Summary: Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act (XVII of 2011)--- ----S.2(e)---Arbitration Act (X of 1940), Ss. 14 & 17---Foreign arbitral award---Scope---Application to make the award rule of court---Civil Court in Pakistan, jurisdiction of---Constitutional petition was filed to challenge the order passed by Civil Court dismissing an application filed by the petitioner by which dismissal of the main application (filed by respondent to make the award rule of court) was sought---Contention of the petitioner was that the Civil Court lacked jurisdiction as it was a foreign arbitral award within the meaning of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 ('the Act 2011'), and was to be conducted under the London Court of International Arbitration (LCIA) Arbitration Rules, 2014 ('the Rules 2014')---Validity---Record revealed that an arbitration took place between the petitioner and respondent by an Arbitration Tribunal set up through a letter dated 06.08.2020---The award was announced on 16.12.2021 by sole arbitrator appointed by the parties---The sole arbitrator was appointed by London Court of International Arbitration (LCIA) through an email dated 06.08.2020---Apart from that it was clearly mentioned in that email that the seat of arbitration shall be Lahore, Pakistan; the language of arbitration proceedings shall be English, and the law of arbitration and the arbitration agreement shall law of Pakistan---Further, there was no contention that the award so rendered was at Lahore which fact was mentioned on the first page of the copy of award which had been attached with present petition---The term 'foreign arbitral award' as defined in the Act, 2011 connotes that a foreign arbitral award shall mean a foreign arbitral award made in a Contracting State and such other State notified by the Federal Government in the Official Gazette---In the present case, the arbitral award was made at Lahore and so could not be considered as a foreign arbitral award made in a Contracting State---Otherwise, the term 'foreign arbitral award' would clearly mean taken literally that the arbitral award had been made in a foreign country though that country was a Contracting State---It did not matter whether the Rules, 2014 were applicable and in terms of which the sole arbitrator was appointed---What was of crucial significance was the fact that the award should be made in a Contracting State which would mean a State which was signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the New York Convention)---Since the award had been made at Lahore and the entire proceedings were also conducted at Lahore, there was no warrant for this/High Court to hold that the award in question was a foreign arbitral award which could only be enforced under the provisions of the Act 2011---Additionally, both the parties were Pakistani entities and there was no warrant to hold that they intended the ensuing award to be treated as foreign arbitral award within the meaning of the Act 2011---No illegality in the impugned orders have been noticed---Constitutional petition was dismissed. SpaceCom International, LLC v. Wateen Telecom Limited C.O No.25854 of 2023 and Civil App. No.722 of 2012 ref. Messrs Tradhol International SA Sociedad Unipersonal v. Messrs Shakarganj Limited PLD 2023 Lah. 621 distinguished. Muhammad Ahmad Qayyum and Shamail Arif for Petitioner. Zaki Rehman for Respondent No.2.

Summary: (a) Arbitration Act (X of 1940)--- ----S. 34---Stay of legal proceedings---Principle---For arbitration an applicant must remain ready and willing to properly partake in arbitration proceedings. (b) Maxim--- ----Actus curiae neminem gravabit---Meaning---Act of Court should prejudice no man. Abid Jan v. Ministry of Defence 2023 SCMR 1451 rel. (c) Arbitration Act (X of 1940)--- ----Ss. 30 & 34---Intra Court Appeal---Suit for recovery of money---Arbitration proceedings---Objection to award---Appellant / plaintiff filed suit for recovery of money from respondent / defendant---During proceedings, respondent / defendant sought stay of proceedings and the matter was forwarded to arbitrator but on his failure to pay requisite fee to the arbitrator matter was delayed---Appellant / plaintiff sought the suit restored but Trial Court after recording of evidence dismissed the suit on ground that it could not have been restored---Validity---Award which had been made after issuance of a supersession order passed by Trial Court was liable to be set-aside---After order of restoring the suit was passed by Trial Court, award could not have been made by an arbitrator even if the matter had been referred back and decided in arbitration---Division Bench of High Court set aside the order passed by Judge in who Chambers of High Court who insisted on the matter only being decided through arbitration proceedings---Division Bench of High Court set aside judgment and decree passed against appellant / plaintiff and the matter was remanded to Trial Court for decision afresh---Intra Court Appeal was allowed, in circumstances. AIR 1957 Patna 712; AIR 1956 Rajhastan 129; AIR 1966 Madhya Pradesh 177; AIR 1959 Bombay 549; AIR 1963 Andhra Pradesh 28; AIR 1958 Madras 420; AIR 1978 Madras 91; AIR 1938 Madras 205; Director Housing, A.G's Branch, Rawalpindi v. Messrs Makhdum Consultants Engineers and Architects 1997 SCMR 988; Muhammad Hanif v. Eckhard and Co. Marine GMBH and 2 others PLD 1983 Kar. 613; 2002 CLD 671; 2009 MLD 1396; WAPDA v. Naeem Trading Co. 1982 CLC 353; Abbasia Cooperative Bank's PLD 1997 SC 3; Abid Jan v. Ministry of Defence 2023 SCMR 1451; PLD 2018 SC 40; PLD 2002 SC 1111; 1994 SCMR 1555 and 1982 SCMR 494 ref. Ghulam Muhammad Dars for Appellant. Aqib Hussain and Abdur Razzak for Respondent No.2. Date of hearing: 6th February, 2025.

Summary: (a) Civil Procedure Code (V of 1908) ---- S. 47 --- Arbitration Act (X of 1940), Ss. 8 & 17 --- Decree based on arbitral award --- Executing Court's jurisdiction --- Scope. The decree in question arose from an arbitral award rendered under Section 8 of the Arbitration Act, 1940 and made rule of court under Section 17. The decree directed the appellant, National Highway Authority (NHA), to pay the respondent a principal sum along with financing charges at a rate defined in clause 14.8 of the contract, calculated from a specific date until actual payment. The appellant contested the Executing Court’s direction to compute financing charges on a compound basis, asserting that such calculation exceeded the terms of the decree and that simple interest should apply. Held, where a decree is founded on an arbitral award, the Executing Court is bound to execute the decree in strict accordance with the award and cannot reframe or reinterpret the terms. The award, read as a whole, clearly referenced clause 14.8 of the contract, which mandated monthly compounding of financing charges. Thus, the Executing Court's interpretation did not alter the decree but rather enforced its express terms. Cited cases: Jajodia (Overseas) (Pvt.) Ltd. v. Industrial Development Corporation of Orissa Ltd. (1993 (2) SCC 106) Azad Government of the State of Jammu and Kashmir v. Muhammad Aslam Khan (1990 MLD 2333) Bhavan Vaja v. Solanki Hanuji Khodaji Mansang (AIR 1972 SC 1371) Topanmal Chhotamal v. M/s. Kundomal Gangaram (AIR 1960 SC 388) (b) Contract Act (IX of 1872) ---- Construction contracts --- Payment delays --- Entitlement to financing charges on compound basis under contractual terms. Under clause 14.8 of the contract, if payment is delayed beyond the period stipulated in clause 14.7, the contractor is entitled to receive financing charges compounded monthly at a rate three percentage points above the State Bank of Pakistan’s discount rate. Held, the arbitrator explicitly enforced clause 14.8 while awarding financing charges and did not deviate from the contract. Arguments suggesting application of simple interest were contrary to the award and to the clear language of the contractual clause. Arbitrators cannot re-write contracts; conversely, they must interpret and apply contractual provisions faithfully. Therefore, the use of compound interest was not only permitted but mandated under the contract, and was correctly upheld by the Executing Court. (c) Arbitration Act (X of 1940) ---- S. 29 --- Arbitrator’s power to award interest --- Scope and limitations. While Section 29 restricts arbitrators from awarding interest prior to a decree absent agreement between the parties, the present case fell within the exception due to clause 14.8 of the contract, which expressly provided for financing charges in the event of delayed payment. Held, this clause amounted to an implied agreement, thus validating the arbitrator’s award of compound interest from the date of default till actual payment. (d) Execution proceedings --- Payment by way of bank guarantee --- Effect on accrual of interest. Held, mere furnishing of a bank guarantee does not amount to actual payment within the meaning of a decree unless the amount is encashed and received by the decree holder. Interest or financing charges continue to accrue until such encashment. In the instant case, although NHA furnished a bank guarantee in September 2022, actual payment was not made until March 2023. Therefore, financing charges rightly continued to accumulate until the date of payment. Cited case: Syed Waqar-ul-Hassan Shah Bukhari v. Small Business Finance Corporation (2024 CLD 1481) (e) Evidence --- Reports from neutral banking institutions --- Evidentiary value in quantifying decretal amounts. The Executing Court sought independent calculations from HBL and JS Bank Ltd. regarding financing charges under clause 14.8. Held, the reports submitted by both institutions were consistent with each other and in conformity with the decree and the arbitral award, and thus formed a valid basis for directing the respondent to calculate the outstanding decretal amount accordingly. There was no legal infirmity in the Executing Court's reliance on such neutral expert evidence. (f) Decree execution --- Finality of arbitral award and decree --- Respondent’s entitlement to remaining decretal amount calculated on compound basis --- Validity. The appellant's plea that payment of Rs.103,424,206/- discharged the decree was based on an incorrect assumption of simple interest application. Held, the award and decree clearly required financing charges to be compounded monthly; the actual remaining amount, as of January 2024, was Rs.38,067,928/-, which continued to increase due to delay. The Executing Court's direction to provide accurate calculations based on clause 14.8 of the contract was legally sound, and the appeal against the said order was without merit. Disposition: Appeal dismissed. No costs.

Summary: (a) Arbitration Act, 1940----Award made rule of court----Enforcement and Execution ----Where an arbitral award is made rule of the court, it becomes enforceable as a decree of the court----Executing Court is bound to enforce the decree in its exact terms and cannot modify or alter the terms of the award as incorporated in the decree----Financing charges under an arbitral award must be calculated as per the terms of the contract and award, including the basis for compounding if specified. Cited Cases: • Azad Government of the State of Jammu and Kashmir v. Muhammad Aslam Khan (1990 MLD 2333) • Jajodia (Overseas) (Pvt.) Ltd. v. Industrial Development Corporation of Orissa Ltd. (1993 (2) SCC 106) (b) Arbitration----Financing Charges----Calculation Method ----Where the contract stipulates financing charges compounded monthly, the arbitrator and the executing court must enforce such compounding as per the contractual clause----Clause 14.8 of the contract provided for monthly compounding of financing charges at an annual rate above the State Bank of Pakistan's discount rate, and the award enforced this contractual right----Executing Court correctly directed calculation on compound basis in conformity with the contract and award. (c) Executing Court----Jurisdiction----Scope of Powers ----Executing Court has no power to go behind the decree or alter its terms----Court’s role is limited to executing the decree in its literal terms, including the calculation of financing charges as directed by the award and decree----Contention that financing charges should be on a simple interest basis was rejected as contrary to the award’s terms. (d) Arbitration Act, 1940----Section 29----Interest Prior to Decree ----Section 29 of the Arbitration Act, 1940 restricts arbitrators from awarding interest prior to the decree unless expressly or impliedly agreed by the parties----Where a contract expressly provides for compound interest as financing charges for delayed payments, the arbitrator is bound to enforce this term in the award, and the court must uphold the same upon execution. (e) Decree Execution----Effect of Bank Guarantee on Accrual of Interest ----Furnishing of a bank guarantee does not discharge the principal amount unless actual payment is made to the decree-holder----Accrual of financing charges continues until the decretal amount is actually paid, not merely when a bank guarantee is provided. Cited Case: • Syed Waqar-ul-Hassan Shah Bukhari v. Small Business Finance Corporation (2024 CLD 1481) Disposition: Appeal dismissed. High Court upheld the order of the Executing Court directing calculation of financing charges on a compound basis as per the contractual clause 14.8 and the arbitral award. No costs awarded.

Summary: Arbitration Appeal: U/s 39 against order of court wherein wherein the award was declared barred by law and application for making rule of court was dismissed. (a) Arbitration Act, 1940 (the “1940 Act”) — Article 178 of the Limitation Act, 1908 — Applicability to Arbitrator’s Filing of Award: Under Article 178 of the Limitation Act, 1908, the limitation period of 90 days for filing an arbitration award applies only to applications filed by a party before the Court seeking a direction to the Arbitrator to file the award. The said limitation period does not apply where the Arbitrator files the award on his own or upon a party’s request. The Arbitrator is not under a statutory obligation to file the award within the limitation period prescribed in Article 178, nor does any limitation run against a party requesting the Arbitrator to file the award. (Muhammad Shafi v. Muhammad Sabir, PLD 1960 Lahore 591; Sindh Industrial Trading Estates v. Sindh Employees Social Security Institution, 1993 MLD 1258; Besrock (Pvt.) Ltd. v. Pakistan Steel Mills Corporation, 2013 CLD 719 applied). (b) Scope of Section 14(2) of the Arbitration Act, 1940 — Role of Arbitrator in Filing the Award: Under Section 14(2) of the 1940 Act, an Arbitrator may file the award in Court either at the request of a party or upon the Court’s direction. Where the Arbitrator files the award voluntarily, there is no requirement for an application from a party nor does any limitation period apply. (Champalal v. Mst. Samrathbai, AIR 1960 SC 629; Balwant Singh v. Partap Singh, AIR 1968 Punjab & Haryana 265 followed). (c) Effect of Erroneous Filing Before an Incompetent Court — Re-filing and Limitation Considerations: Where an Arbitrator files an award before a Court lacking pecuniary jurisdiction, and the award is returned for filing before the competent Court, the delay in re-filing does not render the award time-barred under Article 178. A bona fide mistake in filing before an incorrect forum does not nullify the arbitration proceedings. (Muhammad Hassan v. Muhammad Anwar, AIR 1968 Patna 82; Vaseem Construction Co. v. Province of Sindh, 1991 CLC 1081 applied). (d) Right of Appeal Under Section 39 of the 1940 Act — Maintainability of Appeal Against Order Holding Award “Barred by Law”: An appeal under Section 39 of the 1940 Act lies only against specific orders enumerated therein. An order declaring an arbitration award “barred by law” does not fall within the appealable categories under Section 39. However, where the Court’s decision effectively results in a refusal to exercise jurisdiction, a revision under Section 115 CPC is maintainable to correct such an illegality. (Capital Development Authority v. Khuda Bakhsh, 1994 SCMR 771; Muhammad Hanif v. Muhammad, PLD 1990 SC 859 followed). (e) Conversion of Appeal into Revision Petition — Powers of High Court to Correct Jurisdictional Errors: To prevent failure of justice and unnecessary litigation, the High Court converted the appeal into a revision petition under Section 115 CPC and set aside the order declaring the award time-barred. The case was remanded for a decision on merits regarding pending applications for making the award a rule of Court. (Oil and Gas Development Corporation v. Clough Engineering Ltd., 2003 YLR 353; Muhammad Ramzan v. Fatima, PLD 2004 Lahore 17 applied). ----Disposition: Appeal converted into Revision Petition — Impugned Order dated 28.11.2023 set aside — Matter remanded to the lower Court for decision on merits.

Summary: (a) Arbitration Act (X of 1940)--- ----Ss. 18 & 30---Contract Act (IX of 1872), S. 74---Award made rule of Court---Objection, dismissal of---Awarding of compensation---Appellant/Trading corporation of Pakistan was aggrieved of dismissal of its objections and being awarded only 50% of performance amount as compensation---Validity---Aggrieved party, under S. 74 of Contract Act, 1872 was still entitled to reasonable compensation for breach of contract, even if it could not prove actual damage or loss---This ensured that party at fault could not avoid liability simply because other party could not quantify the damage---Reasonable compensation should not exceed penalty---Compensation awarded should be reasonable and should not exceed the amount specified in contract or penalty stipulated---Aim is to prevent excessive or punitive penalty that are disproportionate to the breach---There was no basis for awarding 50% of performance amount to appellant/Corporation under S. 74 of Contract Act, 1872---When award was presented before Judge in Chambers of High Court, respondent/company did not raise any objection---After order in question and decree was passed by Judge in Chambers of High Court, respondent/company chose not to appeal against the same---Appellant/Corporation could not question award and order/decree---Division Bench of High Court declined to interfere in partial acceptance of award and its confirmation as rule of Court a the same showed no significant irregularities---Objections of appellant/Corporation did not demonstrate that Judge in Chambers of High Court either deviated from legal standards or misapplied judicial principles---Intra Court Appeal was dismissed in circumstances. Sadan General Trading LLC v. Trading Corporation of Pakistan PLD 2021 Sindh 57; PLD 2010 Peshawar 34; 1997 SCMR 66; 2006 YLR 589; 2002 CLD 61; 1991 MLD 422; 1982 SCMR 244; PLD 2011 SC 506; 2023 SCMR 1103; 2018 SCMR 662; 2023 SCMR 1103; PLD 2006 SC 169; PLD 2003 SC 301; PLD 1969 SC 80; PLD 1971 SC 743; PLD 1987 SC 461; 1981 CLC 311 and 1984 SCMR 597 ref. (b) Damages--- ----Maxim "in jure non remota causa sed proxima spectatur"---Connotation---In law, the immediate, not the remote cause, is regarded---As such the maxim substantiates precept that law concentrates on proximate cause of loss or damage when adjudicating compensation, ensuring that an aggrieved party is entitled to reasonable compensation, notwithstanding absence of proven actual damage or loss. Rafiq Ahmed Kalwar and Muhammad Yasir for Appellant. Muneer Iqbal and Ibrahim Tahir Siddiqui for Respondent No.1. Qazi Abdul Hameed Siddiqui, DAG and Syed Raza Mamnoon for Respondents. Dates of hearing: 18th and 25th September, 2024.

Summary: Arbitration Act (X of 1940)--- ----Ss. 17 & 30---Arbitral award----Interference by High Court in appellate jurisdiction---Scope---Different claim of damages---Determining criteria---Arbitration proceedings---Announcement of award---Single Judge made the award rule of the court---Objections were raised by the appellant qua award of general damages---Validity---Arbitrator had set out the grounds for rejection and denial of claims and rejected eight (8) out of thirteen (13) claims filed by the respondent based on the evidence brought on record---Where an arbitrator awards general damages, the absence of documentary evidence for the assessment of such damages does not automatically warrant setting aside the award---General damages are distinct from special damages, which require proof of actual losses---Courts may invoke the "rule of thumb" to award general damages where legal rights have been violated, and there is no precise yardstick for assessment, provided the determination satisfies the conscience of the court based on the facts and circumstances of the case---Division Bench of High Court had not found any "legal misconduct" or "moral misconduct" on part of the Arbitrator---Appellant (NTC) had not made out a case to identify precisely where the arbitrator had travelled beyond his jurisdiction---Division Bench of High Court could have considered setting aside the award if there was any error, factual or legal, which floated on the surface of the award, but appellant had failed to make such demonstration before it---No irregularity or perversity was found in the judgment passed by the Single Judge, making the arbitral award a rule of the court---High Court Appeal was dismissed, in circumstances. Abdul Majeed Khan v. Tawseen Abdul Haleem 2012 CLD 6; Sufi Muhammad Ishaque v. The Metropolitan Corporation, Lahore PLD 1996 SC 737; Injum Aqeel v. Latif Muhammad Chaudhry and others 2023 SCMR 1361 and Gerry's International (Pvt.) Ltd. v. Aeroflot Russian International Airlines 2018 SCMR 662 rel. Gazain Z. Magsi for Appellant. Nemo for Respondent. Date of hearing: 1st November, 2024.

Summary: (a) Arbitration Act, 1940: ---- Section 34—Referral to arbitration—Jurisdiction of parties to enforce arbitration agreements The petitioners invoked an arbitration clause in an agreement to seek a stay on proceedings under the Companies Act, 2017, regarding the alleged fraudulent transfer of shares. The Lahore High Court dismissed the petitioners’ application, reasoning that one petitioner, not a party to the arbitration agreement, could not enforce the clause. The Supreme Court found this reasoning unsustainable, holding that the nominee derived rights and obligations under the agreement through the signatory party, and was therefore bound by the arbitration clause. Upholding the principle of party autonomy and a pro-arbitration approach, the Court referred the dispute to arbitration, directing proceedings before a mutually acceptable Arbitrator. ----Cited Cases: Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd. [1993] AC 334 Brother Steel Mills v. Ilyas Miraj PLD 1996 SC 543 Abdul Qayyum v. Government of Punjab PLJ 2003 SC 608 (b) Companies Act, 2017: ---- Section 126—Rectification of register of members—Jurisdiction of the Company Bench The dispute regarding the fraudulent transfer of shares and rectification of the register of members was held to fall exclusively within the jurisdiction of the Company Bench of the High Court, established under Section 5 of the Companies Act, 2017. The Supreme Court ruled that the Company Bench qualifies as a civil court of special jurisdiction under Section 2(c) of the Arbitration Act, permitting it to oversee arbitral awards related to corporate disputes. The decision underscores the compatibility of arbitration proceedings with specialized courts under the Companies Act. (c) Arbitration Act, 1940—Civil Court jurisdiction: ---- Section 2(c)—Definition of “Civil Court” includes courts of special jurisdiction The Supreme Court clarified that “Civil Court” under Section 2(c) of the Arbitration Act encompasses both general and special jurisdiction courts, including the Company Bench under the Companies Act. A restrictive interpretation would undermine legislative intent and limit the application of the Arbitration Act. Arbitration awards related to disputes within the jurisdiction of specialized civil courts can appropriately be filed in those courts. (d) Arbitration as a preferred dispute resolution mechanism: ---- Pro-arbitration bias—Economic and judicial benefits The judgment reaffirms a pro-arbitration bias, emphasizing arbitration as a cost-effective, efficient, and confidential mechanism to alleviate the overburdened judicial system and promote business confidence. The Court highlighted the necessity for modern arbitration legislation and called upon the Federal Government to enact the draft Arbitration Act submitted by the Law and Justice Commission of Pakistan to modernize the outdated framework. -----Disposition: The Supreme Court converted the petition into an appeal, allowed it, and set aside the High Court’s decision. The dispute was referred to arbitration, appointing Mr. Justice (R) Maqbool Baqar as the Arbitrator. The Award made by the Arbitrator is to be filed before the Company Bench for further proceedings under the Arbitration Act.

Summary: Recognition and Enforcement (Arbitral Agreement and Foreign Arbitral Awards) Act, 2011 – Article V(1)(d) of the New York Convention – Enforcement of awards refused due to violation of agreed arbitral procedure. Recognition and enforcement of arbitral awards rendered by the DIFC-LCIA tribunal were refused on the grounds that the composition of the arbitral tribunal and arbitral procedure were not in accordance with the agreement of the parties. The parties had agreed on Dubai (mainland UAE) as the seat of arbitration, whereas the proceedings were conducted in DIFC, a distinct jurisdiction with separate laws, in contravention of the arbitration agreement. (See: ST Group Co. Ltd. v. Sanum Investments Ltd. [2019] SGCA 65, Dallah Real Estate v. Ministry of Religious Affairs, Pakistan [2010] UKSC 46) ------- 2. Arbitration agreement – Significance of seat of arbitration – Distinction between DIFC and Dubai mainland emphasized. The court reiterated that the seat of arbitration is a fundamental element that determines the curial law and supervisory jurisdiction. The agreement between SpaceCom International LLC and Wateen Telecom Limited explicitly provided for Dubai (mainland UAE) as the seat, with procedural rules of the Dubai International Financial Centre (DIFC) Arbitration Centre. The DIFC's assumption of jurisdiction was deemed inconsistent with the parties' agreement. (See: Enka v. Chubb [2020] UKSC 38, Russell on Arbitration (21st Edition)) ------- 3. Party autonomy – Primacy in arbitration agreements under Article V(1)(d) of the New York Convention. Courts are bound to give primacy to party autonomy in determining the arbitral procedure, including the seat of arbitration. Any deviation from the agreed procedure constitutes a fundamental defect, warranting refusal of recognition and enforcement under Article V(1)(d) of the New York Convention. (See: Polimaster Ltd. v. RAE Systems, Inc., 623 F.3d 832 (9th Cir. 2010), Louis Dreyfus Commodities Suisse SA v. Acro Textile Mills Limited (PLD 2018 Lahore 597)) ------- 4. Tribunal’s jurisdiction – DIFC court’s decision not binding for enforcement. The court held that the DIFC tribunal’s reliance on the DIFC court’s decisions as res judicata regarding jurisdiction was flawed. The tribunal should have independently assessed its jurisdiction rather than deferring to a decision made ex parte, particularly when the agreement explicitly selected Dubai as the seat of arbitration. (See: Dallah Real Estate v. Ministry of Religious Affairs, Pakistan [2010] UKSC 46) ------- 5. Contra proferentem rule – Inapplicability in agreements between sophisticated commercial parties. The court dismissed SpaceCom's reliance on the contra proferentem rule, finding no ambiguity in the arbitration agreement regarding the seat of arbitration. The rule does not apply in contracts negotiated between parties of equal bargaining power and sophistication. (See: Persimmon Homes Ltd. v. Ove Arup & Partners Ltd. [2017] EWCA Civ 373) ------- 6. Public policy – Enforcement refused in line with party autonomy and procedural integrity. Enforcement of the awards was refused under Article V(2)(b) of the New York Convention, as conducting arbitration in DIFC instead of Dubai undermined the procedural integrity and party autonomy enshrined in the arbitration agreement. (See: UNCITRAL Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 2016) ------- Outcome: The court dismissed SpaceCom's application for recognition and enforcement of arbitral awards with costs, holding that the arbitration proceedings deviated from the agreed seat of arbitration (Dubai mainland) and thereby violated the New York Convention's provisions. Application dismissed.

Summary: Background: The case involves a dispute between two companies engaged in oil and gas exploration over the enforcement of arbitration agreements and the recognition of foreign arbitral awards under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 (“2011 Act”). One party sought to enforce arbitration clauses requiring disputes to be settled through foreign-seated arbitration (London), governed by English law, following alleged breaches in agreements related to petroleum concession interests. -----Issues: 1- Whether the foreign-seated arbitration clause is enforceable for two domestic parties under the 2011 Act. ----2- Whether the Civil Court had jurisdiction over the dispute, given the arbitration agreements specifying arbitration at the London Court of International Arbitration (LCIA). ----3- Validity of the interim orders and enforcement petitions filed for the arbitral awards in Pakistan. -----Holding/Reasoning/Outcome: The court upheld the arbitration agreement, emphasizing that party autonomy allows domestic parties to opt for a foreign seat of arbitration if agreed upon voluntarily. The court reaffirmed that Pakistani law does not bar domestic entities from resolving disputes in a foreign forum. The High Court, rather than the Civil Court, was deemed the proper forum under the 2011 Act, given that only the High Court holds exclusive jurisdiction over matters arising from foreign arbitration agreements. The court dismissed objections to the arbitral awards' enforceability, recognizing the awards and rejecting the claim that enforcement would contravene public policy or Pakistani law. -----Citations/Precedents: Global Quality Foods (Pvt.) Ltd. vs. Hardee’s Food Systems, Inc. (PLD 2016 Sindh 169) CGM (COMPAGNIE GENERAL MARITIME) vs. Hussain Akbar (2002 CLD 1528) Jes & Ben Groupo (Pvt.) Limited vs. Hell Energy (2019 SCC Online Delhi 10225) Bremem vs. Zapata Off–Shore Co. (407 U.S. 1 (1972)) Atlas Export Industries vs. Kotak & Company (AIR 1999 SC 3286)