1. ' Brief facts of the matter are that the appellant is a limited company carrying on business of manufacturing and production of electronic goods. The respondent deals in manufacture of electronic appliances. On 26-4-1979 the appellant and respondent entered into an Agreement called "Manufacturing Licence Agreement" under the terms and conditions given therein. The agreement was initially for a period of 2 years and subsequently was renewed from time to time by consent of the parties, the last such renewal was upto December 1992. The respondent by letter dated 15-12-1992 informed the appellant about their intention not to renew the said agreement due to fall in business. Correspondence was exchanged between the parties. The Chief Executive of the appellant also went to Japan to discuss the matter but the agreement was not renewed by the respondent. Appellant by their letter dated 24-4-1994 requested the respondent to open L/C so that the parts lying in the warehouse could be sent back to Japan otherwise the same were liable to be auctioned which would cause great loss to the appellant. But the respondent refused to open L/C. The appellant after availing all avenues open filed the suit for the following reliefs:
(a) Permanent mandatory injunction against the defendant No,1 to open L.C. For Japanese 2. Billion Yen equivalent to Rs,625,000,000 at todays rate in favour of the plaintiff so as to obtain/purchase/receive back the entire parts meant for use in manufacturing Sony T.V. Sets fully detailed in the Schedule 'X' appended hereto.
(b) Permanent injunction restraining the defendants severally and jointly, their agents, servants, employees and personal claiming through or under them or any of them importing in Pakistan any parts as detailed in Schedule 'X' till entire stock detailed in Schedule 'X' is lifted and taken over by the defendants from the plaintiff.
2. ALTERNATIVELY: Pass the judgment and decree in favour of the plaintiff and against the defendants for Japanese Yen two billion equivalent to Rs,625,000,000 at todays exchange rate, being the cost of parts as detailed in Schedule 'X' hereunder.
(c) Cost of the suit.
(d) Any other relief which this Hon'ble Court may deem fit and proper."
3. ' After service the respondent filed written statement and application under order 7, Rule, 11, C.P.C., bearing C.M.A. No,6025 of 1994, mentioning therein that the agreement between the respondent and the appellant held stood terminated w,e,f, 31-12-1992 and the intimation that the same is not to be renewed was made clear in letter of the respondent dated 15-12-1992. Moreover even agreement provides in Article 10(1) that: "It is expressly understood and agreed between the parties hereto that this agreement shall automatically terminate as of December 31, 1992 without any notice and that neither party shall have any obligation to renew or extend this Agreement after December 31, 1992. Tacit renewal or extension of this Agreement is excluded, and any eventual continuation of the cooperation between the parties hereto after the above termination date shall in no way be construed as a renewal or extension of this Agreement."
4. ' Notice of this application was issued to the appellant. Consequently learned Single Judge vide order dated 17-1-1996 allowed the application and rejected the plaint.
5. ' Being aggrieved and dissatisfied with the order of the learned Single Judge the present appeal has been filed.
6. ' We have heard Mr. Sarmad J. Osmani, learned counsel for the appellant, who had contended that the learned Single Judge while disposing of the application under Order 7, rule 11, C.P.C. Infact has decided issues arising out of the pleadings of the Suit bearing No,533 of 1994 without recording any evidence and has committed error of law. That the learned Single Judge has relied upon the various clauses of the agreement dated 1-1-1991 in reaching the conclusion and the interpretation of the agreement without recording evidence cannot determine the rights and obligations of the parties and the same cannot be made basis of whether or not the plaint in Suit No,533 of 1994 was fit to be rejected. That the learned Single Judge has reliet upon Article X(1) of the Agreement which provides for termination of the same on 31-12-1992 and thereafter, provides that there shall be no tacit renewal of the same and further cooperation between the parties shall in no way be construed as a renewal or extension of the agreement. That the rights and obligations of the parties cannot be so easily ascertained based only upon the written agreement between the parties. That the learned Single Judge has ignored the correspondence initiated by the appellant with the respondent which require that the matter involved needs framing of issues and recording of evidence between the parties. That the learned Single Judge had incorrectly upheld clause X(2) of the Agreement which confers exclusive jurisdiction upon the Tokyo District Court with regard to the adjudication of the disputes between the parties as it is the settled law of the land that the jurisdiction of the Pakistani Courts cannot be ousted by Agreement between the parties. Learned counsel has relied upon PLD 1970 SC 373, PLD 1976 Karachi 21, PLD 1978 Karachi 273, 1993 SCMR 866, PLD 1993 SC 42 and PLD 1994 Lahore 525.
7. ' We have also heard Mr. E.A. Nomani, learned counsel for the respondent, who had contended that actually no assurance was given by the respondent to the appellant for extension of the agreement. That Article X(1) of the Agreement is very clear which provides that the agreement will automatically stand cancelled on 31-12-1992 without any notice. That under Article X(6) a period of 30 days after termination of the agreement was provided for repurchase of the goods by the licensor which was not availed of by the appellant as such no cause of action has accrued to the appellant. That the contract was terminated according to the terms of the agreement and the learned Single Judge has very rightly allowed the application under Order 7, Rule 11, C.P.C. Since the plaint itself does not disclose any cause of action.
8. ' Mr. E.A. Nomani in support of his contention has relied upon 1992 SCMR 1174.
9. ' It would be pertinent to refer Manufacturing License Agreement which is Annexure 'A/2'. That the agreement which was signed by the parties and was reduced into writing after going through the same the parties put their signatures. Article X(1) provides as follows: "(1) This Agreement shall become effective, subject to the approval of competent Government authorities of both Islamic Republic of Pakistan and Japan, as of the 1st day of January, 1991, and unless sooner terminated in accordance with the provisions hereof, shall continue in full force and effect up to the 31st day of December, 1992. It is expressly understood and agreed between the parties hereto that the Agreement shall automatically terminate as of December 31, 1992 without any notice and that neither party shall have any obligation to renew or extend this Agreement after December 31st, 1992. Tacit renewal or extension of this Agreement is excluded, and any eventual continuation of the cooperation between the parties hereto after the above termination date shall in no way be construed as a renewal or extension of this Agreement.
(2) The Licensor reserves the right to terminate this Agreement upon fifteen (15) days prior notice in writing to the Licensee in the event that:
(a) The Licensee shall breach any of the covenants, obligation, terms or conditions of this Agreement; or
(b) The Licensee shall be adjudicated a bankrupt; make an assignment for the benefit of its creditors; or take advantage of any insolvency act; or
(c) There shall be any change in the control, management or personnel of the Licensee which is unacceptable to the Licensor; or
(d) The Licensee shall cease to function as a going concern or to conduct its operations in the normal course of business; or
(e) The Government of the Territory shall enact any law or regulation which would have the effect of limiting the Licensee's right to import components from the Licensor, or to effect payments as provided for in this Agreement, beyond the limitations, if any, in effect at the time this Agreement is entered into.
(6) Within thirty (30) days after the termination of this Agreement, unless a I new Agreement in writing shall have been entered into between the parties relating to the subject-matter of this agreement, the Licensor may, at its option, repurchase from the Licensee at the purchase price paid by the Licensee to the Licensor, plus actual ocean freight charges and duty, if any, paid thereon by the Licensee, either all or any of the Components then in the possession of the Licensee.
10. Within such period, the Licensor may also, at its option, purchase from the Licensee either all or a portion of the models, both in their finished and semi-finished state, then in the possession of the Licensee at a price equal to the cost (Components and direct labour only) incurred by the Licensee incident to the manufacture thereof. In the event of such election by the Licensor, the Licensee shall be obligated to ship such components and/or models to the Licensor, and/or to such third party as the Licensor shall specify F.O.B. Point of shipment, and the cost thereof shall be payable within ten
(10) days after the said components and/or models shall have been received by the Licensor.
11. ' Article XIV (1) and (2) provides as follows:
(1) This Agreement shall be construed and governed by the laws of Islamic Republic of Pakistan.
(2) All controversies and disputes arising out of or relating to this Agreement shall be submitted to the following Court of law. If the action is instituted by the Licensee, such action shall be filed with the Tokyo District Court in Tokyo, Japan as the Court of first instance, and if the action is instituted by the Licensor, such action shall be filed with the Court of Law in the territory with competent jurisdiction as the Court of first instance; provided, however, that any counter-claim shall be filed with the Court with which the original action is filed. The parties hereto agree that the judgment, decree or order rendered by a Court of last resort or a Court of lower jurisdiction from which no appeal has been taken in Japan or in the territory, as the case may be, shall be final and binding upon both parties.
12. ' Through letter dated 15-12-1992 the respondent informed the appellant that: "It is our great regret that we are not in a position to renew the above said agreements with the reasons Mr. Kawasaki mentioned during the meeting, but please understand that we have been withstanding the low-volume business with you for almost two years.
13. ' As for the pledged stock only, we are ready to discuss the extension of manufacturing license, as an exceptional case, to help your operation. We will contact you separately."
14. ' Again through letter dated 1-3-1993 the respondent informed the appellant that: "But, after all, it is our great regret that we are still not in a position to renew the above said agreements with the reasons we have explained to you many times."
15. ' The appellant carried on the correspondence with the respondent and through ' letter dated 16-6-1994 requested the appellant for opening of the L/C in the following terms: "Before concluding, I will once again ask you to open the L/C of Two Billion Yen for the stocks lying at Karachi and Hatter lest it may result in complication because, you will agree with me, that I will not quitely suffer the loss and shall be left with no alternative but to approach the forum so as to get compensation and damages to cover the loss."
16. ' In correspondence the respondent through letter dated 4-7-1994 intimated the applicant as follows: "Further, Heil did not take any steps to solve the kit parts issue when it first arose. For example, instead of responding to our suggestion to discuss a Limited Manufacturing License for the confiscated Kit parts, you merely persisted in asking for compensation for a 'loss' with which Sony had nothing to do, and then kept silent until this May letting the kit parts deteriorate.
17. ' In summary, we disagree with your allegations that it was the actions of Sony rather than heil which caused these problems, and therefore, will not be opening a L/C as requested."
18. ' In this background of the matter viz agreement itself and the correspondence carried on by the parties between themselves. We try to discuss the case laws referred Mr. Sarmad J. Osmani, learned Advocate as follows:- ' PLD 1970 SC 373 M.A. Chowdhury v. Messrs Mitsui O.S.K.
19. Lines Ltd. And 3 others ' In this case their lordship of Hon'ble Supreme Court considering the provisions of section 28 of the Contract Act have held, Foreign jurisdiction clause in contract-Burden to satisfy Court as to justification for staying proceedings-Lies on party invoking such jurisdiction clause. The facts of the matter are that the appellant who was the sole proprietor of M/s M.A. Chowdhury & Co., and carried on import and export business as a general merchant, imported through his bankers, M/s. Habib Bank Ltd. 115 coils of M.S. Balck Wire from Japan. The above consignment was shipped from Osaka, Japan, per S.S. Kyushu Maru owned and controlled by the respondent, M/s. Mitsui O.S.K. Lines Ltd.
20. Under a bill of lading to Chittagong Port. The vessel berthed at Chittagong port on the 27th of March, 1965 and M/s Birds (Pakistan) Agencies Ltd. Acting as agents of the owners of the vessel took necessary steps under section 64-D of the Sea Customs Act for loading her cargo. The consignment of the appellant was, however, short landed as per certificate issued by the Chittagong Port Trust on the 3rd of September, 1965. The Appellant claimed for the loss thereby suffered from the local agents of the owners of the vessel as also lodged a claim with the insurers, the respondent MIs. Eastern Insurance Co. Ltd. Ultimately, the appellant filed a suit in the Court of 3rd Subordinate Judge, Chittagong, claiming Rs,22,000 with interest thereon as damages for the loss suffered by him and for costs. In the suit the owners of the vessel, their local agents and the trustees for the port of Chittagong were made defendants. The insurance company and the clearing agents of the appellant were added as pro forma defendants. The owners of the vessel and their local agents filed an application under Order VII, rule 10 of the Code of Civil Procedure, alleging that since the bill of lading provided that "any dispute arising under this bill of lading shall be governed by Japanese law except as may be otherwise provided herein and any such dispute shall be decided by Tokyo District Courts in Japan", the Courts at Chittagong had no jurisdiction to try the suit. In this background, the matter reached tpto the Hon'ble Supreme Court and their lordship allowed the appeal and remanded the case back w the trial Court to consider in accordance with law was whether the suit filed before them should or not should be stayed. On the face of it the facts of the above referred case in our opinion are different and distinguishable from the facts of the appeal in hand.
2. PLD 1976 Karachi Seven Star Goods Transport Co. Karachi v.
21. 21 The Administrator, Karachi Municipal Corporation, Karachi In this matter it has been held that the Court while considering question of cause of action should apply its mind to facts in plaint and not to any other matter. Vagueness in pleadings-Proper course, party to be ordered to remove vagueness and not to reject plaint. With due respect to the authority, we are of the considered opinion that this authority is also not helpful to the case of the appellant. In the matter under hand learned Single Judge has not only considered the contents of the plaint but have also minutely examined the agreement which is the back bone of the matter and the subsequent correspondence carried on by the parties and in view of the above matter the plaint has been rejected by the learned Single Judge considering the entire legal position. PLD 1978 Karachi Messrs Mercantile Fire & General Insurance 273 Co. Of Pakistan Ltd. Karachi v. Messrs Arcepey Shipping Co. U.S.A, and another.
22. ' In this matter a consignment of iron and steel scrap for remelting and re-rolling weighing 216 Metric Tons was shipped from Dubai to Karachi per m.v. "Al-Hassan" owned by Messrs Arcepey Shipping Co. S.A. Panama, defendant No,1, under Bill of Lading No,2, dated 5-8-1975. After the discharge pf the cargo, it is claimed by the plaintiff, that a joint survey was carried out by the Surveyors appointed by the plaintiff and defendant 1, who found the consignment to be short in weight. Plaintiff filed suit for recovery of Rs,49,737.54 to the value of the consignment short landed.
23. The plaintiff has also joined Messrs General Shipping Agencies, as a party to the suit. The defendants filed written statement and took the plea that the Court had no jurisdiction to try and entertain the suit and the same is liable to be stayed pending adjudication in terms of the jurisdiction clause contained in the Bill of Lading. Defendant also filed an application under section 151, C.P.C., praying stay of the further proceedings in the above suit and directing the plaintiff to have the claim adjudicated in terms of the jurisdiction clause.
24. ' We are afraid on the face of it, the facts of this case, in any case, are not relevant for the decision of this appeal. PLD 1993 Supreme Court Messrs Eckhardt & Co, Marine 42 GmbH v. Muhammad Hanif ' In this matter their lordship of Hon'ble Supreme Court after considering the provisions of Arbitration Act observed that the two Courts below have exercised jurisdiction under section 34 of the Arbitration Act against the appellant by refusing to stay the suit and the above exercise of discretion could not be said to be perverse, arbitrary or capricious and refused to interfere with the same.
25. ' Herein in this matter none of the parties have requested for arbitration before the learned Single Judge. Under the circumstances, with due respect to the authority the same is not relevant.
5. 1993 SCMR 866 M/s Uzin Export & Import Enterprises for Foreign Trade v. M/s M. Iftikhar & Company Ltd.
26. ' Here also in this matter there lordship of Hon'ble Supreme Court have considered the provisions of Arbitration Act and dismissed the appeal. Likewise as mentioned hereinabove in the present matter arbitration in any case is not involved. PLD 1994 Lahore Messrs Rupali Polyester Ltd. v. Dr. 525 Nael G. Bunni and others.
27. ' In this matter learned Lahore High Court considered the provisions of Arbitration Act, Private International Law and held that Award rendered by an arbitrator is lifeless and is not capable of being executed till such time the life is infused into it by the Court by passing a decree in accordance with the same, and that the arbitration agreement between the parties does not have effect of debarring the Court of its jurisdiction. Whereas in this matter neither the matter has been referred to Arbitrators nor the parties agitated the same before the learned Single Judge. Here in this appeal also it has not been taken by this learned-counsel for the parties. Learned Single Judge has considered the contents of the plaint, written agreement and subsequent correspondence between the parties dealt with since the plaint does not disclose any cause of action so the same was rejected.
28. ' We also want to discuss the case law cited by Mr. E.A. Nomani, learned counsel for the respondent as follows:- ' 1992 SCMR 1174 Messrs Kadir Motors (Regd.) Rawalpindi v. Messrs National Motors Ltd. Karachi.
29. ' In this case the appellant challenged the order of learned Single Judge of Lahore High Court dated 21-3-1990. The sole question for determination in the appeal was whether the controversy between the parties could only be adjudicated by the Karachi Court and the Court at Rawalpindi had no jurisdiction in the matter. After discussing the provisions of section 20, C.P.C., and the case decided by their lordship viz State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem (1987 SCMR 393) the appeal of the appellant was dismissed.
30. ' In our opinion the case law cited by Mr. E.A. Nomani is helpful and relevant to the facts of the present case.
31. ' We have gone through the material placed with the matter and we have also minutely gone through the authorities referred by the learned counsel for the parties and the provisions of section 28 of the Contract Act. The Manufacturing Licence Agreement has also been perused particularly Articles X (1) to 10(6) which show that the agreement actually automatically stood terminated with effect from 31-12-1992 and such intimation was given to the appellant that there will be no further renewal and such letter was communicated to the appellant by the respondent. Subsequent correspondence initiated by the appellant with the respondent and the reply to the respondent referred to earlier clearly shows the respondent had refused to extend the agreement and that the appellant was also provided an opportunity to seek extension only to the extent of using the pledged stock which arrived on 20th, 21st and 27th January, 1993 but the appellant did not avail the same with the respondent and the matter thereafter ended and there was no further re-export or re-purchase of the pledged stock by the respondent. Clause (1) of Article XIV provides that the agreement shall be construed and governed by the laws of Islamic Republic of Pakistan whereas the clause (2) provides that all controversies and disputes arising out of or relating to this Agreement shall be submitted to the following Court of Law. If the action is instituted by the Licensee such action shall be filed with the Tokyo District Court in Tokyo Japan as the Court of first instance and if the action is instituted by the Licensor, such action shall be filed with the Court of law in the territory with competent jurisdiction as the Court of first instance. In view of the above provisions, the agreement is to be governed by the laws of Islamic Republic of Pakistan. The respondent have not denied the jurisdiction of the Courts in this Country whereas they have rightly agitated the matter with the learned Single Judge that the plaint does not disclose any cause of action. Apart from the vagueness which itself is mentioned by the appeallant in the plaint but the same was not discussed by the learned Single Judge. The same was also neither discused in the order of the learned Single Judge nor we are going to discuss the same. The provisions of agreement and subsequent correspondence referred and discussed hereinabove clearly show that the agreement itself was not renewed at all. The case laws cited by Mr. Sarmad J. Osmani in our humble opinion are not relevant and applicable to the facts of the present case. Whereas the case law cited by Mr. E.A. Nomani is relevant and helpful for the case of the respondent in this matter.
32. ' Under the circumstances, we do not find any deficiency, irregularity or illegality in the impugned order passed by the learned Single Judge and the same is quite within the four walls and within the parameter of the provisions of Order VII, rule, 11, C.P.C. Based on the Manufacturing License Agreement which is A basis of the suit, its subsequent correspondence and refusal of the respondent to renewing the agreement.
33. ' For the foregoing facts and case laws, we are of the considered opinion that the appeal is devoid of merits and substance which must fail, the same is hereby dismissed with no order as to costs.
34. ' After hearing of the learned counsel for the parties on 10-12-1997 the appeal was dismissed by short order. Above are the reasons for the same.