MARINES LIMITED vs AEGUS SHIPPING CO. LTD and 4 others

1. ' The petitioner has filed this petition under sections 30 and 33 of the Arbitration Act, 1940 read with sections 2 and 7 of the Arbitration (Protocol and Convention) Act, 1937 with the following prayers:

(i) to grant a declaration, under section 30/33 of the Arbitration Act, 1940, that no Arbitration Agreement was/is in existence between the parties in regard to the alleged dispute but which was illegally/wrongfully made subject-matter of arbitration in London and in regard to which the said arbitrators gave award, dated 10-4-1984.

(ii) In the alternative such arbitration should have been convened at Karachi by the Arbitrators, namely, the respondents No.2 and 3 was illegal and of no legal effect;

(iii) to grant consequential relief to the aforesaid by further declaration and relief;

(a) that the London High Court's order in substituting the respondent No.3 with the respondent No.4 is of no force or effect;

(b) that the Award, date 10-4-1984 (Annexure 'G') is unenforcible against the petitioners;

(iv) to grant cost of these proceedings to the petitioners; and

(v) to grant such other/further/additional relief or reliefs as may appear just or proper in or about the circumstances mentioned hereinabove.

2. ' The present petition has been filed in respect of an award made on 10-4-1984. It is admitted by the petitioners that the award was made in London and it falls within the definition of 'foreign award' as defined by section 2(1) of the Arbitration (Protocol and Convention) Act, 1937. Mr. Zaidi, the learned counsel has, therefore, frankly conceded that sections 30 and 33 of the Arbitration Act, 1940 will not apply. The only question is whether a petition for declaration that an award is not enforceable can be filed by a party where party in whose favour award has been made has not instituted a proceeding for enforcement of a foreign award. So far the respondent has not filed any proceeding for enforcement of the award under the Arbitration (Protocol and Convention) Act, 1937. Mr. Zaidi has referred to section 7(1) of the said Act which provides conditions for enforcement of a foreign award and section 7(2) provides condition in which a foreign award shall not be enforceable. The Arbitration (Protcol and Convention) Act provides remedy for enforcement of a foreign award in Pakistan. Section 4 provides that a foreign award is enforceable in Pakistan as if it were an award made on a matter referred in Pakistan subject to the provisions of the Act. The enforceability of a foreign award is to be regulated by the provisions of the Act. The applicability of the Arbitration Act, 1940 is, therefore, excluded. Section 5 provides that any person interested in a foreign award may apply to the Court having jurisdiction that the award may be filed in Court. On such petition being filed, which shall be treated as a suit, the Court shall direct the parties to the arbitration to show cause why the award should not be filed. At this stage the other party will be entitled to appear and file his objection to the award. The grounds for challenging the award and its enforceability are specifically mentioned in section 7 of the Act. Section 7 only enumerates the grounds on which the validity and enforcement can be challenged. It does not provide for granting declaration that the award is not enforceable. A perusal of the provisions of the Arbitration Act, 1940 lends support to this observation. Section 30 of the Arbitration Act enumerates the grounds for challenging the award while section 33 of the Arbitration provides that any party to an arbitration agreement challenging the existence or validity of an arbitration agreement or any award or to have the effect or either determined shall apply to the Court and the Court shall decide the question on affidavits. No such provision has been made in the Arbitration (Protocol & Convention)

3. Act, 1937. Therefore, unless proceeding has been taken by any party for filing a foreign award in Court seeking its enforcement the objection as provided by section 7 cannot be pressed in service by an independent proceeding under this section seeking declaration that the award is not enforceable. The petitioner will have its remedy if the respondent applies to the Court for filing the foreign award seeking its enforcement. The petition is, therefore, dismissed.