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Revision Applications Nos. 195 and 226 of 1977, decided on 3rd October, 1985.
‑‑‑S. 34‑‑AgreOment providing for arbitration‑‑Stay of suit‑‑No infirmity or vagueness found in relevant clause of Partnership Agreement between parties in respect of reference of disputes and other matters to Arbitrators mutually appointed‑‑Orders of both Courts below in dismissing application of petitioners to stay suit for rendition of accounts filed by respondent, held, was clearly result of misconstruction of arbitration clause and non‑applicability of provisions of Arbitration Act, 1940‑‑Both orders were set aside and suit stayed in circumstances.
Mian Khuda Bakhsh and others v. Tahir Parvez, Civil Judge, Ist Class, Vehari and others 1984 C L C 1521 ref.
Maroof Ali Khan for Applicant.
Mirza Jaffer Beg for Respondent.
Date of hearing: 3rd October, 1985.
These two Revision Applications arise out of a suit filed by the respondent against Umar the applicant in Revision No. 195 of 1977 and Razzak applicant in Revision Application No. 226 of 1977. As common questions of law and facts are involved, both the Revision Applications will be disposed of by this judgment.
The respondent has filed a suit for rendition of accounts against both the applicants alleged to be his partners on the basis of a partnership agreement, dated 4‑7‑1976. The applicants applied under section 34 of the Arbitration Act for stay of the suit. Clause 18 of the Partnership Agreement reads as follows:‑---
"That all the disputes and difference which may arise between the parties with regard to construction, meaning and effect of this partnership deed or any part thereof regarding the account profit or loss of the firm or rights and liability of the parties under this deed or dissolution or winding up of business or any other matter relating to partnership firm shall be referred to Arbitration of the Arbitrators mutually appointed shall be final and binding on parties."
The respondent raised an objection that the suit should not be stayed as the arbitration agreement is vague. This contention appealed to the learned trial Court, who dismissed the application and the first appellate Court also upheld the said order.
Mr. Maroof Ali Khan the learned counsel for the applicant has contended that bare reading of this clause will show that there is no infirmity or vagueness. Both the learned Courts below have held that the mode of appointment of arbitrators is too vague to be given effect to. In my view, the arbitration clause is clear and unambiguous. It requires the arbitrators to be mutually appointed which means that each party has to appoint arbitrator mutually with the consent of each other. The arbitrators are to be appointed with the consensus of the parties. In these circumstances, if the consensus is not reached then either of the parties can invoke section 8 of the Arbitration Act for appointment of the Arbitrator by the Court. In this regard, the learned counsel has referred to Mian Khuda Bakhsh and others v. Tahir Parvez, Civil Judge, 1st Class, Vehari and others 1984 C L C 1521. The order of both the Courts below is clearly a result of misconstruction of the arbitration clause and non‑applicability of the provisions of the Arbitration Act. Both the orders are set aside. The suit is stayed and the application under section 34 Arbitration Act stands granted.
H . B . T . Revision accepted.
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