Arbitration for Companies in Pakistan: A Simple Guide

Table of Contents

1. Introduction
2. Petition for Arbitration Referral
3. Filing Arbitration Award Before the Company Bench
4. What Does “court” Mean Under the Arbitration Act?
5. Civil Court Jurisdiction in Arbitration
6. Why Include Specialized Courts?
7. How This Case Affects You
8. Conclusion

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1. Introduction

• Arbitration: An alternative to court trials for quicker dispute resolution.
• The Arbitration Act, 1940: Governs arbitration proceedings in Pakistan.
• A recent case asked if specialized courts, like the Company Bench, count as “civil courts” under the Arbitration Act.

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2. Petition for Arbitration Referral

• The petitioners asked the court to send the case to arbitration under Section 34.
• They wanted a retired judge to handle it.
• Court’s decision:
  • Denied the request.
  • Reason: One party, Sameen Naeem Rana, was not part of the arbitration agreement.
  • Arbitration couldn’t proceed without him.

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3. Filing Arbitration Award Before the Company Bench

• Petitioners wanted to file the arbitration award with the company bench.
• Claim: Both parties agreed on this jurisdiction.
• Court’s decision:
  • Disagreed.
  • Reason: Jurisdiction is defined by law, not mutual agreement.

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4. What does “court” mean under the Arbitration Act?

• Section 2 of the Arbitration Act defines “court” as a Civil Court.
• Exclusion: Small Cause Courts are excluded, except for specific cases (Section 21).
• Key question:
  • Does “Civil Court” include specialized courts like the Company Bench?
  • Specialized courts handle corporate disputes.

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5. Civil Court Jurisdiction in Arbitration

• The court-ruled civil court includes both general and specialized courts.
• Reason:
  • Specialized courts deal with civil matters.
  • Including them aligns with the purpose of the Arbitration Act.
• This ensures arbitration applies to all civil disputes, not just general courts.

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6. Why Include Specialized Courts?

• Specialized courts like the Company Bench focus on specific legal matters (e.g., corporate law).
• Benefits:
  • These courts are equipped to handle complex disputes.
  • Including them in the arbitration process ensures flexibility.
  • It helps businesses resolve disputes efficiently, especially in corporate settings.

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7. How This Case Affects You

• Jurisdiction is key. Understand which courts handle your arbitration.
• Specialized courts like the Company Bench can manage arbitration in company matters.
• If you own a business or are involved in a corporate dispute:
  • Know that your case could fall under the specialized court’s jurisdiction.
  • The Arbitration Act will still apply.
• Understanding the rules helps you make informed decisions and avoid complications.

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8. Conclusion

• The case confirms that specialized courts like the Company Bench are “civil courts” under the Arbitration Act, 1940.
• This interpretation ensures that arbitration applies to all civil disputes, including corporate cases.
• Key takeaway: Know how jurisdiction works under the Arbitration Act to navigate the process efficiently.

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For legal assistance or help with arbitration and other matters, contact Muhammad Amin, Advocate.

Phone number: 0313 9708019