraud and misrepresentation, but again no details of fraud or misrepresentation were pleaded. It has been rightly observed by the trial Court that the question of fraud or misrepresentation has to be determined by the Arbitrator and not by the Court.
8. Learned counsel for the appellant has relied upon some judgments to show that where fraud and misrepresentation is pleaded, the Court should decide the issue before referring the same to arbitration. This argument of the learned counsel cannot be accepted in view of the clear pronouncement to the contrary by the Supreme Court of Pakistan in Lahore Stock Exchange Limited v. Fredrick J Whyte Group (Pakistan) Ltd. and others PLD 1990 SC 48, in which it has been ruled that the question whether the consent of a party to an agreement has been procured through fraud, coercion or misrepresentation is to be decided by the Arbitrator appointed by the parties and not the Court.
9. Mr. M. Saleem Sahgal, Advocate, attempted to distinguish this authority on the ground that in the precedent case, the arbitration agreement was very widely worded. With due respect, to the learned counsel, no such distinction appears between the two cases. The arbitration agreement in the present case is equally, if not more vastly worded. Clause 12 of the agreement dated 18th October, 1986 postulates that any dispute or difference arising between the parties out of the agreement has to be decided through arbitration. The words 'any dispute' are of wide connotation and amplitude and clearly negate the argument of the learned counsel for the appellant.
10. It is also to be noted that neither the particulars of fraud nor of misrepresentation, were set out in the written reply and to say the least, the plea in this behalf was highly vague and lacking in essential particulars. For this reason also the trial Court was correct in not proceeding to decide this question itself.
11. The last contention of the learned counsel for the appellant was that no dispute at all had arisen between the parties, which could be referred to arbitration. I must confess that I have been unable to understand this argument. From a bare perusal of the application under section 20 and its reply, the dispute between the parties becomes self-evident, which is that despite demand made by the respondent, the appellant has not paid the running bills, the amount of which has been mentioned in para. 5 of the petition as Rs,57,98,270. In the above-cited case of the Supreme Court of Pakistan viz. Lahore Stock Exchange Limited v. Fredrick J. Whyte Group (Pakistan) Ltd. and others PLD 1990 SC 48, a similar contention raised was repelled by observing in para. 18 as under:--##TV## "18. Lastly, it was argued by Mr. K.MA. Samdani, that respondent No,1 had not specified the dispute in the application. He had made only vague reference as to the existence of the dispute. Therefore, it is necessary to refer to the averments made in the application. In para. 1 of the application, the respondent No,1 had referred to the arbitration agreement viz. clause 12 annexing thereto a copy of the agreement and stating that thereby the parties agreed that differences arising thereunder shall be referred to arbitration under the auspices of the respondent No,2. He further stated 'that such differences have arisen and are still subsisting between the two parties to the agreement'. It was open to the appellant to ask for further and better particulars of the dispute. Nonetheless the respondent No,1, stated the same in the replication which have been quoted in extenso hereinbefore. Therefore, the appellant as well as the Court knew what was the dispute between the parties and what was the claim of the respondent No,1 which was required to be determined by the arbitrator."
' For the reasons aforesaid, there is no force in this appeal. It is dismissed in limine.