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Suit No.562 of 1984, decided on 28th November 1985.

‑‑‑5. 8‑‑Contract Act (IX of 1872), S.2 (h)‑‑Appointment of arbitrator‑ Agreements between parties providing for appointment of arbitrator if mutual negotiation failed‑‑Mutual negotiations having failed; Court directed reference of dispute to arbitrator to be appointed by: parties within specified time.

Khalid Latif for Plaintiff.

Fakhruddin Farooqui for Defendant.

Date of hearing: 28th November 1985.

The parties entered into an agreement, dated 3‑4‑1969, which was subsequently modified by another agreement, dated 15‑5‑1980. Clause 28 of the first agreement and clause 31 of the second agreement provided as follows: ‑

"28,‑All disputes which may arise under this agreement or in any way relating to or touching the same shall be settled as far as may be by mutual discussions failing such settlement of the disputes or any one of them shall be referred to a sole arbitrator mutually agreed upon. The provisions of the Arbitration Act, 1940 and all statutory modifications thereof shall apply to such arbitration. Venue of arbitration shall be Karachi.

31.‑ All disputes arising under the Agreement or in any way relating to or touching the same shall be settled as far as may be by mutual consent. Falling such settlement the dispute shall be referred to a sole arbitrator mutually agreed upon. The provisions of the Arbitration Act, 1940 and all statutory modifications thereof, shall apply to such arbitration. The venue of arbitration shall be Karachi."

Certain disputes arose out of the said agreement. The plaintiff by its letter, dated 18‑1‑1982 called upon the defendant to restore the supply of Gas in 27 Kg. Cylinders and also called upon them to name an arbitrator for purpose of referring the dispute. The defendant having failed to nominate an Arbitrator on their behalf, the plaintiff through its Advocate's letter, dated 1‑2-1982 nominated Mr. G.R. Arshad as the sole Arbitrator and called upon the defendant to concur in that appointment. The defendant did not concur in the nomination .of Mr. G.R. Arshad as the sole Arbitrator. They, however, suggested that the matter may be settled by mutual discussion. Accordingly mutual discussions were held and a note, dated 4‑4‑1982 Annexed to the petition as "M" was signed by the respective parties. The said annexure "M" mentions about the settlement of certain disputes amicably. However, clause 3 of the said note provides as follows:‑

"3. All other claims of the parties against each other shall be settled by mutual discussions, and the parties shall make every attempt to resolve the outstanding difference as expeditiously as possible and within the shortest possible period and in accordance with the terms of the agreements between the parties."

2. As detailed in the petition there have been constant efforts on behalf of the plaintiff to settle the remaining disputes with the defendant amicably, but it appears that all attempts failed in this behalf for one reason or the other. Hence this suit has been filed by them.

3. Mr: Fakhruddin Farooqui, learned counsel for the defendant submits that there is no dispute which remains pending for settlement, but he has not been able to satisfy me. Had there been any settlement after 4‑4‑1982, a written, agreement to the effect would have been filed by the defendant.

4. The learned counsel for the defend ant does not dispute the arbitration clauses contained in the two agreements. There are, however, certain disputes which are to be decided by arbitration as mutual negotiation have failed.

5. I, therefore order that the arbitration clauses contained in th agreement, dated 3‑4‑1979 and 15‑5‑1980 be filed in Court and make an order of reference to the Arbitrator to be appointed by the parties. Mr. Fakhruddin Farooqui undertakes to appoint his Arbitrator within week. The suit is disposed of accordingly.

6. In view of 'the order passed in the suit, C.M.A. No.3975/85 is not pressed by the plaintiff; which is accordingly dismissed.

A.A Order accordingly.

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