P L D 1978 Karachi 152 STAY & INJUNCTIONS

P L D 1978 Karachi 152

Before Zaffar Hussain Mirza, J

MESSRS HAKIMUDDIN HARMUSJI & SONS-Plaintiff's

versus

MESSRS GHAFOOR TEXTILE MILLS-Defendant

Suit No. 647 of 1975, decided on 31st July 1977.

(a) Arbitration Act (X of 1940)-

-- S. 35---Statutory bar on proceeding with arbitration-Held, attracted only in case lejal proceedings
upon whole of subject-matter of reference have commenced between parties to reference.

The statutory bar on proceeding with the arbitration under section 30 of Arbitration Act, 1940 is
attracted only in case legal proceedings "upon the whole of the subject-matter of the reference"
have been commenced between the parties to the reference. Therefore, before invoking the bar of
section 35, it is incumbent upon a party to establish that the subject-matter of the reference and the
legal proceedings i9 identical. In other words it would mean that the cause of action or the dispute
between the parties which is the subject-matter of the legal proceedings should be such as covers
the dispute forming the subject-matter of the submission.

Shiva Jute Baling Ltd. v. Hindley & Co. Ltd. A I R 1959 S C 1357 fol.

(b) Arbitration Act (X of 190)--

-- Ss. 33 & 41 read with Second Schedule-Powers of Court-Court entertaining an application under
S. 33-Held, possesses power to order stay of proceedings before arbitrator-Such order partakes of
nature of a stay a9 distinguished from an order of injunction. [Injunction--Arbitrator].

The power of stay of the arbitration proceedings before the arbitrators is not expressly conferred.
But to accept this construction would amount to denuding the Court of the power of effective
adjudication of a Us over which the statute has granted it express authority and jurisdiction.

When the Court is conferred jurisdiction under section 33 of Arbitration Act, to declare the
arbitration agreement as non-existent or invalid, the power to stay the arbitration proceedings
pending the decision of the controversy would obviously be ancillary to the main relief. It is now
well established that if there is no valid reference, the purported award is a nullity, and calf be
challenged in any appropriate proceeding.

It, therefore, follows that if an arbitration proceeding is prima facie doomed to result to an award
which will be a nullity, the Court vested with jurisdiction to decide the validity of the reference
obviously would have the power to stay the further proceedings which eventually may be found to
be without jurisdiction.

The Court which entertains an application under section 33 has the power to order stay of the
proceedings before the arbitrator and such an order would partake of the nature of a stay as
commonly understood and as distinguished from an order of injunction.

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P L D 1978 Karachi 152 STAY & INJUNCTIONS

Sind Employees' Social Security v. Adamjee Cotton Mills Ltd. P L D 1.975 S C 32 ; Commissioner,
Khairpur Division v. Ali Sher Sarki P L D 1971 S C 243 and Chhabba Lal v. Kallu Lal A I R 1946
P C 72 ref.

(c) Civil Procedure Code (V of 1908)-

0. XXXIX, rr. I 8t 2 8t O. XL1, r. 5-"Injunction" and "stay older"-Distinction.-[Injunction].

The nature and incidents of an order of stay as understood in our judicial system is that it is
addressed and binds a subordinate Court or Tribunal. Whereas an injunction is essentially directed
against and enjoins a party to the proceeding from doing or from omitting to do certain acts. The
former binds the subordinate Court or Tribunal from proceeding further in It pending proceeding or
from executing an order parsed by itself. In the latter case the effect of injunction is to bind the
parties. This essential distinction has assumed great importance in relation to the operation of the
two types of orders. The judicial consensus holds that an order of stay takes effect immediately on
being passed even if it is not brought to the notice of the subordinate Court or Tribunal, whereas an
injunction order becomes operative upon being served on the party against which it is directed.

(d) Practice and procedure-

-Right to remedy in a Court of law-Field, a substantive right and sot a mere matter of
procedure-Mere act of a party or Tribunal-Cannot obliterate or set at naught such right to remedy.

It is now well laid down that a right to remedy in a Court of law is a .substantive right and not a
mere matter of procedure. Upon the jurisdiction of the competent Court being lawfully invoked, the
right to remedy -matures into a vested right.

If a statutory change of a fundamental law like the Constitution. has no effect on the vested right of
an individual to remedy, the mere act of a party or a tribunal changing his position cannot be held to
obliterate or set at naught such right to remedy.

Sutlej Cotton Mills Ltd. v. Industrial Court P L D 1966 S C 472 ref.

(e) Arbitration Act (X of 1940)-

--- S. 33-Right to specific remedy provided for under S. 33 invoked prior to passing of
award-Cannot be taken away merely by fact that award has been passed.

Rubinstein on Treatise on Jurisdiction and Illegality, p. 219 ref:

(f) Jurisdiction-

- Parties cannot, by their act. deprive Court of law of jurisdiction to adjudicate and decide a case
having seizin thereof.

Mansoorul Arfin for Plaintiff (in Suit No. 647 of 1975) and for Respondent (in J. M. No. 28 of
1974).

M. G. Dastgir for Defendant (in Suit No. 647 of 1975) and for Petitioner (in J. M. No. 28 of 1974).

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