Sindh High Court (SHC) has suspended arbitration proceeding between City District Government Karachi and a construction company till further orders. The interim order came on application of CGDK which filed suit for declaration and injunction for recovery of Rs 62,782,159 against M/s Iftikhar and Taha, a project management and construction company.
Plaintiff's counsel Qazi Khalid Ali submitted there was no arbitration clause in any of the document relating to the alleged dispute between plaintiff and the defendant. He said intention of CDGK was clear by its minutes of meeting on June 10, 2005 and the alleged dispute is to be settled in accordance with the contract.
The counsel said according to clause 12 and 12-A of the contract the dispute if any between principal and the contractor to be decided by the competent authority who in this case is Nazim of the CDGK.
He submitted that contrary to agreement, the matter has been referred to arbitrator fraudulently with the collusion and connivance of the contractor and some of the unscrupulous officials of the plaintiff against whom departmental action is in offing. He informed court that application before arbitrator has been made for stoppage of proceeding and the same has been questioned.
SHC's single bench comprising Justice Munib Ahmed Khan after hearing the arguments of CDGK's counsel observed contention needs consideration and issued notice to defendant. In meantime, the court ordered to suspend the proceedings before arbitrator till next date of hearing.