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Suit No. 116 of 1960, decided on 27th March 1961.
S. 34‑Refusal "to pay money on breach of contract"‑Held, "dispute" within meaning of S. 34.
S. 34--‑Karachi Cotton Association Ltd., Article 93‑-- No member can seek aid of Court unless he has submitted himself to arbitration proceedings--- Member, held, not entitled to dispense with arbitration proceedings or lodge a suit to save himself from expense.
H. T. Raymond for Plaintiffs.
Naimuddin far Defendant‑Applicants.
This is an application under section 34 of the Arbitration Act. 1940, for the stay of the proceedings in this Court.
Mr. Raymond for the plaintiffs has raised two‑fold contentions before me. He has contended in the first place that there is no dispute within the meaning of rule 39 of the Rules of the Karachi Cotton Association Limited. It is admitted by Mr. Raymond that the present suit arises out of failure of the defendants to carry out the terms of the contract that was entered into between the parties the suit is for the recovery of a certain sum of money from the defendants. It has been held in a number of authorities that refusal to pay is a dispute within the meaning of section 34 of the Arbitration Act, 1940. I hold that there is a dispute between the parties.
The next contention of Mr. Raymond is that section 34 of the Arbitration Act gives a discretion to the Court in the matte of stay of proceedings. Mr. Raymond contended relying upon Art. 93 o: the Memorandum and Articles of Association of the Karachi Cotton Association Limited that the plaintiffs will be obliged to file a suit after the award has been given, and therefore the plaintiffs should not be put to unnecessary expense and delay. I do not think that the correct interpretation of Article 93 of the Memorandum and Articles of Association is as contended by Mr. Raymond. All that it means is that no member of the Association can seek the aid of the Court unless it has submitted itself to the arbitration proceedings. It does not mean that the award would 6e a nullity and the plaintiffs will have to commence the proceeding afresh, If the award is given, the same can be made the rule of the Court subject to the objection of the party, against whom the award may be given.
I would for these reasons stay the proceedings under section 34 of the Arbitration Act, 1940.
S. B. Proceedings stayed.
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