1. Respondent No.2 was appointed as an agent under the name and style of Respondent No.1 by the appellants for the sale and distribution of their several publications in Rawalpindi. The agreement appointing respondent I4o.2 as an agent was terminated. Feeling himself aggrieved of the termination of his appointment as an agent, he filed a suit for damages against the appellants.
2. During the pendency of the suit filed by the respondents, the appellants filed an application under section 34 of the Arbitration Act praying that the suit be stayed for the reasons that there was an arbitration clause in the agreement between the parties appointing respondent No.2 as an agent which provided that in the event of a dispute arising between the parties, the same shall be referred to the arbitrator named as such in the agreement. The said application was resisted by the respondents. The application under section 34 of the Arbitration Act was rejected by the learned lower Court vide its order, dated 5-7-1997. The present F.A.O. Is directed against this order of the learned trial Court whereby it refused to stay the suit. The appellants wanted Mir Shakeel-ur- Rehman's who was then defendant and at present appellant No.5 to be appointed as an arbitrator to resolve the dispute between the parties. The learned trial Court was of the view that appointing Mir Shakeel-ur-Rehman's who was a defendant in the suit as an arbitrator would amount to making him a Judge in his own cause. Learned counsel for the appellants in support of the F.A.O.
3. Placed reliance on judgment reported as Director Housing, Adjutant-General's Branch, Rawalpindi v. Makhdum Consultants Engineers and Architects 1997 SCM R . 988 relevant portion is at page 997 para. 7.
2. Maulvi Anwar-ul-Haq, Advocate appearing on behalf of the respondents resisted the F.A.O.
4. Interestingly enough, he also placed reliance on the same judgment i.e. 1997 SCM R 988. However, the portion he relied upon is at page 997 para.6 and page 998 para.9. Learned counsel for the respondents submits that the facts of this case are distinguishable from that of the judgment relied upon by the learned counsel for the appellants. Precisely the submission of the learned counsel is that in the reported case Adjutant-General of the Pakistan Army was agreed to be appointed in the agreement as an arbitrator in the event of a dispute arising between the parties.
5. The High Court did not approve the appointment on the ground that one of the parties had been directly dealing with the said Adjutant-General and the other party could not repose confidence in him. However, when the matter came up before the Honourable Supreme Court, the Honourable Supreme Court reversed the findings of the High Court on the around that the Adjutant-General of the Pakistan Army whose appointment as an arbitrator was objected to by one of the parties had retired long long ago and had in the meantime been superseded by two of his successors in the office. The Honourable Supreme Court thus, came to the conclusion that against the Adjutant- Generla of the Pakistan Army, who had thus, come to occupy the said office after the retirement of the First Adjutant-General, no such allegation existed or could be made as was the case of the First Adjutant-General with whom one of the parties had been directly dealing. It was in this view of the matter taken by the Honourable Supreme Court that the objection to the appointment of the subsequent Adjutant-General was repelled by the Honourable Supreme Court and the judgment of the High Court reversed. Such, however, is not the case in the instant appeal, Mir Shakeel-ur- Rehman's, the named arbitrator in the agreement has neither retired nor has been replaced by anyone else in his place lie himself is a contesting defendant in the suit brought by the respondents being defendant'No.5. Appointing him as an arbitrator and referring to him the dispute between the parties would amount to making the said Mir Shakeel-ur-Rehman's as a Judge in his own cause which would be nothing but a mockery of justice. Being a party to the suit as a contesting defendant, he shallnot be able to act fairly, justly, independently and without bias.
6. Reliance, therefore, on the judgment reported as 1997 SCM R 988 by M. Asad Ullah Siddiqui, learned counsel for the appellants is of no avail. The appeal filed by the appellants is misconceived and is dismissed and the decision of the learned trial Court whereby he refused to stay the suit and appoint Mir Shahkeel-ur--Rehman's as an arbitrator for the resolution of the dispute between the parties is upheld. The parties are directed to appear before the learned trial Court on 1-3-1999. The learned trial Court shall proceed with the suit and decide the same within a period of six months.
7. The parties are left to bear their own costs.