1. ' This suit has been filed by plaintiff Cogetex S.A. a foreign company (incorporated under the Laws of Switzerland having its office in Geneva, Switzerland) for enforcement of a "Foreign Award" under the provisions of the Arbitration (Protocol and Convention) Act, 1937 announced by the Liverpool Cotton Association Limited (WA) on 7th day of April 1995, in the matter of Arbitration between the plaintiff and the defendant pursuant to an agreement dated 21-4-1994 which inter alia provided for settlement through arbitration by LCA in case of any dispute between the parties with relation to the subject-matter of contract. The Award has also been maintained in appeal by the Technical Appeal Committee of the WA.
2. ' According to the facts as stated in the plaint, the plaintiff had agreed to supply and the defendant had agreed to purchase 1150 metric tons of Central Asian Cotton as per terms of the written contract dated 21st April, 1994 made by the parties viz. The plaintiff and the defendant. The dispute arose between the parties due to failure on the part of the defendant to complete their performance obligation under the contract to the extent of 856.150/Lbs net of cotton, hence dispute was referred by the plaintiff, with due intimation to the defendant, for arbitration at Liverpool in accordance with the Rules and Bye-laws of the Liverpool Cotton Association (hereinafter referred as "the WA"), with the contention that the unfulfilled balance under the contract should be closed by being invoiced back in accordance with the contract and the Rules of the WA. Mr. Arthur Aldcroft was appointed to act as Arbitrator by and on behalf of the Sellers/plaintiff whereas Mr. R. John Anderson was appointed to act as Arbitrator by and on behalf of the Buyer/defendant by the President of the WA in accordance with rule 340(5) of the LCA Rules pursuant to a request from the defendant. Each of the Arbitrator happens to be a member of the WA. The parties are also members of the LCA and signatory to a standard form of contract.
3. According to Clause (7) of the contract referring to condition of the sale, the dispute is to be referred to arbitration. The said Clause (7) reads as follows:-- ' In the event of any dispute Rules and arbitration according to the Liverpool Cotton Association will be applicable."
4. ' Thus obtaining of an Arbitration Award was a condition precedent to the right of either party to start legal proceedings in respect of any arbitrate dispute.
5. ' The award dated 7-4-1995 in favour of the plaintiff against the defendant was called in question by the defendant through an appeal under the applicable rules before the Technical Appeal Committee of the LCA, but as a result of failure to pay the appropriate fees and deposit by 31st July, 1995 being the final date set by the Directors in accordance with the Liverpool Cotton Exchange Bye-law 304(4), the appeal was dismissed and as such award became final conclusive and binding upon the defendant under Rules 314 and 343 of the Bye-laws and Rules of the LCA. Plaintiff was intimated about the dismissal of the appeal on 1-8-1995. The plaint further shows that the defendant failed to perform its duties and despite directions at pages 12 and 13, of the Award failed to pay to the plaintiff the sum of US $ 109,103.62 with interest. The total interest calculated up to 31- 12-2000 has been mentioned in Annexure 'E' to the plaint being US $ 84,764.78.
6. ' The plaintiff has further stated that defendant has filed two suits being Nos.615 of 1994 and 570 of 1994 in this Court against the plaintiff emanating from the same transaction/ contract/agreement in which suits the present plaintiff filed applications under section 34 of the Arbitration Act, 1940 for stay of the proceedings which were decided in favour of the present plaintiff vide orders dated 18- 3-1999 and 13-9-1999, and the two suits have been accordingly stayed, whereafter the present defendant has filed HCAs Nos.375 of 1999 and 376 of 1999 which are still pending.
7. ' The plaintiff has prayed for the following reliefs:--
(a) For pronouncement of judgment in terms of the said Award,
(b) decree according to the Award and order for enforcement of the decree and Award,
(c) grant of interest,
(d) costs of the suit, and
(e) any other relief(s) deemed fit by this Court under the circumstances of the case.
8. ' Objections on behalf of the defendant have been filed, inter alia, contending therein that the proceedings are barred under the Law of Limitation and the award in question is not a foreign award within the meaning of section 2(1) of the Arbitration (Protocol and Convention) Act, 1937 as certain conditions have to be complied with before making the said applicable as set out in three clauses of subsection (1) of section 2. It has also been stated that Pakistan is not a signatory to such Protocol and there is no reciprocal arrangement between the Government of Pakistan (the power to which the defendant is subject) and the Government of Switzerland (the power to which the plaintiff is subject) and no such notification has been produced to show that there is a reciprocal arrangement between the two countries/ Governments, hence the award cannot be enforced in Pakistan, and the notification issued by the British India cannot be deemed to be binding and operative. It is further stated that the arbitration agreement on which the Award is based is governed by the laws of Pakistan, hence the Award cannot be filed/enforced under section 9(2) of the 1937 Act. Plea of res subjudice has also been raised in view of the pendency of Suits Nos.614 of 1994 and 570 of 1994. The factum of entering into contract has not been denied or disputed, however, it has been stated that defendant was, inter alia,. Liable to open a letter of credit viz. L/C for the payment of Central Asian Raw Cotton to be supplied by the plaintiff. Plaintiff was required to ship the goods from any European Baltic/Black Sea Port, from mid May to end of June, 1994. As per agreement the documents relating to the said goods had to comply with the conditions laid down in the L/C. However, when the plaintiff sent the documents to the defendant's bank, which had issued the L/C, there were material discrepancies and the documents did not comply with the conditions laid down in the L/C, hence the bank refused t9 accept the documents and returned the same. It is further stated that plaintiff thereupon unilaterally, wrongfully. And without prior notice to the defendant repudiated/breached the contract and claimed to have sold the goods to some un-named third party and, therefore, allegedly suffered huge loss which was claimed from the defendant though defendant was not responsible for the same. The Arbitrators were informed that they did not have any jurisdiction to proceed with the matter as contract in question was subject of proceedings before this Court, but the Arbitrators proceeded with the matter and passed the Award in favour of the plaintiff and did not deal with the issue of jurisdiction.
9. It also did not deal with the issue that default had admittedly been committed by the plaintiff by sending discrepant documents to the bank. Even assuming (without conceding) if the documents were not discrepant, then obviously the party in default was the bank and not the defendant.
10. Furthermore, the arbitrators failed to call such material before deciding the matter. The issue of the sums admittedly payable by the plaintiff to the defendant was not taken into consideration though it was incumbent upon the LCA to have dealt with this aspect of the matter. It is further stated that it was the plaintiff who failed to comply with its obligations under the contract and assuming even if the plaintiff is entitled for certain amount he is also liable to pay something to the defendant. Plea of set off has also been raised by claiming adjustment of a sum of US $ 46,181.00. An objection regarding territorial jurisdiction of this Court has also been raised on the ground that defendant does not carry on business at Karachi within the meaning of section 20, C.P.C. For the purpose of the present proceedings. Copies of Form "A" as required by Part VIII of the Companies Ordinance, 1984, to show the addresses of the registered office at Karachi, principal or Head office in Lahore and undertaking of company at Manga Road District Kasur and copy of the power of attorney in favour of Mr. Salman Qayoome have also been filed alongwith the objections.
11. ' I have heard Mr. Yousuf Ali Sayeed learned counsel for the plaintiff and Mr. Munib Akhtar learned counsel for the defendant at length, who have argued the matter strenuously and meticulously.
12. ' The first objection raised by Mr. Munib Akhtar is that copy of the award filed alongwith the plaint is not in accordance with the provision of section 8(1) of the Act and rule 297 of the SCCR (0.S.) as it has not been authenticated in the manner required by the law of the country in which the award was made and, therefore, the said award cannot be enforced by a decree of the Court and is liable to be returned under sub-rule (2) to rule 297.
13. ' Mr. Yousuf Ali Sayeed has argued in rebuttal that as per section 8(1) of the Act and rule 297 of the SCCR (O.S.), it is either original award that may be filed or a copy whereof authenticated in the manner required by the laws of the country in which it was made. He has urged that "it" means copy and not the award itself. He has further argued that the copy filed in the present proceedings was made in Switzerland and has been authenticated by the competent authority of the Canton of Geneva, certifying it to be true copy of the original document and has further been authenticated/attested by the Pakistan Embassy at Berne, hence it is in conformity with section 8(1) of the Act and rule 297 of the SCCR (O.S.). Learned counsel has further argued that even if it is assumed for the sake of arguments that the copy of the award offends the provision of section 8(1) of the Act and rule 297 of the SCCR (O.S.), the plaintiff should not be non-suited on the basis of such technicality, especially as the original award was available for presentation during the course of arguments and could be placed on record. In support of his contention that a party should not be non-suited on a technical ground such as failure to file the evidence required by section 8(1) of the Arbitration (Protocol and Convention) Act, 1937, when the same is made available, albeit at a belated stage, learned counsel has placed reliance on the cases of Imtiaz Ahmed v. Ghulam Ali and another PLD 1963 SC 382; Manager Jammu and Kashmir Property in Pakistan v. Khudayar and another PLD 1975 SC 678; Mst. Begum and others v. Mst. Begum Kaniz Fatima Hayat and others 1989 SCMR 883; Jamil Ahmed v. Late Saifuddin 1997 SCMR 260.
14. ' The second objection raised by Mr. Munib Akhtar is that Sindh High Court at Karachi does not have jurisdiction as principal office of the defendant is situated at Lahore. To substantiate his contention, learned counsel has referred section 20 of the Code of Civil Procedure, 1908. Learned counsel has also referred to the case of Nan Fung Textiles Ltd. PLD 1982 Karachi 619 at page 626 to show the nature of the foreign award made under Liverpool Cotton Association Rules and scope of interference by the Courts in Pakistan.
15. ' This objection has been met by the learned counsel for the plaintiff by arguing that admittedly the registered office of the defendant is at Karachi, agreement between plaintiff and defendant was executed at Karachi and L/C at the behest of the defendant was issued at Karachi, which all goes to show that business is in fact carried on by the defendant at and/or through its office at Karachi, or at least cause of action, wholly or in part has arisen at Karachi. In support of his contention, learned counsel has further referred to the correspondence between the parties in which the address of the defendant is shown of that of Karachi. Learned counsel has further argued that two suits being Nos.570 of 1994 and 615 of 1994 have also been field by the present defendant against the plaintiff at Karachi ostensibly for the purpose of effecting the recovery of amounts purported to be due to the defendant as a consequence of the alleged short shipment of cotton under the same contract to which the award relates. Learned counsel has further pointed out that proceedings in both the suits have been stayed against which High Court Appeals are also pending before this Court at Karachi. In support of his contention that in order to decide whether the Court has jurisdiction over the subject-matter of the award, it is necessary to consider the reliefs granted by the award and determine whether the Court would have jurisdiction to try a regular suit between the parties in which reliefs were granted by the award. Learned counsel has referred to B. Upendra Nath Basu v. B. Het Lal and others AIR 1933 Allahabad 380.
16. ' The third objection raised by the learned counsel for the defendant is that the proceedings are barred by limitation as the case stands governed under Article 181 of the First Schedule to the Limitation Act, according to which the time limit is only three (3) years from date of Award or at the most from the date of dismissal of appeal. In view of the law laid down in the case of M. Imamuddin Janjua v. The Thal Development Authority PLD 1972 SC 123 an application filed under section 20 of the Arbitration Act, 1940 beyond a period of three (3) years was held to be time-barred.
17. ' Learned counsel for the plaintiff has argued that the said Article does not relate to the proceedings under the Arbitration (Protocol and Convention) Act, 1937 and the proceedings in question shall stand governed under Article 120 of the Limitation Act which is a residuary Article and has provided a period of six (6) years for filing a suit for which no time has been fixed under the law of limitation. Reliance has been placed on Frederick E. Rose (Commodities) Limited v. Munsoor Ali Tanning Co. NLR 1981 UC 175 Karachi, where Nasir Aslam Zahid, J. (as his Lordship then was) has held that applications under section 5 of 1937 Act for enforcement of a foreign award would, in view of the fact that the same are required as per the said Act to be registered as suits, shall not fall under Article 181 of the First Schedule to the Limitation Act, which is a residuary Article in respect of application for which no other period of limitation is provided under any other Article. It has been pointed out that case of M. Imam-ud-Din Janjua v. The Thal Development Authority PLD 1972 SC 123 was duly considered and distinguished in the said judgment.
18. ' The fourth objection raised by the learned counsel for the defendant is that the Award on the face of it is contrary to section 7(2) of the 1937 Act, and must be refused to be enforced under section 7(3) of the Act, as the Arbitrators are guilty of misconduct as they have failed to appreciate that documents required under the L/C opened by the defendant were discrepant and, even assuming the same were not discrepant, the party in default was the bank and not the defendant. For ready reference section 7(2)(c) is reproduce hereinafter:-- "S.7(2)(c). The award does not deal with all the questions referred or contains decisions on matter beyond the scope of the agreement for arbitration: ' Provided that if the award does not deal with all questions referred the Court may, if it thinks fit, either postpone the enforcement of the award or order its enforcement subject to the giving of such security by the person seeking to enforce it as the Court my think fit."
19. ' Reply of Mr. Yousuf Ali Sayeed learned counsel for the plaintiff to this objection is that there was no misconduct on the part of the Arbitrators who faithfully applied the Rules of LCA by closing the contract by invoicing the unperformed part thereof back to the seller as per Rules 140 and 141 of the LCA, which is a procedure that was approved in principle in the case of Conticotton S.A. v. Farooq Corporation 1999 CLC 1018 Karachi and reads as under:-- "In order to curb such tendency Courts ought not to entertain objections to a foreign Award i.e. Executable in Pakistan unless these strictly lie within the four corners of section 7 of Arbitration (Protocol and Convention) Act, 1937 and such assessment should be made from the Award itself.
20. The Award should thus, be interfered with only if the error in it is apparent on the face of the award.
21. Court ought not to set themselves up as an Appellate Court or to go behind the award to reappraise the evidence. Additionally the Court should decline to entertain the objections to Foreign Awards unless all remedies available under the Arbitration Agreement or Rules, by which the parties are bound, are exhausted."
22. (Underlining is by me)
23. ' It has been further argued that the said objection, in any event, is untenable in the present proceeding and should have been raised in appeal before the LCA or in proceeding for annulment of the award under the English Arbitration Act before the appropriate Court in England which is the only Court that would have supervisory jurisdiction over the arbitration proceedings. It has been further argued that the defendant despite having filed appeal failed to pursue the same, which resulted in its dismissal and now this objection in view of the principles laid down in Conticotton S.A.
24. (supra) that the Courts ought not to entertain objections to a foreign award unless the same lie strictly within the four corners of section 7 of the 1937 Act. It was further held that Court ought not to set themselves up as an Appellate Court or to go behind the award to reappraise the evidence and that additionally the Court should decline to entertain the objections to Foreign Awards unless all remedies available under the Arbitration Agreement or Rules by which the parties are bound are exhausted. It has also been held in the above cited report that where the defendant had purposely and deliberately refrained from pursuing the remedy of the appeal before the Technical Committee of the LCA thereby allowing the award to become final, they could not then urge a ground before the Court which they could have easily taken in appeal and may perhaps have succeeded. Reliance has also been placed on Messrs European Grain and Shipping Ltd. v. Messrs Polychem Company Ltd. PLD 1990 Karachi 254, wherein it has been held that grounds upon which a Pakistani award could be set aside are different from the grounds to attack a foreign award inasmuch as under section 30 of the Arbitration Act, 1940 a Pakistani award could be set aside on the ground that an Arbitrator or Umpire had misconducted himself or that the award had been improperly procured or is otherwise invalid whereas such grounds do not find place in section 7 of the 1937 Act. Reliance has also been placed upon the view expressed by Saleem Akhtar, J. (as his Lordship then was) in the case of Nan Fung Textiles Limited v. Sadiq Traders Limited PLD 182 Karachi 619, that a foreign award which does not state reasons cannot be termed to violate the provision of law governing its enforcement. Reference has also been made to the view expressed by Amir Hani Muslim, J. In Alfred C. Toepfer International v. Pakistan Molasses Company 2003 CLD (Karachi) 1666, that a Court does not sit over a foreign award as a Court of appeal, but, instead, acts as an executing Court and cannot go beyond the award except on the grounds as mentioned under section 7(2) of the Act of 1937. It is well settled that once a foreign Award is made it in fact amounts to a foreign judgment and the proceeding before the Court are merely for an affirmation of the award, and only limited objections as to the validity and enforceability thereof are permitted under section 7(2) of the 1937 Act and it is only when A any of the aforesaid objections are sustained which is not the case here as already observed above, by me. Rule laid down by Mushir Alam, J. In the case of A. Meredith Jones & Co. v. Usman Textile Mills Limited 2002 CLD (Karachi) 1121, has also been cited in support of his contention by the learned counsel for the plaintiff, which is reproduced hereinafter:-- "This Court does not sit over the Foreign Award as a Court of appeal nor will scrutinize or examine the quality of evidence before the Foreign Arbitrator, therefore, entire matter cannot be allowed to be reopened by calling for any additional evidence or documents not required under the law, this Court in fact acts like an executing Court and cannot go beyond the award, save as expressly provided for' under section 7(2) of the Act of 1937, that too, for a limited, purpose to enable the defendant to question the award on merits before the competent forum in the country of origin."
25. ' Lastly, it has been vehemently urged by the learned counsel for the defendant that the Arbitration (Protocol and Convention) Act, 1937 is not applicable as the requirement of section 2 thereof have not been met, since Pakistan is not a party to the Convention and no notification required thereunder has been issued, nor has it been shown that reciprocal arrangements under the Protocol have been made by the Government of Switzerland and in any case that section 2(2) does not serve to remedy this defect. Learned counsel has referred to the view taken in Messrs Barlas Brothers Karachi & Co. v. Messrs Yangtze (London) Limited PLD 1959 Karachi 423, which was maintained by Supreme Court in appeal as reported in PLD 1961 SC 573. In rebuttal learned counsel for the plaintiff has argued that after the pronouncement made in the above referred decision, remedial action was taken by the Legislature in terms of the amendment made in 1937 Act by the insertion therein of the now existing section 2(2) through Ordinance LIII of 1962, which reads as follows:-- "Section 2(2) for the removal of doubt it is hereby declared that any notification issued under this section by the late Government of India before fifteenth day of August, 1947, and in force on that day for the purpose of enforcement of foreign award in British India, declaring any power to be a party to the said Convention or any territory to be the territory to which the Convention applies, shall be deemed to be notification issued by the Central Government for the purpose of enforcement of foreign awards in Pakistan."
26. ' I have given due consideration to the arguments advanced by the learned counsel for the parties and examined the material placed on the record so also the case law cited at the bar. Various objections raised by the learned counsel for the defendant and replied by the learned counsel for the plaintiff with the help of case-law lead to a conclusion that there is no weight in the objections raised on behalf of the defendant. With reference to first objection regarding the copy of the Award, I find that it does not suffer from any illegality or infirmity as it appears to have been authenticated by the competent authority of the Canton of Geneva and has been further authenticated to be a genuine document by the Embassy of Pakistan at Berne. It is neither in violation of section 8(1) of the 1937 Act nor Rule 297 of the SCCR (O.S.). The original copy is available with the learned counsel for the plaintiff, which he desired to place on record during the arguments and is being directed to file the same today. Even otherwise, it is well-settled that rights of parties could not be allowed to be defeated on technicalities as held in the cases of Imtiaz Ahmed, (2) Manager Jammu and Kashmir Property in Pakistan, (3) Mst. Begum and other and (4) Jamil Ahmed (supra). Precedent laws are meant to foster justice and not to thwart the rights of the parties.
27. ' The second objection regarding lack of territorial jurisdiction at Karachi has also no force. The registered office of the defendant is in Karachi, L/C was opened with Muslim C Commercial Bank at Karachi and the defendant have themselves filed two Suits being Nos.570 of 1994 and 615 of 1994 against the present plaintiff at Karachi for certain claims in respect of the same dispute, which was subject-matter of Arbitration, hence it cannot be argued that this Court has no territorial jurisdiction. There is also no force in the third contention of the learned counsel for the defendant that the suit is barred by limitation in view of time limit provided by Article 181 of the Limitation Act, as it should have been filed at most within a period of three (3) years from the date of Award or decision in appeal viz. 1-8-1995 whereas this suit was filed on 27-3-2001 i.e. Much beyond the prescribed time limit of (3) yeaRs, I do not agree with such contention and feel inclined to follow the view taken by Nasir Aslam Zahid, J. (as his Lordship then was) in the case of Frederick E. Rose (Commodities) Limited (supra) that an application under section 5 of 1937 Act for enforcement of a foreign award is to be registered as a suit and since no period has been fixed for filing such suits under the First Schedule to the Limitation Act, hence the suit shall be governed under Article 120 of the Limitation Act which provides a period of six (6) years for filing such suits. The fourth objection regarding the Arbitrators being guilty of misconduct has also no legs to stand. The award is well- reasoned dealing with the matter in controversy and the defendant has failed to assert and agitate all such points in appeal, which though filed but was not pursued. I also fully endorse the view taken in Nan Fung Textiles Limited (supra); Alfred C. Toepfer International (Supra) and rule laid down in A. Meredith Jones & Co. As referred to above that this Court in a foreign award is to act as an executing Court and cannot go beyond the award except as provided under section 7(2) of the 1937 Act, which provision of law does not stand attracted to the facts of this case. Even otherwise, this Court cannot assume the role of an Appellate Court. Contention that Courts in Pakistan have no jurisdiction to enforce a foreign award as Pakistan is not a signatory to convention and there is no reciprocal arrangement between the Government of Pakistan and Government of Switzerland is also without any substance. After the decision in the case of Messrs Yangtze (London) Limited (supra), law was amended in Pakistan by Ordinance LIII of 1962 and this fact has been taken note of in a number of cases decided from time to time. Reference can again be made to Nan Fung Textiles Ltd. v. H. Pir Muhammad Shamasuddin PLD 1979 Karachi 762, where Ajmal Mia, J. (as his Lordship then was) while repelling such contention has held as follows:-- "(e) In my view no exception to Ordinance LIII of 1962 referred to hereinabove, can be taken as Mr. A.
28. Rauf was unable to point out that the above Ordinance has violated any Constitutional Provision or was enacted by the authority not competent to enact. It is the privilege or prerogative of the Government of Pakistan to decide as to whether the award given in a particular foreign country should be enforceable in Pakistan or not notwithstanding that the country in which the award has been given as not made any reciprocal arrangement for the enforcement of Pakistan awards as contemplated in section 2 of the Act. The Government of Pakistan has expressed its intention not through a notification but it has been manifested through an enactment and, therefore, I cannot decline to enforce the instant award on the ground that in England no reciprocal provision have been provided for the enforcement of Pakistan awards."
29. ' While referring to the judgment in the case of Messrs Yangtze (London) Limited v. Messrs Barlas Brothers Karachi PLD 1961 SC 573, his Lordship has further held:-- If) It is clear from the above-quoted para of the above judgment that I cannot enter upon any investigation on the question as to whether reciprocal provisions for the enforcement of the Pakistan awards have in fact been made in the country of which the award is sought to be filed in Pakistan for enforcing it. It was also observed that it is a matter pertaining to international arrangements and the Courts should act in aid of the executive authority and should neither say nor do anything which might cause embarrassment to the authority in the conduct of its international relations. I cannot question the wisdom, which prompted the Government of Pakistan to cause the enactment of the aforesaid Ordinance LIII of 1962."
30. ' The upshot of the discussion made above is that there is no substance in the objections raised on behalf of the defendant, hence the same are overruled and the award sought to be enforced is made rule of the Court.
31. ' This suit is, therefore, decreed as prayed with costs.