1988 CLC 1652 Karachi
Section 3 Arbitration (Protocol and Convention) Act 1937 | Before Ajmal Mian and Ahmad Ali U. Qureshi, JJ
Messrs TRANSCOMERZ AG v. Messrs KOHINOOR TRADING (Pvt.) Ltd. and 2 others
السلام علیکم! یہ فیصلہ جسٹس اجممل میاں (جو بعد میں سپریم کورٹ کے چیف جسٹس بھی رہے) اور جسٹس احمد علی یو قریشی نے دیا تھا۔ تاریخ ہے 5 مئی 1988۔
This landmark judgment by Ajmal Mian, J. (later Chief Justice of Pakistan) and Ahmad Ali U. Qureshi, J. remains highly relevant for understanding Section 3 of the Arbitration (Protocol and Convention) Act 1937.
📋 Case Background
This case arose from an international commercial dispute involving a Swiss exporter (Appellant) and a Pakistani importer (Respondent No.1). Respondent No.2 (an indenting agent) booked 85,000 Kg of Viscose Staple Fibre for Respondent No.1. The Appellant issued a confirmation letter dated 20-5-1986 containing an ICC Arbitration clause (Clause 16), while the indenting order contained a Karachi Court exclusive jurisdiction clause (Clause 12).
⚠️ Conflicting Clauses – The Core Problem
Clause 12 (Indenting Order): "In relation to any dispute... the Court of Karachi shall only have jurisdiction to entertain proceedings."
Clause 16 (Confirmation Letter): "Any controversy... has to be settled... according to the Rules of Conciliation and Arbitration of the International Chamber of Commerce (ICC)."
Ek taraf Karachi Courts exclusive jurisdiction, doosri taraf ICC Arbitration (Switzerland). Yeh conflict tha.
📌 First Legal Point: "Submission Made in Pursuance of an Agreement"
The Court, following the majority view of the Indian Supreme Court in V/O Tractorexport, Moscow v. Tarapore and Co., Madras (AIR 1971 SC 1) and the Karachi High Court decision in Akbar Cotton Mills Ltd. v. V/O Techmash Export (1984 CLC 1005), held that:
"The use of the words 'a submission made in pursuance of an agreement' signifies not merely an Agreement to Arbitration but a submission made in pursuance of an agreement to arbitration, to which the protocol set forth in the first schedule applies."
Practical meaning: To invoke Section 3, mere existence of an arbitration agreement is not sufficient. There must be an actual submission – meaning arbitrators must have been appointed or the dispute must have been actually referred to arbitration.
📌 Second Legal Point: "Shall" vs "May" – Kya Court Ko Discretion Hai?
The Court followed Pakistan Insurance Corporation, Karachi v. P.T. Indones Oriental Lines (PLD 1977 Karachi 562) and held that:
"The word 'shall' in context of Section 3 of the Act conveys the meaning of the word 'may' and, therefore, the Court has discretion."
Reason: Courts always lean towards interpretations that preserve their jurisdiction rather than oust it. If "shall" were read as mandatory, it would eliminate the court's power to examine the case.
⚖️ Final Decision
The Single Judge had properly exercised discretion in refusing the stay because:
- Clause 12 and Clause 16 were inconsistent
- Whether Respondent No.1 had agreed to Clause 16 was in doubt at this stage
- Whether Respondent No.2 was acting as agent for Appellant or Respondent No.1 could not be resolved without evidence
Result: Appeal dismissed with no order as to costs.
📚 Key Cases Cited
| Case Name | Citation | Point |
|---|---|---|
| Haji Suleman v. C. Itoh & Co. Ltd. | PLD 1962 (W.P.) Kar. 447 | Indenting agent legal status |
| Owners of Cargo on Board the Merak v. The Merak (Owners) | (1965) 2 WLR 250 | Submission meaning – wider view |
| V/O Tractorexport, Moscow v. Tarapore and Co., Madras | AIR 1971 SC 1 | Majority: factual submission required |
| Akbar Cotton Mills Ltd. v. V/O Techmash Export | 1984 CLC 1005 | Followed Indian majority view |
| Pakistan Insurance Corporation v. P.T. Indones Oriental Lines | PLD 1977 Karachi 562 | "Shall" means "may" – discretion exists |
Mr. Atta Ullah Baloch
Advocate High Court | 25+ Years Experience | Criminal & Civil Law Specialist
ماہرانہ رائے:
"میرے 25 سال کے قانونی کیریئر میں کئی بین الاقوامی تجارتی تنازعات دیکھے ہیں۔ 1988 CLC 1652 کا یہ فیصلہ آج بھی اہم ہے کیونکہ یہ دو بنیادی سوالات کا جواب دیتا ہے جو آربٹریشن کلازز والے معاہدوں میں اکثر اٹھتے ہیں۔
پہلا، 'submission made in pursuance of an agreement' – بہت سے وکلاء یہ سمجھتے ہیں کہ صرف آربٹریشن شق کا ہونا کافی ہے۔ لیکن یہ فیصلہ واضح کرتا ہے کہ اصل submission ضروری ہے۔ اگر آپ کے پاس صرف arbitration clause ہے اور آپ نے ابھی arbitrators مقرر نہیں کیے، تو دفعہ 3 کے تحت stay حاصل کرنا مشکل ہے۔
دوسرا، 'shall' کا مطلب 'may' – عدالتوں کے پاس discretion ہے۔ یہ ایک اہم تحفظ ہے کیونکہ اگر شقیں متضاد ہوں یا ثبوت کی ضرورت ہو تو عدالت stay کرنے سے انکار کر سکتی ہے۔
عملی مشورہ: اگر آپ کے معاہدے میں arbitration clause اور jurisdiction clause دونوں ہیں تو پہلے یہ دیکھیں کہ کیا وہ consistent ہیں۔ اگر نہیں، تو عدالت stay دینے سے انکار کر سکتی ہے۔ اور یاد رکھیں، written statement file کرنے سے پہلے stay application ضرور دائر کریں، ورنہ آپ کا یہ حق ختم ہو جاتا ہے۔"
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❓ Frequently Asked Questions (FAQs)
Q1: Kya Section 3 invoke karne ke liye actual arbitration submission hona zaroori hai?
Answer: Haan. 1988 CLC 1652 (Karachi) ke mutabiq, "a submission made in pursuance of an agreement" ka matlab hai actual submission – sirf arbitration agreement kafi nahi hai.
Q2: Kya court ke paas Section 3 mein stay karne ka discretion hai?
Answer: Haan. Court ne ye kaha ke "shall" ko context mein "may" parha jayega, isliye court ko discretion hai.
Q3: Agar arbitration clause aur jurisdiction clause dono hon to kya hoga?
Answer: Yeh dispute ke facts par depend karta hai. Agar clauses inconsistent hain aur evidence required hai, to court stay karne se inkar kar sakta hai.
Q4: Stay application kab file karni chahiye?
Answer: Written statement file karne se pehle. Agar aap written statement file kar dete hain, to Section 3 ka right khatam ho jata hai.
Q5: Kya foreign arbitration award Pakistan mein enforceable hai?
Answer: Haan. Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act 2011 ke under enforcement ho sakta hai.
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