Qasim Baig

Choice of Forum by Contract:

- When two or more courts have jurisdiction to try the suit, and the parties have contractually
agreed to try dispute in a forum. Then that forum which is referred to in the clause will be
approached for resolution.
- Such clauses are called forum clauses. They commonly appear in commercial contracts
where parties reside in different territorial jurisdiction.
- However, a forum clause in itself cannot divest jurisdiction of a court. Conversely, it cannot
grant a court jurisdiction in opposition to legislation.
- In England, jurisdiction clauses of commercial contracts have developed jurisprudence to
vest exclusive jurisdiction in agreed court, which exclude (expressly or impliedly) the
jurisdiction of courts provided by the law.

- The lack of clarity and its resultant conflict of views amongst HC was taken up by SC in
‘Mitsui Cases’.
- The appeal required adjudication on the validity and scope of ‘forum clauses’ included in
Bills of Lading by foreign shipping companies carrying cargo to Pakistan. The forum clauses
vested exclusive jurisdiction in courts outside Pakistan.
- Claim was filed for damages in local court (Chittagong) for short landed goods.
- Defendants filed application under Section 10 of CPC to challenge validity.
- The trial court and HC upheld the forum clause and decided that the jurisdiction vest
exclusively in the court agreed upon by the contracting parties.
- SC:
o No court of any country accepted that a such a foreign jurisdiction clause can legally
oust jurisdiction of the municipal courts.
o However, to preserve sanctity of contracts, the court relied on the UK’s
jurisprudence around ‘forum clause’. The Section 28 of the Contract Act of Pakistan
deals with arbitration clause, where the jurisdiction of court is not entirely ousted,
rather the Court merely stay their hands to allow the parties to resort to the ‘forum’
of adjudication that they have previously agreed to. Similarly, in cases of forum
clauses the court stayed its hand to allow parties to resort to their contractually
decided forum of adjudication.

Two Courts Having Jurisdiction:

- State Life Insurance v. Saleem:

o SC appeal on the matter of territorial jurisdiction of Trial Court of Lyallpur where a
matter regarding Special Survival Policy (Life Insurance) was decided.
o The appellant contended that as per the insurance policy agreement the forum
clause assigned jurisdiction to the Courts at Lahore.
o The appeal was allowed. Javid Iqbal, J stated:
 CPC Section 23:
  CPC Section 22:

o Where two or more courts have jurisdiction to try a suit, there is nothing contrary to
public policy in agreement, then the suit should be tried at one place rather the
other.

Time and Basis for Determination of Jurisdiction:

- Jurisdiction is established (est) by interpretation of jurisdictional facts. The discussion will

proceed to discuss how jurisdictional facts are interpreted (at what time and what basis) to
est jurisdiction.
- Est jurisdiction through Plaint:
o Raja Khurshid Ali v. Dr. Abdul Malik:
 Prima Facie, the jurisdiction is determined by the facts laid out in the plaint.
The court assumes that the stated facts in plaint are true vis-à-vis
jurisdiction. The suit is thus deemed entertainable before the court, unless
the defense taken makes the jurisdictional fact controversial.
 (For example), in this case, the question as to, whether the tenancy was
agricultural or non-agricultural, whether it is a land concern or industrial
concern, make the jurisdictional facts controversial.
 In such cases, enquiry is conducted and facts are found to determine
jurisdictional facts of the case. Which will be the grounds to invest or divest
the jurisdiction of a court.
 In sum, preliminary determination of jurisdictional facts is done from
reading of plaint and relied upon, unless defense poses a challenge to those
fact.
- List of Questions to Est Jurisdictional Facts:
o Monetary value of suit
o Movable or immovable property
o Where do the Defendant reside or conduct their business?
o Where did the cause of action arise
o Limits on pecuniary jurisdiction of a civil court
o Subject-matter
o Etc
- While location of property determines territorial jurisdiction, Section 20 of the CPC provides
that location of defendant or cause of action also determines territorial jurisdiction.
o United Distribution Pakistan Ltd. v. Al-Syed Agrochemicals:
 Plaintiff (agro) was registered in Karachi and engaged in sale of goods all
over the country
  Plaintiff and D had agreement for making phased payments before and after
delivery of goods to other Defendants, within 30 days.
 The Judge in this case “returned” the plaint to the plaintiff to be filed before
the Court having jurisdiction in the matter.

Want of Jurisdiction as opposed to wrong exercise of it:

- When a Court has no jurisdiction in matter to try put proceed to its adjudication, the
decision can be challenged for ‘want of jurisdiction’.
- Want of jurisdiction can also be challenged when a Court has acted in excess of the
jurisdiction conferred to it.
- S. Zafar Ahmad v. Abdul Khaliq:
o If a court has jurisdiction to decide matter of fact or law, and arrives at a decision
that the higher court opinions otherwise, does not mean that the decision is without
jurisdiction.
o However, if the point which affects the Court’s capacity to entertain the case or to
proceed further with it, the erroneous decision, if acted upon, would result either in
the illegal assumption of jurisdiction of the illegal refusal to exercise it.
- Board of Governors, Divisional Public High School Lyallpur v. Sh. Fazal Hussain & Company:
o A contract was pre-maturely cancelled by the School. The construction company
filed an application under Arbitration Act, 1940 seeking that the appellant file an
arbitration agreement in the Court.
o The School (Appellant) objected to territorial jurisdiction of the court and
competency. But the court decided in favor of the Construction Company. The
appointed arbitrator awarded a sum of money in favor of the Company.
o The school objected to the order of appointment and jurisdiction of the award,
which was rejected by trial Court.
o After the award was issued, an appeal was taken by the school before Appellate
Court.
o S.20 of the Arbitration Act states that the appointment of arbitrator by the Court is
appealable, but the no appeal was filed by the school at that stage of trial.
Therefore, the appellant is debarred from raising objection to the territorial
jurisdiction of the Court deciding application under S.20.
o The court further theorized:
 Inherent jurisdiction does render the decree a nullity. But the irregular
exercise or assumption of jurisdiction cannot be impugned in a collateral
action and it can only be set aside in appeal.
 In this case however, the appellant had the right to appeal under Section 39,
which was not exercised at that step of trial.

Determination of Existence of Jurisprudence:

- Appeals are usually the obvious remedy.

- Where no appeal is provided, section 115 of CPC maybe invoked:
-

- Jurisprudence around Section 115 of CPC aims to identify the application and restraint that
should be practiced.
- S. Zafar Ahmad v. Abdul Khaliq. The full bench of High Court discussed the purpose of S.115:
o The HC must always be in position to ensure that the subordinate courts do not
exceed their jurisdiction, but at the same time, the HC does not decline their
jurisdiction; and in exercise of their jurisdiction, do not act in a manner contrary to
the law, or in prejudice to any one party.
o The HC has a supervisory role in relation to S.115, but the HC is not empowered to
determine if the decision was taken on merit. A court’s may arrive at a decision that
the HC would take up differently, but the HC shall not on basis of that re-examine
the facts and provide alternate decision.
o Proceedings in lower courts should not be interrupted unnecessarily. Or it would
deflect the whole course of administration of justice.
o Following guidelines were laid down:
  Interruption of pending proceedings should be acoided.
 Section 115 is for correction of jurisdictional errors. The section should not
be therefore used to usurp the discretion of a sub-ordinate court.
o Aziz Ahmad v. Mst. Hajran Bibi:
 Material facts determined by the courts cannot be reopened by the High
Court in revisional jurisdiction.
 But if the material facts have been overlooked by the court, then the trial
court has committed an irregularity in the exercise of its jurisdiction. In such
case, HC justice’s interference is justified.