Back in 2016, while I was working at a litigation law firm in Karachi, my boss assigned me a research project which involved research and analysis of issues related to challenging the validity of an arbitration agreement. While I was intrigued by the subject, I lacked extensive knowledge of the relevant issues. In order to acquaint myself with these issues, I started reading several text books, case law and articles to understand how arbitration works and the ways in which an invalid arbitration agreement could be challenged successfully.
At first sight, the decision of the Supreme Court may seem uninteresting as it upholds the
decisions of the Lahore High Court and merely rejects a somewhat desperate attempt to avoid
arbitration by the Appellants. However, it is a seminal decision in two respects. Firstly, it sets
out the law on Competence-Competence in clear terms which was previously not entirely
clear from the earlier jurisprudence as developed by the Pakistani Courts. Secondly, it deals
in depth with the law regarding Take or Pay clauses.
Pakistan’s recent Supreme Court judgment titled “Orient v SNGPL” is being widely hailed as a landmark judgment in the realm of international arbitration. It has deservedly generated a lot of excitement for its analysis of critical issues and enunciation of principles including kompetenz-komeptenz, incorporation of an arbitration clause in the case of multiple contracts and public policy as a guise for refusing enforcement of foreign arbitral awards.