Commercial deals can’t be heard by multiple fora: LHC

RAWALPINDI: The Lahore High Court (LHC) Rawalpindi bench ruled on Monday that the commercial and banking-related agreements could not be challenged in multiple forums.

LHC Justice Jawad Hassan, while dismissing the petition of a private company against the First Habib Mudarba Ltd, held that financial matters in which the parties had agreed upon the jurisdiction, could not be taken up at a different court.

The nub of the matter is to examine the agreements having exclusive clauses related to the jurisdiction of the court settled between the parties.

While arguing the case, counsels for the parties have referred to various documents/agreements executed between the parties.

Samia Faiz Durrani, counsel for the bank, said that as per Clause 12, the parties had agreed that the courts at Karachi would have exclusive territorial jurisdiction to adjudicate any dispute or claim arising out of the agreement while the plaintiffs have filed this suit before the LHC which is liable to be returned.

Muhammad Imran Malik, counsel for the plaintiffs, relying on sanction letters of different dates executed at Rawalpindi, insisted that the LHC is the appropriate forum to take up the matter.

Justice Hassan noted that it is now a settled and recognised law in the country, that all commercial and banking contracts/agreements contain several “boilerplate clauses”, often seen as standard add-ons to the main terms and conditions of the contract.

Boilerplate clauses are standard contractual terms that are routinely included in many contracts.

One such “boilerplate clause”, the LHC order said, relates to jurisdiction and choice of law, and although these can be relatively straightforward when both parties are based in the same jurisdiction, they deserve proper consideration, particularly when the parties to the contract are based in different jurisdictions.

Published in Dawn, October 1st, 2024