Civil judge's decision set aside

The Lahore High Court (LHC) set aside a decision by a civil judge, saying arbitration could not be demanded after acceptance of a final settlement.
The court passed these orders in a petition filed by Managing Director Pak American Fertilisers Company Ltd (PAFCL) challenging the decision, allowing arbitration after final settlement with respondent M/s Industrial Fabrication Company on work awarded for equipment erection and above ground piping at PAFCL premises at Iskenderabad.
The petitioner contended that respondent company had submitted its final bill, which was found to be exaggerated and finally it was settled by the parties. The respondent after one and half year without referring to its letter alleged that undue deduction had been made and simultaneously demanded arbitration under clause 37.3.2 of the contract.
It was argued that not only such a demand violated clauses 37.1 and 37.1.1 of the general conditions of the contract but also abused existence of any dispute between the parties since the same had already been finally settled and a cheque in respect of equipment erection issued.