IN THE HON’BLE LAHORE HIGH COURT, LAHORE

FAO NO. ____ of 2017

M/s Mughals Pakistan (Pvt) Ltd, a company registered under the Companies Ordinance,
1984 acting through its duly authorized official namely Mr. Aamir Shafi Akram, and having
its office at Plot No. 57, Main Ghazi Road, Opposite Allama Iqbal Town Int’l Airport, Lahore

… Appellant

versus

1) M/s Pakistan Real Estate Investment & Management Company (Pvt) Limited
(PRIMACO), acting through its Chief Executive and having its registered office at 3rd Floor,
EOBI House (Former Awami Markaz), Shahrah-e-Faisal, Karachi, a wholly owned subsidiary
of Employees Old-Age Benefits Institution.

2) M/s Askari Bank Limited, acting through its President and having its registered office at
12-Tufal Road, Lahore Cantt.
… Respondent

FIRST APPEAL AGAINST ORDER DATED [•] PASSED BY LEARNED CIVIL

JUDGE IN [•]

Respectfully Sheweth:

That the Impugned Order deserves to be set aside inter alia on the following grounds:

1 That the court below has not exercised the jurisdiction vested in it for the grant of
interim relief as it was empowered to do so in terms of Section 41 of the Arbitration
Act, 1940 read with the Second Schedule, in particular Item No. 4 whereby it was fully
competent to issue interim injunction that was prayed for by the Petitioner.
2 That the court further failed to appreciate that in addition to the jurisdiction conferred
on it under Section 41(a) of Civil Procedure Code whereby it had powers to issue
injunction or grant an interim relief of staying the encashment of the Guarantee, it had
further been bestowed upon with additional jurisdiction and power under Section 41(b)
of the Arbitration Act enabling it to pass any interim injunction in the interest of justice
and equity free from the trappings of the criteria assumed for the grant of relief under
Order 39, Rule 1 and 2 of the CPC and thereby it had complete jurisdiction to grant the
interim relief prayed for without leaning on the misplaced ground of reparable loss.
3 That the court below has failed to appreciate that while considering request for interim
relief it is bound to follow the law laid down by the Hon’ble Supreme Court in terms
of Article 189 of the Constitution in respect of matters relating to guarantee’s
encashment during arbitration proceedings. In this regard, the court below has
completely ignored the law laid down in [•].
4 That the court below in the Impugned Order has further failed to appreciate that the
Guarantee is stately to be governed by the laws of Pakistan and that the law laid down
by the superior courts under Article 189 of the Constitution is the law that ought to
govern the adjudication relating to prevention of encashment of Guarantee as provided
for in [•] and by ignoring the same the court below has committed an error or
jurisdiction by not following the law wherein the text of the Guarantee governs its
obligations.
5 That the court below has also not appreciated that the Guarantee is conditional and the
conditions are provided for in the body and text of the Guarantee itself explicitly and
the conditions of the contract have been incorporated by reference which means that
till such time there is a default or deficiency attributable clearly to the contractor, the
Guarantee encashmenet does not arise and such an abrupt encashment constitutes a
flagrant violation of the conditions of contract and it is in that context that the petitioner
has moved for arbitration for monetary adjudication of the amounts adjusted or
outstanding against the Guarantee.
6 That further under the conditions of contract, the arbitration continuation does not
prevent – in principle – the contituation of project work which ought to continue and
that is the central spirit of this agreement. Meaning thereby that if call for encashment
demonstrates a dispute then the same has to be refereed to arbitration process under the
agreement yet the parties are to perform the project work and that too demands that the
Guarantee should not be encashed.
7 That the court below has also ignored the larger context in which the construction is
being done of a hotel premises which is a very viable project and guarantees extra-
ordinary return on pensioners’ investment on the project. Any delay or encashment will
eat into the pensioner’s savings or even re-tendering will further increase the cost of the
project and, therefore, there will be an irreparable loss to the Respondent No. 1 and its
shareholder i.e. EOBI whose mandate is to invest its money in profitable projects and
it is common knowledge that a 5-star hotel facility added to Lahore will be a very
profitable business. However, the encashment will delay the completion of the project
in these circumstances and therefore it needs to be prevented.
8 That the Petitioner encloses Annex [] which are colored pictures of the project which
is near completion. Its 16 storey structure has been completed by the Petitioner. Several
specimen rooms have been finalized for approval of the client – the photographs of the
same are also enclosed. Serena Hotel chain is headed by Prince Amin Karim Agha
Khan who visited the site and expressed satisfaction on both the quality of work.
Photographs of visit are enclosed as Annex []. In other words, substantial portion of the
work has already been completed by the Petitioner and if the Respondents ensure
release of early payments the remaining can be completed at an early date.
9 That it is pertinent to mention that in the Impugned Order, the learned court below has
also not appreciated that the Petitioner is a contractor of credible standing in Pakistan.
It has operations overseas and is currently working on the 11-storey UBL Building on
Jail Road, 16-storey hospital building for SIUT in Karachi. It is one of the very few
contractors that has patented rights for shuttering plates and has built some of the finest
projects in Pakistan including Serena Islamabad, University of Balochistan, 22-storey
building …. The Petitioner has also been awarded the ‘Distinguished Achievement
Award’ by the Institute of Architects Pakistan (IAP) and is listed as a ‘No-Limit
Contractor’ by the Pakistan Engineering Council (PEC). Over the last 49 years, the
Petitioner has worked in all the provinces of the country and has constructed industries,
colleges, hospitals, corporate buildings, hotels.
10 That the learned court below also needs to appreciate that the interim relief should have
been granted preventing encashment given in particular the directions of the Hon’ble
Supreme Court of Pakistan in C.P. No. 35 of 2013 wherein the counsel of EOBI himself
undertook to complete construction of the present project through the Petitioner.
Further, in another order of the Hon’ble Supreme Court directions were issued to
complete the projects so that the pensioners can eventually benefit.
11 That the court below also failed to appreciate that it is not merely a reparable loss of
money but also an irreparable loss of repute to the Petitioner’s standing.
12 That the Impugned Order also ignores that the irreparable loss is also in terms of the
delay of the project, the re-tendering costs and landing into hands of a far less credible
contractor who completes the project in a more expensive fashion without adhering to
quality standards.