HAMAD RAZA vs SAJID HUSSAIN

ORDER

1. ABDUS SATTAR ASGHAR, J.--- This first appeal under section 39(i)(v) of the Arbitration Act, 1940 is directed against the order dated 25-10-2013 passed by the learned Civil Judge, Lahore whereby respondent's application under section 34 of the Arbitration Act, 1940 has been allowed.

2. 2.Learned counsel for the appellant has argued that the application under section 34 of the Act ibid lodged by the respondent was not proceedable as the same was not filed on first opportunity therefore the learned trial Court has erred in law while granting the petition through the impugned order which is untenable and liable to set aside.

3. 4.Arguments heard. Record perused.

4. 5.Perusal of the record transpires that the appellant lodged the suit for specific performance of the contract and recovery of possession on1-3-2012 before the learned Civil Judge 1st Class, Lahore and summonses were issued to the respondent for 8-3-2012. On the said date respondent appeared before the learned trial Court through counsel by furnishing power of attorney.

5. Consequently case was adjourned to 5-4-2012 for filing of the written statement with a direction to the appellant to disburse a copy of the plaint to the counsel for the respondent. On the fixed date i.e. 5-4-2012 the respondent lodged the application under section 34 of the Arbitration Act, 1940 to invoke the arbitration clause No.10 of the agreement to sell. It may be expedient for ready reference to reproduce the provision of section 34 of the Arbitration Act, 1940 which reads below:--- "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 the arbitration, such authority may make an order staying the proceedings."

6. 5.The expression 'at any time before filing a written statement or taking any other steps in the proceedings' used in the above provision is of significant importance. It is crystal clear that if a party intends to enforce an arbitration clause it must do so at the earliest possible moment prior to filing written statement or taking further steps in the proceedings. In this case it is evident on the record that the respondent lodged the application under section 34 of the Act ibid on the very first date of hearing fixed by the learned trial Court for filing of the written statement i.e. 5-4-2012. The respondent instead of filing written statement lodged the application under section 34 of the Arbitration Act, 1940, therefore conduct of the respondent clearly manifests that he invoked the arbitration clause at the earliest possible moment without acquiescing the proceedings of the suit.

7. In the attending circumstances, argument of the learned counsel for the appellant that respondent's application under section 34 of the Arbitration Act, 1940 was lodged with delay or was not maintainable is devoid of any force and thus repelled. The impugned order dated 25-10-2013 passed by the learned trial Court therefore does not suffer from any factual or legal infirmity, material irregularity or jurisdictional error.

8. 6.For the above reasons, this appeal having no merit is dismissed in limine.