SYED DEEDAR HUSSAIN SHAH, J. -- We intend to dispose of both these appeals with common judgment as the parties, facts and case-law are same and common.
2. Facts of the matters are that the appellant No. 1 and respondent No. 1 entered into an agreement dated 14.6.1996 through which respondent No. 1 appointed appellant No. 1 as its exclusive agent for sale of its textile chemicals, which are used in the processing of various textile fabrics and was subject to the renewal. The appellant on the basis of the agreement and for bona fide promotion of the market of the contracted products in order to implement its obligation incurred huge expenses, the benefit of which was to go exclusive to respondent No. 1. As per the agreement, the appellant No. 1 has exclusive right of marketing the product and the agreement was irrevocable in nature involving huge investment. The appellant imported in Pakistan huge quantity of the product under orders placed by various customers, in view to enhance the business of respondent No. 1 in Pakistan and to reduce freight costs and customs duties, an agreement was struck between the respondent No. 1 and the appellants Nos. 1 and 3 that a chemical processing plant be established in Pakistan and the respondent agreed to sell its plant namely SANDO, which Had ceased production in December, 1995 to the appellant No. 3 for a price in US $ but the plant has not been Delivered till the date, despite several requests. As consequences whereof the appellants Nos. 1 and 3 have suffered loss to the tune of US $ 750,000/- and on account of dispute with customs authorities on account of different classifications by the respondent, the appellant's reputation with the customs authorities was ruined which led to loss of the business to the appellants and indebtedness to its bankers and it was agreed between the appellants that all sales of the subject products would not be routed to Pakistan through appellant No. 4, who entered into a binding contract with customers with a view to protect the respondent No. 1 from direct liability and privity of contract. The appellant No. 4 directly contracted with the customers to supply textiles chemicals processing ingredients at the agreed prices. Such orders were communicated to the respondent No. 1, whose representative affirmed to supply the goods at the agreed price. The respondent with mala fide motives called upon the appellants to enhance the price of the contracted goods. This was made without notice and without considering that the appellants Nos. 1, 3 and 4 had contracted for supply of these chemicals to their customers including the appellant No. 2. They refused to supply the goods despite enormous sum spent by the appellant in promoting its products. Meetings were also held in this regard.
3. The respondent without any lawful authority through fax dated 1.4.1998, unilaterally, mala fidley and unlawfully informed the appellants that it has terminated the contract with immediate effect, which was received by the appellant on 4.4.1998, which has been termed by the appellants mala fide, arbitrary, unilateral and unlawful. The suit was filed with the following prayer:-
(A) For Declaration that the Agreement dated 14.6.1996 is valid, subsisting and binding upon the parties and cannot be terminated unilaterally by the defendants and the plaintiff No. 1 continued to be the sole agent of the defendant No. 1 in Pakistan.
(B) Permanently restrain the defendants and/or anyone else claiming or acting through or under them from appointing any other agent except the plaintiff No. 1 for the sale of their (defendants) textile chemicals in Pakistan and/or conducting any business in subject of a contract/Agreement dated 14.6.1996 entered between the plaintiff No. 1 and the defendant No. 1.
(C) Grant to the plaintiffs a sum of US $ 5.8 million less the accounting value of the goods that the defendants consigned to the plaintiffs keeping into consideration the effect of devaluation of Pak rupees.
(D) Grant to the plaintiff No. 2 all consequential damages which shall be proved at the trial of the suit.
Now we would like to take-up HCA No. 129/98. in this appeal the appellants have impugned the order passed by the learned Single Judge on 2.6.1998. Alongwith the suit the appellants filed CMA No. 3879/98 and the learned Single Judge on 13.4.1998 passed the following order on this CMA:- "Mr. Faruq H. Naek, Advocate for the plaintiff.
It is contended by Mr. Faruq H. Naek that the letter dated 1st April, 1998 (Annexure T to the plaint) was issued by the defendants in violation of Articles 20.2 and 20.3 of the International Agency Contract dated 14th June, 1996. it is further contended that the Agency awarded to the plaintiffs was not simpliciter agency but it was coupled with perpetuate the interest. Issue notice to the defendants, in ordinary course as well as through air courier service and Fax, for 28.4.1998. Till then, the defendants are required to maintain status quo. Office is directed to supply copy of notice under cover in hand to Mr. Faruq H. Naek, Advocate who will fax the same to the defendants and will file its compliance report."
Subsequently CMA Nos. 5256/98, 5426/98 and 5427/98 were filed. Learned Single Judge after notice to other side passed interim orders on these applications on 2.4.1998 which has been impugned in HCA No. 129 of 1998.
4. Mr. Faruq H. Naek, learned counsel for the appellants contended that learned Single Judge vacated the injunction granted on 13.4.1998 in favour of the respondent No. 3 who is yet to be made a party to the suit and the relief granted to the Intervenor is not warranted by law. That the learned Single Judge failed to appreciate that the appellants have prima facie demonstrated that their agency was irrevocable in that they had incurred substantial expenditure relying upon the agency and with the knowledge and consent of the respondents Nos. 1 and 2 and that the agency was irrevocable despite the provision of Article 13.2 of the Agency Agreement. That the learned Single Judge failed to appreciate that irreparable loss would be caused to business and reputation of the appellants and that they would be virtually turned out of business if the respondents Nos. 1 and 2 were permitted to appoint a new agent. That the appellants were not heard in the matter as their counsel was on general adjournment.
5. Mr. Agha Faqir Muhammad, learned counsel for the respondents Nos. 1 and 2, contended that the subject contract being revocable in nature has been validly terminated under Article 20 of the Agency Agreement. That the appellants are not entitled to any interim injunction as the subject- contract of which the suit has been filed and the appeal is preferred has already been terminated on 1.4.1998 much before the appellants filed the suit in the Court. That appointment of M/s. Efembee Enterprises as the new Agent of the respondents in Pakistan was well within the knowledge of the appellants prior to the filing of the suit. That the impugned order was passed by the learned Single Judge after service of notice of the respondents 1 and 2's application under Order 39, Rule 4, and Section 151, CPC (CMA No. 5256/98) on the appellants, which notice was issued by the office, and copy of the said application was also sent by the respondents' Advocate by their fax letter No. MK/FF/08600, dated 26th May, 1998 to the appellants Advocate. That the impugned order was passed by the learned Single Judge after hearing both the parties.
6. Mr. Zahid F. Ebrahim, learned counsel for the respondent No. 3, contended that the disputed agency in any case was not irrevocable. That the respondent was appointed as agent on 2.4.1998 after termination of appellant's agency on 1.4.1998. That the termination of the Agency Agreement dated 14.6.1996 was not in any manner illegal or mala fide. That the termination as is evident from the documents annexed with the plaint itself, clearly show that it was in accordance with the law and the express termination clause in the 14.6.1996 agreement. That the agreement dated 14.6.1996 was terminated by the respondent No. 1 on 1.4.1998 and the respondent No. 3 was duly appointed as the exclusive agent of the respondent No. 1 on 2.4.1998. That on 4.4.1998 the respondent No. 3 placed an order for one FCL Container of Solvitose C5HV ("the said goods") with the respondent No.
1. This order was duly accepted and the respondent No. 3 opened an L/C for the said goods on 6.4.1998. That respondent No. 3 also entered into various agreements for the supply of the said goods to local silk manufacturers who require the said goods for manufacture of silk products.
Furthermore the respondent No. 3 has made valuable investments and expenditure in the promotion and sale of the said goods. That even according to the suit the respondents Nos. 1 and 2 approached a third party for appointing them as agents. That it was within the knowledge of the appellants prior to filing suit No. 401/98 that the respondent No. 3 was appointed as the agent of the respondent No. 1. That the respondent No. 3 was appointed as agent on 2.4.1998 before even the filing of Suit No. 401/98 on 11.4.1998. The respondent No. 3 has acted upon such appointment by inter alia, entering into forward supply contracts with other parties, by opening a letter of credit, and by taking various steps for the import of the goods from the respondent No. 1 That respondent No. 3 has also incurred substantial expenditure as agent of the respondent No. 1 for the promotion of the goods, in fact the respondent No. 3 has entered into contracts for the supply of the goods to local silk manufacturers. That if the respondent No. 1 is prevented from supplying the goods to the respondent No. 3 there will be a serious shortage of the goods in the market within a matter of a few days and as a consequence, the entire silk industry will come under a severe crisis. The respondent No. 3 will also face multifarious legal claims from parties to whom commitments have been made for the supply of the goods. That the impugned order is interim in nature which is yet to be finalized by the learned Single Judge and does not call for any interference.
7. We have gone through the material placed with the case and have also considered the arguments advanced by the learned counsel for the parties, it is admitted fact that while hearing CMA No. 3879/98 the learned Single Judge passed the status quo order mentioned and referred to hereinabove. Subsequently CMA No. 5256/98 was filed on behalf of the respondents seeking vacation of the interim order. According to the order notice of the CMA was issued to the learned counsel for the appellant but the same was not accepted by the Clerk on the ground that appellant's counsel was out of station, it was brought to the notice of the learned Single Judge that agency contract is liable to be terminated in terms of Article 20 of the Agency Agreement between the parties, it was further pointed out before the learned Single Judge that the respondents are seriously prejudiced by the interim order whereby their entire business has come to stand still.
Through CMA 5426/98 filed under Section 151, CPC read with Section 94, CPC moved by the Intervenor, who was awarded the agency contract on 2.4.1998, for permission to import textile products for which letter of credit was opened on 6.4.1998 much before institution of the suit. CMA 5427/98 is an application by newly appointed agent under Order I, Rule 10, CPC for impleadment as defendants of which notice was ordered on 27.5.1998. Notice in respect of the above applications was offered at the office of Mr. Faruq H. Naek, learned counsel for the appellant on 29.5.1998 but was declined by his Clerk for the reason that the counsel was out of country. Learned Single Judge in view of urgency pointed out by the counsel for the Intervenor and the respondents passed the following order with observation as follows:- "In view of the urgency expressed by the counsel for defendants as well as intervenor subject to all just exceptions and in order to prevent the ends of justice from being defeated, intervenor is permitted to import the textile products, for which, letter of credit has already been opened. He is also permitted to continue further imports on the basis of his appointment as agent which would be prima facie governed by Article 13.2 of the Agency Agreement."
A careful perusal of the impugned order, which is reproduced hereinabove, prima facie, shows that the order is interim in nature, which is yet to be finally decided by the learned Single Judge.
Advisedly we refrain to dilate upon this aspect of the case which may prejudice either of parties.
8. Under the circumstances, the impugned order does not call for any interference at the moment.
The appeal is dismissed in limine along with the listed application Misc. 836/99. However, the appellants are at liberty to approach the learned Single Judge and contest the matter there for final decision as and when such occasion arises, if they are so advised.
HCA No. 5 of 1999.
During pendency of the Suit No. 401/98 the respondent submitted application under Section 3 of the Arbitration Act with the prayer to stay the proceedings of the suit so that the matter may be referred by the parties for arbitration in accordance with the Arbitration Agreement. Learned Single Judge after hearing the parties allowed the application on 12.4.1998 with the following observation:- "The proceedings of the suit are stayed. The parties are directed to refer their matter for arbitration in accordance with the Rule of Conciliation and Arbitration of International Chamber of Commerce, as agreed by them in terms of Article 23."
Hence the present appeal.
9. Mr. Muneer A. Malik, learned counsel for the appellant, contended that the learned Single Judge while allowing the application of the respondents did not consider the facts and circumstances of the case and failed to appreciate that the appellants have prima facie demonstrated that their agency was irrevocable and that they had incurred substantial expenditure relying upon the agency and with the knowledge and consent of the respondents Nos. 1 and 2 and that the agency was irrevocable despite the provision of Article 13.2 of the Agency Agreement. That the learned Single Judge failed to appreciate that irreparable loss would be caused to business and reputation of the appellants and that they would virtually be out of business as the proceedings of the Suit No. 401/98 have been stayed. That the learned Single Judge failed to consider the Articles 18.1 and 18.2 of the International Agency Agreement whereby in terms of Article 18.1 the contract entered into on 14.6.1996 would have remained in force until 14.6.1999 and in terms of Article 18.2 the contract should have been automatically renewed for successive period of one year. Learned counsel further submitted that the appellant will have to incur unforeseen expenditure if arbitration is to take place out of country, as the appellant will have to produce their witnesses in that country though they are available in Pakistan.
Mr. Muneer A. Malik, learned counsel for the appellants relied upon the following case-laws:-
(1) PLD 1992 Lahore 95.
(2) 1993 SCM R 866.
(3) PLD 1993 S.C. 42.
10. Mr. Agha Faqir Muhammad, learned counsel for the respondents Nos. 1 and 2, pointed out that the subject- agency was validly terminated on 1.4.1998 in accordance with the Article 20 of the Contract which was before filing of the suit. That the new agent was also appointed on 2.4.1998 i.e.. also before filing of the suit. That the appellants have not invested huge amount of money for promoting or selling of the products. That whatever time or money the appellants might have spent, it was part of their sales promotion activity and it was in their own interest to do so. That in pursuance to the impugned order the respondents 1 and 2 have already referred the matter for arbitration under the ICC Rules. That in view of the Arbitration Clause in the agreement the matter has been rightly referred to the arbitration.
Mr. Agha Faqir Muhammad, learned counsel for the respondent No. 3, referred the following case- laws:-
(1) 1996 CLC 801.
(2) 1998 SCM R 1618.
11. Mr. Zahid F. Ebrahim, learned counsel for the respondent No. 3, contended that in pursuance of the impugned order the respondents, as for back as on 9.12.1998 referred the matter to the ICC for arbitration to the International Court, who through their letter dated 6.1.1999 informed the appellants about referring the matter to the arbitration. That this Court has no jurisdiction to suspend the proceedings to the agreed forum under the ICC Rules and the impugned order passed by the learned Single Judge under Section 3 of the Arbitration Act is perfect, valid and maintainable. That respondent filed application under Section 3 of the Arbitration Act to which the appellants did not file any counter-affidavit. That since 12.11.1998 till March, 1999 the appellants did not bother to file stay application for restraining the respondents from proceedings for arbitration before the agreed forum under the ICC Rules as such the appellants cannot seek injunction at this belated stage. That neither the balance of convenience is in favour of the appellants nor they have prima facie case as such it will be the respondents who will suffer irreparable loss if the appeal is allowed.
12. In this background of the matter it will be relevant to mention that in the present case it is not denied by either of the parties that there exist agreement containing an arbitration clause particularly Article 23.1 which reads as under:- "23.1. Any dispute arising out of or in connection with the present contract shall be finally settled in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators designated in accordance to said Rules."
In the main suit the written-statement has not been filed so far. The respondents as required have already been served with the notice invoking the arbitration clause through letter dated 21.4.1998. in supporting affidavit it is asserted that the respondents are willing to do all things which are necessary for proper conduct of the arbitration and in fact the respondents after service of notice have despatched the letter dated 21.4.1998 to the appellants intimating them that they are ready and willing to refer the dispute to the arbitration i.e.. International Chamber of Commerce as provided under Article 23 of the agreement referred to hereinabove. The respondents also requested the appellants for communicating their concurrence so that matter be referred to the arbitration under the Rules. Section 3 of the Arbitration Act under which application CMA 4345/98 was filed before the learned Single Judge provides as under:- "34. Power to stay legal proceedings where there is an arbitration agreement:- Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of arbitration such authority may make an order staying the proceedings."
From the bare reading of the above section it can easily be gathered that condition for referring the matter to arbitration are fully fulfilled in the instant case, it is an admitted position that the agency agreement dated 4.6.1996 was terminated on 1.4.1998 and the respondent No. 3 was appointed as agent on 2.4.1998 whereas the appellants filed Suit No. 401/98 on 11.4.1998. Article 20.1 of the International Agency Contract which provides for "earlier termination" reads as under:- "Each party may terminate this contract with immediate effect by notice given in writing by means of communication ensuring evidence and date of receipt (e.g. registered mail with return receipt, special courier, telex), in case of a substantial breach by the other party of the obligations arising out of the contract, or in case of exceptional circumstances justifying the earlier termination."
In the above contract, Article 23 provides for arbitration and it reads as under:- "23.1. Any dispute arising out of or in connection with the present contract shall be finally settled in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators designated in accordance to said Rules."
In the light of what has been stated hereinabove we would like to discuss the case:law relied upon by the learned counsel for the parties:-
(1) PLD 1962 (W.P.) Lahore 95 - Messrs S.M. Qasim & Co. v. Messrs Sh. Azimuddin In this case Mr. Justice A.R. Changez (as he then was) considered the provisions of Contract Act and the Arbitration Act. Relevant observations of his Lordship in this case is as follows:- "Learned counsel for the respondents has further argued that the agreement of the counsel for the parties for reference to arbitration may be deemed to be an application under Section 21 of the Arbitration Act. Section 21 lays down that wherein any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment in pronounced apply in writing to the Court for an order of reference. Admittedly no application in writing was presented by the counsel for the parties for an order of reference, in such a case, an application in writing is absolutely essential, and in the absence of such an application the Court cannot proceed to refer the matter to an arbitrator."
With due respect this case is not helpful to the case of the appellants in any manner as it is quite distinguishable to the facts of the present case and rather it supports the case of the respondents.
Admittedly the agency agreement itself has specific article for referring the matter to ' arbitration if dispute arises between the parties. The respondents approached the learned Single Judge for stay of the suit with the prayer that keeping in view the arbitration agreement between the parties the matter may be referred to the arbitration.
(2) 1992 SCM R 866 - M/s. Uzin Export & Import Enterprises for Foreign Trade v. M/s. M. Iftikhar & Company Limited.
In this case also their Lordship of the Supreme Court after considering Section 3 of the Arbitration Act held as under:- "Perusal of Section 3 of the Arbitration Act as reproduced above clearly shows that if in a contract there is provision of resolution of dispute between the parties by way of arbitration and parties have agreed to such forum, then such forum is to be restored to and given preference over filing of suit. If one of the parties to the contract by-passing forum of arbitration files a suit, then the other party can file application for stay as contemplated under Section 3 of the Arbitration Act and if the Court is satisfied then order of stay of proceedings in the suit can be passed to enable resolution of dispute between the parties by way of arbitration. Conditions precedent for grant of stay are that the party applying for stay has not filed written statement or taken any other steps in the proceedings indicating that right to invoke arbitration clause is intentionally abandoned in favour of Court proceedings. Whether to grant stay or not is dependent upon satisfaction of the Court and such order is to be passed by the Court only when it is satisfied that all the requirements and preconditions enumerated have been fulfilled. The Court has to satisfy itself that the party applying for stay has not relinquished or abandoned his right of invoking arbitration clause after filing of suit, in coming to such conclusion the facts and circumstances of each particular case are to be examined in the light of pleas and other steps taken by the parties."
We are afraid that this authority is also not applicable and helpful to the case of the appellants inasmuch as the respondents before filing of the written statement submitted application before the learned Single Judge with the prayer that since there is arbitration clause in the agreement viz. Articles referred to hereinabove, and the respondents are willing and prepared to take proceeding before the ICC and that they did not relinquished or abandoned their right of invoking the arbitration clause.
(3) PLD 1993 S.C. 42 - Messrs Eckhardt & Co. Marine GMBH v. Muhammad Hanif:- In this case observation of Amal Mian, J. (as his Lordship then was) as is under:- "I may observe that while dealing with an application under Section 3 of the Arbitration Act in relation to a foreign arbitration clause like the one in issue, the Court's approach should be dynamic and it should bear in mind that unless there are some compelling reasons, such an arbitration clause should be honoured as generally the other party to such an arbitration clause is a foreign party. With the development and growth of International Trade and Commerce and due to modernization of Communication/Transport system in the world, the contracts containing such an arbitration clause are very common now-a-days. The rule that the Court should not lightly release the parties from their bargain, that follows from the sanctity which the Court attached to contracts, must be applied with more vigour to a contract containing a foreign arbitration clause.
We should not overlook the fact that any breach of a term of such a contract to which a foreign company or person is a party, will tarnish the image of Pakistan in the comity of nations. A ground which could be in contemplation of party at the time of entering into the contract as a prudent man of business, cannot furnish basis for refusal to stay the suit under Section 3 of the Act. So the ground like, that it would be difficult to carry the voluminous evidence or numerous witnesses to a foreign country for arbitration proceedings or that it would be too expensive or that the subject- matter of the contract is in Pakistan or that the breach of the contract has taken place in Pakistan, in my view, cannot be a sound ground for refusal to stay a suit filed in Pakistan in breach of. a foreign arbitration clause contained in contract of the nature referred to hereinabove, in order to deprive a foreign party to have arbitration in a foreign country in the matter provided for in the contract, the Court should come to the conclusion that the enforcement of such an arbitration clause would be unconscionable or would amount to forcing the plaintiff to honour a different contract, which was not in contemplation of the parties and which could not have been in their contemplation as a prudent man of business."
13. In this case also their Lordship of the Supreme Court observed that two Courts below having exercised discretion under S. 34, Arbitration Act, 1940, against the appellants by refusing to stay the suit and such exercise of discretion could not be said to be perverse, arbitrary or capricious, in such circumstances Supreme Court would not interfere with the same, even if it would have taken a different view in the matter.
(4) 1996 CLC 801 - Cotton Export Corporation of Pakistan (Private) Limited v. Messrs Modern Cotton Ginners, Bahawalpur and 6 others
14. In this case one of us observed that the matter was referred to the Arbitrators on the application of the defendants and the Arbitrators had not finalised the matter. The suit was filed on 15.2.1989 and on 20th May, 1990 the same was referred for arbitration. The opposition on behalf of the defendants, prima facie, shows that they want to linger on the matter unnecessarily. For expeditious disposal of the matter the CMA was allowed with no order as to costs.
(5) 1979 CLC 307 - Island Textile Mills Ltd., Karachi v. V/O Technoexpert and another In this case Amal Mian, J. (as his Lordship then was) observed as follows:- "it was known to the plaintiffs at the time of entering into the contract that in case they would file any claim against the defendant No. 1, the arbitration would be through the Foreign Trade Arbitration Commission for the Chamber of Commerce in Moscow, it was also known to the plaintiffs that the subject-matter of the dispute would be at Karachi and that their evidence would be in Pakistan, in my view, a party having entered into an agreement after having the knowledge of the above facts cannot defeat the arbitration clause on the above ground."
(6) 1984 CLC 1521 - Mian Khuda Bux and others v. Tahir Pervaiz, Civil Judge, 1st Class Vehari and others The dictum laid down in this case is that:- "The principle underlying under Section 3 of the Arbitration Act is to force by an indirect method, a contumacious party who had agreed to arbitration to go to arbitration, therefore, in my mind, by appointing the two arbitrators, and passing stay order, the Trial Court has just performed its legal duties in the circumstances of the case and has not exceeded its jurisdiction in any manner."
(7) 1998 SC (Pak) 1066 - Hitachi Limited and Anr. v. Rupali Polyster and others In this case their Lordship have held as under:- "Adverting to the main question in issue, it may be pointed out that in the above various treatises the authors have pointed out that there are three laws which may be relevant in an international arbitration that is, namely (i) proper law of the arbitration agreement; (ii) curial law, and (iii) proper law of reference. The above classification has also been approved in some of the above reports/cases of the British jurisdiction, it may also be observed that Sir Michael J. Mustill and Stewart C. Boyd in their well- known treaties titled "The Law and Practice of Commercial Arbitration in England" (Second Edition) have elaborately defined the scope of each of the above three laws involved in an international arbitration. According to the authors, the proper law of the arbitration agreement governs "the validity of the arbitration agreement; the question whether a dispute lies within the scope of the arbitration agreement; the validity of the notice of arbitration; the constitution of the Tribunal; the question whether an award lies within the jurisdiction of the arbitrator; the formal validity of the award; the question whether the parties have been discharged from any obligation to arbitrate future dispute". Whereas according to them the curial law governs "the manner in which the reference is to be conducted; the procedural powers and duties of the arbitrator; questions of evidence; the determination of the proper law of the contract". They have also opined that "the proper law of the reference" governs; "the question whether the parties have been discharged from their obligation to continue with the reference of the individual dispute". The other authors of the above other treatises have also referred to the above three sets of laws applicable to an international arbitration. The learned Judges in some of the above cases of British jurisdiction have also dilated upon the above classification. There seems to be no unanimity/consensus as to the scope of each of the above three laws. They are over lappings in some of the above treatises and the reports. We are inclined to subscribe to the view projected in the aforesaid treatise authored by Sir Michael, J. Mustill and Stewart C. Boyd as to the scope of the proper law of the arbitration agreement."
15. We have gone through the material placed with the case and we have minutely considered the arguments of the learned counsel for the parties and case-law cited by them. Admittedly even before filing of the suit the International Agency Contract was cancelled by the respondents and respondent No. 3 was appointed as their agent. The respondents have not abandoned or relinquished their rights to seek arbitration in the matter. The respondents before filing of the written statement submitted application as required under Section 3 of the Arbitration Act with the prayer that the appellant may be directed to take part in the Arbitration proceedings. The respondents in their affidavit filed before the learned Single Judge have shown their willingness and readiness to abide by the terms of the agreement. Articles 23.1 and 23.2 which were reduced into writing by the parties, reproduced hereinabove too, clearly show that in case of dispute arising out of or in connection with the present contract, same shall be finally settled in accordance with the rules of conciliation and arbitration of the International Chamber of Commerce and the Arbitrators shall apply the provisions contained in the contract and the principles of law generally recognised in international trade as applicable to international agency contracts with the exclusion of national laws.
16. In view of the above Articles the appellant cannot claim that the matter may not be referred to the arbitration. That the contention of the appellant that they will have to suffer financial loss if they are directed to participate in the arbitration proceedings before the International Chamber of Commerce because they will have to adduce evidence and take witnesses from Pakistan. So far as this aspect of the case is concerned, for this purpose the appellants can move a proper application before the arbitrator, which can be considered by him. The parties who have signed the agreement cannot be allowed to back out of the same. The case-law discussed and referred to hereinabove are also applicable to the case of the respondents which we respectfully follow.
17. For the foregoing reasons, the impugned order does not call for any interference which accordingly is maintained and the appeal is dismissed in limine with no order as to costs along with the listed applications.
18. On 18.8.1999 after hearing of the learned counsel for the parties both the appeals were dismissed by short order.