SGEC-AMC J vs NATIONAL HIGHWAY AUTHORITY S — 2024 CLD 301 ISLAMABAD

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SGEC-AMC J VS NATIONAL HIGHWAY AUTHORITY S. 34---Stay of proceedings---Object, purpose and scope---Provision of S. 34 of Arbitration Act, 1940, has been enacted to make arbitration agreements effective and prevent a party from going to Court contrary to his/its own agreement---Where parties have agreed to refer disputes to arbitration, Court should as far as possible give an opportunity for resolution of disputes through arbitration rather than by judicial adjudication---Powers vested in Court to grant stay under S. 34 of Arbitration Act, 1940, are entirely a matter of discretion of Court---Courts must not ignore to see that parties are held to their bargain and promote sanctity of contracts/agreements---Stay of proceedings in a suit is a more expedient and proper course to follow where there is arbitration clause in agreement/contract---When application under S. 34 of Arbitration Act, 1940, is filed in pending suit, further progress/proceedings in such suit automatically comes to an end and Trial Court's power to act under Civil Procedure Code, 1908, is suspended till a decision is rendered on such application---Court has jurisdiction to entertain suit, however, Court in its discretion may stay the suit but Court has to consider whether discretion should be exercised in a particular case or not---Provision of S. 34 of Arbitration Act, 1940 does not make it obligatory on Court to necessarily refer dispute to arbitration and may exercise discretion to stay proceedings if it is satisfied that there is no sufficient reason why matter should not be referred to in accordance with the arbitration agreement---Arbitration agreement is a contractual undertaking by which parties agree to settle their dispute by way of arbitration rather than to proceed in Court---Whenever, any dispute or difference arises relating to and arising out of arbitration agreement, any party to the agreement may apply for staying of Court's proceedings by filing application under S. 34 of Arbitration Act, 1940---Party who wishes to refer disputes to arbitration has to apply without delay to Court for stay of proceedings particularly in breach of agreement to arbitrate dispute which arises between parties and falls within the scope of arbitration---Word "dispute" has got wide meaning and scope and includes any claim which other party admits under S. 34 of Arbitration Act, 1940---Court has ample powers to exercise its discretion to stay legal proceedings provided that there has been a valid arbitration agreement, proceedings in Court have been commenced, application is made by a party to the proceedings before filing written statement and or taking any other step in pending proceedings and such party is ready and willing to do all the acts necessary for the proper conduct of arbitration.

SGEC-AMC J vs NATIONAL HIGHWAY AUTHORITY S — 2024 CLD 301 ISLAMABAD

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