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IN THE COURT OF DISTRICT JUDGE LAHORE

Misc. Appeal No.____________/2008

1. Autotechnik (Pvt) Limited, a company incorporated under the


Companies Ordinance, 1984, having its registered office at 29-C-II,
Gulberg III, Lahore, through its director Attique Ahmed.
2. Attique Ahmed s/o Shafeeq Ahmed resident of House #126-A, Ahmed
Block, New Garden Town, Lahore
3. Faisal Farooq s/o Farooq Ahmed resident of House #161, Shadman II,
Lahore
4. Farooq Ahmed s/o Taj Din resident of House #161, Shadman II, Lahore
5. Mrs. Naseem Akhtar w/o Farooq Ahmed resident of House #161,
Shadman II, Lahore

. Appellants/plaintiffs
VERSUS
1. Porsche Middle East & Africa, a company incorporated under the laws of
United Arab Emirates having its registered office at P.O. Box 54299, Dubai
Airport, Free Zone, Dubai, United Arab Emirates.
2. Syed Abuzar Bokhari son of Syed Manzoor Hussain Bokhari resident of
House no. 11/B-2, Asad Jan Road, Lahore Cantt. Lahore.
3. Naureen Khalid wife of Mr. Syed Abuzar Bokhari resident of House no.
11/B-2, Asad Jan Road, Lahore Cantt. Lahore.
4. Performance Automotive (Pvt) Ltd, having its registered office at 23 Tipu
Block, New Garden Town, Lahore
. Respondents/defendants

APPEAL UNDER ORDER 43 RULE 1(r) CPC AGAINST THE ORDER DATED
21/07/2008 PASSED BY MR. IFTIKHAR AMED, LEARNED CIVIL JUDGE,
LAHORE.
Respectfully Sheweth;
1.

That the appellant No. 1 is a company incorporated under the Companies


Ordinance and has been conducting business as an established

agency/importership of Porsche vehicles. The appellant No.1 has been


marketing and selling Porsche vehicles in Pakistan and for this purpose
had established after sales services for Porsche customers. The appellant
No. 2, 4 & 5 are directors and shareholders of the appellant No. 1 while
appellant No. 3 is its Chief Executive Officer. Appellant No. 1 is acting
through its duly authorized director Attique Ahmed who is well
conversant with the facts of the case. (Copy of the Board resolution is
attached as Annex A)
2.

That the respondent No.1 is a company registered under the laws of


United Arab Emirates and is engaged in the business of selling Porsche
vehicles in Middle East and African countries. Respondent No.2 is a
director and shareholder of appellant No.1, while respondent No.3 is a
previous director and shareholder of appellant No.1. The respondent No.4
is a company incorporated and established by respondent No.2 and
respondent No.3. The respondent No.1 has been the principal of appellant
No.1 and the agency relationship between the principal and appellant
No.1 is coupled with interest. The respondent No.1 in 2005 partnered with
appellant No.1 to tap the Pakistani market and met with resounding
success

as

sales

of

respondent

No.1

Porsche

vehicles

reached

unimaginable levels considering the conditions at Pakistani luxury vehicle


market.
3.

That in February 2008, the respondent No.1 attempted to terminate the


agency of appellant No.1 in an unceremonious and suspicious manner.
Since the attempted termination was outrageously repudiatory of the
commitments between the parties, the appellant No.1 was forced to
institute a suit for permanent injunction on 06/02/2008 in the court of
Senior Civil Judge, Lahore, against the respondent No.1 along with other
respondents. In the suit, the appellants sought a declaration that the letter
dated 04/02/2008 from respondent No. 1, purportedly terminating the
appellant No. 1s agency coupled with interest, is illegal, void ab nitio and
nullity in the eyes of law. The appellant No.1 also sought permanent
injunction against respondent No. 1 restraining it from appointing
respondent No.4 or any other person as its agent of Porsche vehicles in
Pakistan. The afore-said prayer required framing of issues and recording
of evidence.

The appellant No.1, along with the suit, also filed an

application under Order 39 Rule 1 & 2 for interim injunction, seeking the
suspension of the termination letter dated 04/02/2008. It was also prayed
that the purported appointment of respondent No. 4 as the new Porsche
agent in Pakistan should also be suspended during the pendency of the
suit. The suit was entrusted to the court of Mr. Iftikhar Ahmed, Civil
Judge Lahore, who after hearing appellants counsels arguments granted
an ad interim injunction against the respondents and suspended the
operation of the termination letter dated 04/02/2008. The ad interim order
passed on 06/02/2008 also suspended the appointment of respondent No.
4 as the new agent of Porsche vehicles. (Copy of the interim order of the
learned judge is attached as Annex B)
4.

That subsequently written statements were filed by the respondents. The


appellant No.1 had to file a rejoinder to the written statement filed by
respondent No.1 in order comprehensively rebut the contentions raised by
respondent No.1 against appellant No.1. The learned court fixed a date for
arguments on the application under Order 39 Rule 1 & 2. Detailed
arguments ensued on the application by appellants and respondents
counsels. The appellant argued and claimed that it had a prima facie
arguable case and had every likelihood of success. It was also argued that
the balance of convenience and inconvenience lies in favor of the
appellants and if an interim injunction was not granted the appellant
would suffer irreparable loss and damage.

5.

That after hearing the arguments of the counsels for the parties to the suit,
the learned judge reserved a date on which the order was to be
announced. The learned judge was now required to decide whether the
appellants satisfied the requirements of Order 39 Rule 1 & 2. The learned
judge did not announce the order on the date fixed by him. There after
many dates were given, but no order was announced by the learned judge.
Finally on 21/07/2008 the learned judge orally delivered the order,
announcing the vacation of the ad interim injunction granted on
06/02/2008. The written order was delivered on 28/07/2008. The learned
judge while delivering the order stated, inter alia, that the appellants
relationship was not governed by a written agreement; that there was no
agency relationship between appellant No. 1 and respondent No. 1; and no

agency coupled with interest exists in favor of the appellant No. 1 as


appellant No. 1 was never an agent of respondent No.1. The learned civil
judge held that the Letter of Intent was the sole document governing the
relationship between the parties, which in any event was not a contract;
and that that too expired.
6.

That the order dated 21/07/2008 (the Impugned Order) is bad in law,
illegal, void ab inito and liable to be set aside, on inter alia, the following:

GROUNDS
a)

That under the principles governing an application under Order 39 Rule 1


& 2, the court is required to decide whether the petitioner has made a
prima facie arguable case, whether the balance of convenience and
inconvenience is in favour of petitioner and lastly whether the petitioner
would suffer irreparable loss and injury if the temporary injunction is not
granted. The order dated 21/07/2008 passed by the learned civil judge
completely failed to adjudicate any of the afore-referred ingredients
required under Order 39 Rule 1 & 2. The Impugned Order on the other
hand decided the case on its merits. The Impugned Order is liable to

b)

dismissed on this ground alone.


That the Impugned Order completely failed to address the first and
foremost requirement of an application under Order 39 Rule 1& 2 in so far
as it did not address the issue of prima facie arguable case. The learned
judge manifestly failed to take cognizance of the facts which so clearly and
evidently depicted a prima facie arguable case. The learned civil judge
also failed to take account of those facts which were not denied or
controverted by the respondents. For instance was an admitted and
established fact that the appellant No. 1 was appointed as the sole
importer of Porsche vehicles and parts on 24/08/2008 through a joint
press conference in Lahore. It was explicitly stated in the press release that
the status of appellant No.1 was: Sole importership of Porsche automotive
products, parts and accessories and driver selection products It was also clearly
stated that the purpose of the agency was To represent all commercial
interests of Porsche AG for Pakistan. The press release also said: Porsche sets
up operations in Pakistan, Partnering with such a resourceful company such as

Autotechnik etc. These statement which were jointly made by appellant


No. 1 and respondent No.1, provide sufficient basis for a prima facie case
and for a temporary injunction to be granted. There were also numerous
exchanges of emails, letters and other business documents which clearly
showed that an agency relationship existed. One such important fact
which testified the prima facie basis of the appellant No.1s case was the
celebrated event in Lahore where the Managing Director of respondent
No. 1 in his speech on 08/04/2006 said: Our partnership with
Autotechnik is definitely on the right track and Porsches future in Pakistan
is looking very positive indeed. As usual, Porsche Middle East and Africa
would provide full support to Autotechnik to ensure another success for
Porsche in another promising market. Similarly another prima facie basis
of the existence of agency was the fact that appellant No.1 was always
represented as Porsche Pakistan on the official shields given to the
customers of Porsche. These shields were also given jointly by respondent
No. 1 and appellant No.1. The Impugned Order is liable to be set aside on
c)

this ground alone.


That the Impugned Order also failed to address the second important
requirement of temporary injunction, in so far as it did not address the
issue of balance of convenience and inconvenience. The learned civil judge
failed to appreciate that the balance of convenience and inconvenience lied
in favor of the appellant No. 1. It failed to acknowledge that the appellant
No. 1 had established Porsche business which was built over a period of
time and appellant No.1 would face more inconvenience than respondent
No.1 if temporary injunction was not granted. This fundamental test for
the grant of temporary injunction was completely ignored by the learned
civil judge. The Impugned Order is liable to be set aside on this ground
also.

d)

That the Impugned Order also failed to address the third important
requirement of temporary injunction, in so far as it did not address the
issue of irreparable loss and injury. The learned civil judge failed to
appreciate that the investments worth millions made by the appellants
would be completely ruined if the injunction is not granted during the
pendency of the suit. In particular, the learned civil judge did not even

take into account the fact that if injunction is not granted the entire
investments, effort and time spent by the appellant No.1 will go to waste,
the show rooms and services centres, the plant and equipment, office and
machinery, promotional data, furniture and fixtures etc will also all be
completely worthless and useless. In particular the appellant No.1 would
be in serious breaches of its commitments to third parties and will have to
pay unprecedented damages for the land agreements relating to show
rooms and service facilities. Similarly the reputation built among the
customers and the customer base would also be destroyed. The learned
judge has also failed to take cognizance of the fact that appellant No.1 is
continuously suffering loss and damage and its reputation being
tarnished. The appellants would now, never be able to get any similar
importership or agency of any luxury brand, as, would be principals of
such brands will be hesitant in having any business relationship with
appellants. The Impugned Order is liable to be set aside on this ground
also.
e)

That the learned judge fundamentally erred in holding that Letter of


Intent did not give rise to a concluded contract. The learned judge failed to
appreciate that the term Letter of Intent is not a term of art and does not
refer merely a future intent to enter into a contract. The Letter of Intent
was a binding understanding between the parties and required from
appellant No.1 meeting of certain performance standards. The ruling of
the learned judge that Letter of Intent expired on 31/07/2005 misses the
whole point of appellant No.1s argument in the suit. It is submitted that
the appellant No.1s agency coupled with interest existed independently
from the Letter of Intent (the LOI) dated 12/04/2005. The LOI which
was to expire 31/07/2005 was never intended to be the sole document
which governed the relationship between the appellant No.1 and
respondent No.1. It is an admitted fact that the marketing and promotion
of Porsche vehicles, hiring and training of professional staff as per Porsche
standards, setting up of show rooms and service facilities and the
substantial investments made by the appellant No.1 would never have
taken place were the agency relationship governed solely by LOI. The
Impugned Order is liable to be set aside on this ground also.

f)

That the Impugned Order went completely out of context when, referring
to a particular clause of the LOI, it held that no relationship of agency
existed. The learned judge completely erred in holding that clause m of
the LOI depicts that the relationship of the parties was not that of
principal and agent. While the learned judge has not explained the
reasons for arriving at such conclusion, there are many other clauses of the
LOI which clearly show that the relationship between appellant No.1 and
respondent No.1 was essentially that of principal and agent. For instance
clause a of the LOI clearly state that Porsche business of the appellant
No.1 should exist independently of any other business interest and no
change in shareholders can be made without prior approval of the
respondent No.1. Similarly, clause c required approval from respondent
No.1 regarding appointments to all management and customer facing
personnel. Such an interdependent relationship can only be contemplated
in an agency situation. Similarly the requirement to strictly follow Porsche
CI guidelines (clause e), to cater for a full service facility for Porsche-fully
complying Porsche CI guidelines (clause f), to provide financial, staffing
and marketing back-up to ensure the foundation and success of Porsche
business (clause i), to launch Porsche as a brand within Pakistan and
develop the market so that the projected volumes are achieved (clause
j), maintaining marketing spending of at least 3% of the total Porsche
sales turnover (clause j), to keep harmonized prices of Porsche vehicles
in agreement with the respondent No.1, to

ensure training of staff as

required by respondent No.1 (clause l), all indicate undoubtedly that the
relationship between appellant No.1 and respondent No.1 was that of
agent and principal. The logic of the learned judge in choosing clause m
and making it the basis of the ruling that there was no relationship of
principal and agent, is, to say the least, unfathomable. The Impugned
g)

Order is liable to be set aside on this ground also.


That the learned civil judge completely failed to appreciate the fact that
the relationship between appellant No.1 and respondent No. 1 was not of
sale and purchase of vehicles on behalf of defendant No.1 but also
involved a complete package to the customers in the shape of Porsche
vehicles along with warranty and a commitment of full after sales services
and facilities. The sale of a Porsche vehicle was inclusive of the

commitment by defendant No.1 that the customer shall receive full after
sales services and parts during the warranty period. The agency aspect of
the relationship is patently clear from this arrangement, whereby
appellant No.1 provides warranty services, including spare parts not on it
h)

own but on behalf of the respondent No.1.


The learned judge erred on facts, when it held that there was no such
course of dealing between the parties which gave an inference that the
relationship between the parties was that of principal and agent. As stated
above, the fundamental aspect of the agency relationship related to the
warranties/guarantees given by appellant No.1 on behalf of the
respondent No.1. The appellant No.1 invested in parts and labor services
and latter got compensation from the principal (respondent No.1) for the
warranty. The appellant No.1 was bound to provide warranty services to
the Porsche customer for a period of two years free of cost and held no
discretion to do otherwise. An elaborate online IT system has been
specifically designed to process the warranty contract and transactions
after the customer has purchased a vehicle. This arrangement clearly
builds a nexus between respondent No.1, appellant No.1 and the
customer. It is pertinent to mention here that the appellant No.1 has over
fifty tri-party contracts (between respondent No.1, appellant No.1 and the
customer) running all the way to the year 2010. It is pertinent to mention
here that the warranty book refers to this relationship as partnership. It
states: The liability for defects is based on the conditions according to the
Purchase Agreement concluded between the initial purchaser and the Porsche
Partner Therefore the Impugned Order is liable to be set aside on this

i)

ground also.
That the learned civil judge erred on facts when it failed to appreciate that
the appellant No.1 as agent of respondent No.1 was required to account
for sales proceeds. Each month, the appellant No.1 was bound to submit a
monthly sales and stock report detailing each sale. Similarly, the warranty
services carried out by the appellant No.1 had to be invoiced within the
stipulated period and reported to the respondent No.1 through the
elaborate IT systems for processing and credit. The Impugned Order is

j)

liable to be set aside on this ground also.


That the learned judge erred in law when it held that appellant No.1s
agency was not coupled with interest. He failed to take account of fact

where the agent has developed an interest in the subject matter of the
agency, then the agency is coupled with interest and is not terminable.
The Impugned Order failed to appreciate that there was no termination
clause in the LOI. The investments and time and effort of appellant No.1
in the Porsche business secured by the agency itself. The Impugned Order
k)

is liable to be set aside on this ground also.


That the learned civil judge failed to appreciate the fact the agency was so
evident from relationship between the appellant No. 1 and respondent No.
1. The probationary LOI dated 12/04/2005 and joint announcement at the
press release on 24/09/2005 all required the appellants to make huge
investments in the infrastructure and marketing of the Porsche vehicles. It
is evidently clear from the record that the return on these investments
would have to be at a much later date. The security for these return lay in
the agency itself. The Impugned Order is therefore liable to be set aside on

l)

this ground alone.


That the learned civil judge failed to take cognizance of the fact that the
agency was integral to the relationship between appellant No.1 and
respondent No.1. It is almost inconceivable for any businessman to make
huge investments on the promotion and establishment of a brand without
any sort of security for its investments. The security for the investments
made by the appellant No.1 was the agency itself. The learned judge
complete failed to realize that respondent No.1 cannot just terminate the
agency at its whim and fancy, and leave the plaintiffs high and dry and
bankrupt. It would be unjust and inequitable, if respondent No.1 is
allowed to terminate the agency coupled with interest of appellant No.1.
The Impugned Order is therefore liable to be set aside on this ground
alone.

m)

That the learned trial court failed to apply its judicial mind and proceeded
absolutely in arbitrary and capricious manner while passing the order
which in fact was the ultimate relief prayed for by the respondents in their
suit.

n)

That the Impugned Order is not sustainable in the eyes of law and is
something unprecedented and unusual in as much as the Impugned
Order has given the ultimate relief which was subject matter of the suit
and which could only have been granted after a thorough trial of the suit.

o)

That even otherwise the Impugned Order is too harsh, oppressive and
tends to completely damage the established business of the appellants and
therefore is liable to be set aside.

q)

That the learned civil judge has exceeded its lawful jurisdiction while
issuing the Impugned Order in as much as the said order tends to
conclusively determine the rights of the parties with regard to the matter
in controversy in the suit which could have only been the result of final
adjudication in the form of final judgement and decree. In this respect the
Impugned Order dated 21/07/2008 is patently contrary to law.

Prayer
In view of the afore-said it is humbly prayed that the order dated 21/07/2008
may kindly be set aside being illegal, void ab initio and contrary to law.

It is further prayed that the:


1. The operation of the advertisement dated 04/02/2008 appearing in the
business recorder and other newspapers and the so called letter dated
03/02/2008 attempting to terminate the appellants agency coupled
with interest may be suspended; and
2. Respondent No. 1 may be restrained during the pendency of the suit
from terminating the plaintiff No. 1s agency coupled with interest
relating to Porsche Business;
3. Respondent No. 1 be restrained from stopping plaintiff No. 1 from
conducting Porsche Business
4. Respondent No.1 be restrained from appointing respondent No. 4 or
any other person as its agent/importer in respect of the Porsche
Business in Pakistan and/or allowing respondent No. 4 and/or any
other person from doing or conducting Porsche Business in Pakistan
5. Respondent No. 4 be restrained from claiming himself as the agent of
Porsche and carrying on the Porsche Business in Pakistan.

Any other relief which is deemed fit and proper may also be awarded to the
appellants.

APPELLANTS

Through

(Syed Ali Zafar)


Barrister at Law

(Zahid Nawaz Cheema)


Advocate High Court

(Mohammad Saqib Jillani)


Advocate High Court
Mandviwalla & Zafar
Zafar Chambers
7/B-1, Aziz Avenue
Canal Bank, Gulberg V
Lahore

IN THE COURT OF DISTRICT JUDGE LAHORE

Misc. Appeal No.____________/2008

Autotechnik (Pvt) Limited Vs. Porsche Middle East & Africa

APPEAL UNDER ORDER 43 RULE 1(R) CPC AGAINST THE ORDER DATED
21/07/2008 PASSED BY MR. IFTIKHAR AHMED, LEARNED CIVIL JUDGE,
LAHORE.

Affidavit of:-

Attique Ahmed s/o Shafeeq Ahmed resident of House #126A, Ahmed Block, New Garden Town, Lahore

I, the above deponent, do hereby solemnly affirm and declare as under:-

1.

That the above named deponent has filed accompanying Appeal in this
hon' ble court and the contents of the same may kindly be read as an
integral part of this affidavit.

2.

That the contents of the accompanying Appeal are true and correct to the
best of my knowledge and belief and nothing has been concealed thereof.

Deponent
VERIFICATION
Verified on oath at Lahore on this _______ day of July 2008 that the contents of
the above affidavit are true and correct to the best of my knowledge and belief.

Deponent

IN THE COURT OF DISTRICT JUDGE LAHORE

In re:

Autotechnik (Pvt) Limited Vs. Porsche Middle East

APPLICATION FOR THE GRANT OF STAY/SUSPENSSION OF


OPERATION OF THE IMPUGNED ORDER DATED 21/07/2008 PASSED BY
IFTIKHAR AHMED, LEARNED CIVIL JUDGE, LAHORE.
Respectfully Sheweth;
1.

That the petitioners have filed the titled appeal in this Honble Court in
which no date for hearing so far has been fixed.

2.

That the petitioners have good prima facie case in their favour.

3.

That the balance of convenience also lies in favour of the petitioners as


well as in favour of the grant of stay/suspension against the operation of
impugned order dated 21/07/2008.

4.

That the contents of accompanying appeal may kindly be read as an


integral part of this petition.

5.

That the impugned order dated 21/07/2008 is contrary to the established


principles governing grant of temporary injunction and there is likelihood
of irreparable loss and damage being caused to the petitioners if the
impugned order is allowed to remain in field.

PRAYER
In view of the above it is most respectfully prayed that the impugned order dated
21/07/2008 may kindly be suspended during the pendency of the accompanying
appeal and the petition may kindly be accepted.

Any other relief which is deem fit and proper may also be awarded to the
appellants.

APPLICANTS

Through

(Syed Ali Zafar)


Barrister at Law

(Zahid Nawaz Cheema)


Advocate High Court

(Mohammad Saqib Jillani)


Advocate High Court

Mandviwalla & Zafar


Zafar Chambers
7/B-1, Aziz Avenue
Canal Bank, Gulberg V
Lahore

IN THE COURT OF DISTRICT JUDGE LAHORE

In re:
Autotechnik (Pvt) Limited Vs. Porsche Middle East

APPLICATION FOR THE GRANT OF STAY/SUSPENSSION OF


OPERATION OF THE IMPUGNED ORDER DATED 21/07/2008 PASSED BY
IFTIKHAR AHMED, LEARNED CIVIL JUDGE, LAHORE.

Affidavit of:-

Attique Ahmed s/o Shafeeq Ahmed resident of House #126A, Ahmed Block, New Garden Town, Lahore

I, the above deponent, do hereby solemnly affirm and declare as under:-

1.

That the above named deponent has filed accompanying application in


this hon' ble court and the contents of the same may kindly be read as an
integral part of this affidavit.

2.

That the contents of the accompanying application are true and correct to
the best of my knowledge and belief and nothing has been concealed
thereof.

Deponent
VERIFICATION
Verified on oath at Lahore on this _______ day of July 2008 that the contents of
the above affidavit are true and correct to the best of my knowledge and belief.

Deponent

NOTICE
UNDER ORDER XLIII RULE 3 CPC

In Re:
Autotechnik (Pvt) Limited and others
Versus.
Porsche Middle East & Africa and others

1. Porsche Middle East & Africa, a company incorporated under the laws of
United Arab Emirates having its registered office at P.O. Box 54299, Dubai
Airport, Free Zone, Dubai, United Arab Emirates.
2. Syed Abuzar Bokhari son of Syed Manzoor Hussain Bokhari resident of
House no. 11/B-2, Asad Jan Road, Lahore Cantt. Lahore.
3. Naureen Khalid wife of Mr. Syed Abuzar Bokhari resident of House no.
11/B-2, Asad Jan Road, Lahore Cantt. Lahore.
4. Performance Automotive (Pvt) Ltd, having its registered office at 23 Tipu
Block, New Garden Town, Lahore
Sir,
Please take notice that I am filing an appeal against order dated 21/07/2008
passed in the titled suit.

COUNSEL
Mandviwalla & Zafar
7-B/1 Aziz Avenue, Canal Bank,
Gulberg V, Lahore
(042) 5715479-82

IN THE COURT OF DISTRICT JUDGE LAHORE

In re:

Autotechnik (Pvt) Limited Vs. Porsche Middle East & Africa

INDEX

Sr. No.

Documents
Pages

Dated

1.

Appeal with affidavits

31/07/2008

2.

Copy of the memorandum of appeal

3.

Impugned Order

21/07/2008

4.

Stay Application with affidavits

31/07/2008

5.

Notices with receipts

6.

Power of Attorney

Appellants
Through
Counsels
Mandviwalla & Zafar
Zafar Chambers
7/B-1, Aziz Avenue
Canal Bank, Gulberg V
Lahore