AMANULLAH PIRACHA Versus Mrs. TASNEEM BAIG

AJMAL MIAN, J.‑‑ This High Court Appeal is directed against an order dated 15‑10‑1987 passed by a learned Single Judge of this Court in Suit No. 94 of 1987 declining the appellants' application under Section 34 of the Arbitration Act.

2. The brief facts leading to the filing of the above appeal are that the two appellants entered into a partnership with the respondent No. 1 on 23rd May, 1981. One of the clauses of the partnership deed reads as follows:‑‑ .

'Arbitration: That if any dispute arises between the partners in respect of the conduct of the business of partnership or in respect of interpretation, operation or enforcement of any of the terms and conditions of this deed or in respect of any other matter, cause or thing whatsoever not herein otherwise provided for, the same shall be referred for adjudication to the arbitration of persons appointed by each partner. The decision of the arbitration shall be final and binding on the parties:'

3. It seems that the respondent No. 1 filed the aforesaid suit for dissolution, partition and possession of plot bearing No. F 293 S.I.T.E. After the service of the summons of the suit, the present appellants filed the aforesaid Civil Miscellaneous Application No. 1595/87, which was declared by the learned Single Judge by order under appeal. The appellants being aggrieved by the above order have filed the present appeal.

4. In support of the above appeal Mr. A.W. Aseem, learned counsel for the appellants, has urged that the learned Single Judge was not justified in declining the appellants' aforesaid application on the ground that the S.I.T.E. was not a party to the partnership deed and, therefore. was not a party to an arbitration agreement.

On the other hand Mr. Rasheed A. Rizvi, learned counsel for the respondent No. 1 has submitted that the relief for partition of the plot could net have beer. granted in the absence of the S.I.T.E. therefore, the learned Single Judge was justified in declining the above application. He has further submitted that a simpliciter application under Section 34 of the Arbitration Act is not sufficient but the appellants/defendant should have indicated the dispute which was to be referred.

5. Mr. A.W. Aseem, learned counsel for the appellants, has referred to the case M/s. Haji Muhammad Ibrahim and Sons and others v. K.M.C. and others, reported in PLD 1960 (W.P.) Kar. 961, decided by a learned Single Judge of the erstwhile High Court of West Pakistan at Karachi Bench, in which the facts were that there was a contract between the K.M.C., and a contractor, who filed the suit in the High Court whereupon K.M.C. riled an application under S. 34 of the Arbitration Act. The above application was opposed by the plaintiff inter alia on the grounds that in the suit m addition to the K.M.C., certain officers of the K.M.C. and the new contractor were impleaded as defendants who were not parties to the above arbitration agreement. The above contention was rejected though the stay application was dismissed on other grounds.

On the other hand Mr. Rasheed A. Riivi, learned counsel for the respondent No. 1, has referred to the case of Uzin Export Import Enterprises v. M. Iftikhar and Company Ltd. reported in PLD 1986 Kar.

1. In the above case a Division Bench of this Court has analysed the requirements of Section 34 of the Arbitration Act and has held that in order to invoke the above section, the following conditions should be fulfilled:--

"(1) ????? the proceeding must have been commenced by a party to an arbitration agreement against any other party to the agreement;

(2) ??????? the legal proceeding which is sought to be stayed must be in respect of a matter agreed to be referred;

(3) ??????? the applicant for stay must be a party to the legal proceedings and he must have taken no step in the proceedings after appearance. It is also necessary that he should satisfy the Court not only that he is but also was at the commencement of the proceedings ready anal willing to do everything necessary for the proper conduct of the Arbitration; anal

(4) ??????? the Court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitrator in accordance with the arbitration agreement:"

6. We are inclined to hold that the S.I.T.E. was not a necessary party to the suit as there was no cause of action shown against the S.I.T.E. in the body of the plaint and, therefore, impleading of the S.I.T.E. as defendant No. 3 would not defeat arbitration clause contained in the partnership deed reproduced hereinabove. The appellants upon the service of the summon had filed the aforesaid application under Section 34 of the, Arbitration Act. In para 6 of the plaint, the respondent No. 1 himself has spelt out the dispute for which the suit was filed. In our view, the requirements laid down in the above Division Bench judgment of this Court are present in the instant case. We are inclined to hold B that the learned Single Judge was not justified in declining the above application under Section 34 of Arbitration Act on the ground found favour with him.

We, therefore, allow the above appeal and stay the suit. There will be no order as to costs.

M.Y.H./A-403/K ???????????????????????????????????????????????????????????????????????????????? Appeal allowed.