WAQQAS LIMITED Versus PROVINCE OF PUNJAB

This F.A.0. is directed against an order dated the 15th October, 1984, of the learned Civil Judge 1 st Class, Lahore, whereby the appellant's application under section 20 of the Arbitration Act for filing the agreement and referring the dispute to arbitration was dismissed.

2. An objection was taken to the application that before invoking jurisdiction of the Civil Court, the appellant was bound to have exhausted his remedy under 'clause 25 (a) of the agreement whereby he was obliged first to get the matter referred to the Superintending Engineer for his decision, and in case he failed then alone he could have resort to the Civil Court after giving some moratorium.

3. The lower Court heavily relied upon clause 25(a) which stipulated, inter alia, that the dispute shall have first to be referred to the Superintending Engineer for his decision initially within three months and, of course, subject to all exceptions even during an extended period. The case in hand shows that such a reference was, in fact, made to the Superintending Engineer but the appellant became impatient to run to the Court under section 20 ibid, without waiting for the decision by the S.E. The lower Court held that unless the stipulated remedy contemplated by clause 25 (a) was first exhausted, the application to the Civil Court under section 20 could not have been made.

4. Mr. Riaz Karim Qureshi for the appellant has tried to stress that clause 25 (a) will apply only where the dispute arises in the course of execution of the contracted works. He derives support for this view from the expression used in the clause, namely;

"The contractor shall forthwith give effect to the decision of the Superintending Engineer and shall proceed with the work with due diligence .

I am afraid the governing clause of this item is expressed in a liberal manner to the effect that in the event of any disagreement arising out of the contract the matter shall have first to be referred to the S.E. for decision. What seems to be essential is that the disagreement should arise from the contract. It may arise during the course of execution of the work and even post facto. There is no clear‑cut intent to limit the effect of this item to a point of time when the work is in progress. This view finds support from the last sentence of this item itself which lays down that such a reference may be made within three months even after the completion of the work. It further adds that if the same is not made, the contractor is supposed to have waived all claims in respect of the dispute. The interpretation adopted by the learned trial Court in regard to this provision seems to be. quite fair and sensible. It has been provided as a prerequisite for coming to Court and then asking to get an arbitrator appointed. Mr. Qureshi submitted that he had filed the application under section 20 because he wanted an interim injunction under the provisions of section 41 read with the second Schedule to the Arbitration Act. That may be correct but the appellant is first bound by his own overtures made in the main agreement. If he agreed to be bound to refer the matter first to the S . R: he had to observe that stipulation.‑ May be if he fails in that effort he could invoke section 20, etc.

5. There is no merit in the F.,A.O. and the same is dismissed.

H.B.T./W‑24/L Appeal dismissed.