ORDER SHEET

IN THE HIGH COURT OF SINDH AT KARACHI

PRESENT:

Mr. Justice Aqeel Ahmed Abbasi

Justice Mrs. Rashida Asad

H.C.A. No.87 of 2020

________________________________________________________________ Date Order with signature of Judge

________________________________________________________________

Hearing / Priority Case:

1. For hearing of main case.

2. For hearing of CMA No.781/2020 (Stay).

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12^th April 2021

Mr. Kashif Sarwar Paracha, Deputy Attorney General for Appellant alongwith Mr. Aminullah Siddiqui, Asst. Attorney General and Tajdar Khan Deputy Secretary of Appellant.

Mr. Haider Waheed, Advocate for Respondent.

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O R D E R

Instant High Court Appeal arises against an order dated 17.02.2020 passed by the learned Single Judge, original side of this Court, in Suit No.1105 of 2019 on the application bearing CMA No.1960/2020 filed by the respondent under Section 41 of the Arbitration Act, 1940 read with the Second Schedule thereto, read with Order XXXIX Rules 1&2 CPC read with Sections 94 and 151 of C.P.C, whereby, the entire suit has been disposed of alongwith listed application with the direction that the arbitration proceedings to ensue in accordance with Article 28, preferably, within thirty days, however, till that date, no third party interest be created in respect of the Blocks (subject matter of that suit).

2. Learned Deputy Attorney General appearing for the appellant has vehemently argued that the aforesaid order has been passed without notice to the respondent, whereas, Asst. Attorney General representing the Federation was not authorized to concede for the grant of the listed application (CMA No.1960/2020). It has been further contended by the learned DAG that under the relevant rules of business, a Law Officer cannot give any concession without instructions of the parties. According to the learned DAG, since C.M.A. No.1960/2020 was fixed for order, therefore, a notice was required to be issued to the appellant for proper reply and rebuttal, however, instead of issuing any notice, impugned order has been passed without touching the merits of the case merely on the proposal of the Asst. Attorney General for referring the matter to the arbitration pursuant to Article 28 of the Agreement executed between the parties. Learned DAG has further argued that even the suit filed by the respondent is not maintainable, as it is time barred, whereas, license granted to the respondent was cancelled on account of default and violation of the terms of the License Agreement. Per D.A.G, after expiry of the cancellation of License, respondent could not file the aforesaid suit and at best conceded damages, whereas, in the instant case for violating the terms of the License Agreement, respondent is under legal obligation to compensate the appellant for the losses. It has been further contended by the learned DAG that the Government intend to execute afresh License Agreement of the subject blocks with the foreign Government for exploration of oil and gas and substantial development has already been made in this regard, whereas, respondent has miserably failed to perform their part of contract during last several years. It has been prayed by the learned DAG that the impugned order may be set aside.

3. Conversely, learned counsel for the respondent has raised an objection with regard to the maintainability of instant appeal on the ground that since the impugned order has been passed by consent of the parties, therefore, no appeal lies against consent order. It has been further contended by the learned counsel for respondent that license of the respondent has been illegally cancelled, whereas, in view of the arbitration clauses available in the agreement executed between the parties the matter was required to be referred to the arbitration in terms of Article 28 of such agreement. However, according to the learned counsel for respondent, since the appellant was bent upon to dispossess the respondent from the subject Block and had already cancelled their license, therefore, respondent was constrained to file the subject suit under section 20 of the Arbitration Act, 1940 with the prayer to appoint the Sole Arbitrator to adjudicate upon the issues between the parties and further to grant status-quo and to refrain the appellant from creating any third party interest in the Baran Block till final adjudication of the dispute by the Sole Arbitrator. It has been prayed by the learned counsel for respondent that instant High Court Appeal having no merits and may be dismissed.

4. We have heard the learned counsel for the parties, perused the record with their able assistance and have also examined the relevant clauses of the agreement executed between the parties.

5. During the course of hearing of the instant appeal, it transpires that before filing subject application (C.M.A. No.1960/2020), one application (C.M.A. No.8733/2019) was already filed by the respondent seeking injunctive order of similar nature, however, through impugned order, such application has been dismissed as not pressed, whereas, respondent chosen to file another application (C.M.A. No.1960/2020) under Section 41 of the Arbitration Act, 1940 read with the Second Schedule thereto, read with Order XXXIX Rules 1&2 CPC read with Sections 94 and 151 of C.P.C. with the prayer that the appellant may be restrained from awarding Baran Exploration Block 2667-12 to polish oil and gas company or to any other interested concern till the decision of the matters agitated in the instant suit through arbitration or otherwise. Without commenting on the merits of the case, we are of the view that an application fixed for order, seeking substantial relief to the extent of disposal of the suit itself, could not have been decided in such a hasty manner, particularly without notice to the relevant parties in the instant suit i.e. Federation of Pakistan and the Director General of Petroleum Concessions, merely on the basis of some proposed disposal of the matter by the Asst. Attorney General, who was not claimed copy and had not gone to the contents of the application.

6. In view of hereinabove facts and circumstances of instant case, we are of the opinion that the impugned order lacks reasoning, as there is no discussion on the merits of the case or even on the application, which was filed in the instant matter. Accordingly, the impugned order is hereby set aside and the Suit No.1105/2019 is restored to its original position and number and the matter is remanded back to the learned Single Judge, original side of this Court, for deciding the application (CMA No.1960/2020) afresh after notice to all concerned. Learned counsel for the parties are directed to proceed with the aforesaid application on 26^th April 2021. Parties are directed to approach the learned Single Judge, on the original side, and proceed with the aforesaid application. Whereas, it is expected that the aforesaid application may be decided, preferably, within a period of fifteen (15) days; provided that no adjournment on any ground whatsoever will be sought by any of the counsel representing the parties. However, till decision of the aforesaid application, parties are directed to maintain status quo.

J U D G E

Farhan-PS