Perspectives in Light of the Lahore High Court Judgment 2025 LHC 1247

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THE AUTHOR:
Wasif Majeed, LL.M., MCIArb, Partner at Lexium Attorneys at Law

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Introduction

Arbitration is a private and consensual dispute resolution mechanism governed in Pakistan by the Arbitration Act, 1940 (hereinafter “the Act”). One question that has scarcely been answered in Pakistan’s legal jurisprudence is whether multiple arbitration agreements in separate but related contracts can be jointly enforced or consolidated through a single arbitral reference or proceeding. The recent judgment rendered by Honourable Justice Anwaar Hussain, of the Lahore High Court, in M/s Taiga Apparel (Pvt) Ltd. v. M/s International Fabrication Company (2025 LHC 1247) lays down the latest jurisprudence on this subject.

Facts of the Case

The dispute in Taiga Apparel arose out of two construction contracts executed between the same parties: one dated 23.04.2014 (covering the Ground, Mezzanine, and First Floor) and another dated 08.11.2015 (covering the Second Floor of the same factory building). Both contracts had arbitration clauses with nearly identical wording, providing for a three-tier process: mutual appointment of a sole arbitrator, failing which each party would appoint one arbitrator, and in the event of a disagreement, an umpire would be appointed.

Disputes over payment led the respondent to invoke arbitration by sending a notice referencing both agreements. The respondent then filed a single application under Sections 8 and 20 of the Act before the Civil Court, Lahore, which dismissed it holding that arbitration must first proceed as per the agreement(s). The Appellate Court reversed the dismissal, ordering the appointment of an arbitrator. Thereafter, a civil revision was filed by Taiga Apparel before the Honourable Lahore High Court, which set aside the appellate decision, providing a well-reasoned exposition on the joinder issue.

The Legal Issues

Three principal legal questions were framed and answered by the High Court:

1. Whether a single application under Sections 8 & 20 of the Act was maintainable for disputes under two separate agreements, each having an independent arbitration clause;
2. Whether the arbitration mechanism provided in the contracts was properly exhausted before judicial intervention was sought;
3. Whether the proper provision for court appointment of arbitrators was Section 8 or Section 9 of the Act.

Joinder of Arbitrations: The “Indivisible Whole” Doctrine

The Court reaffirmed the principle that joinder of arbitrations is only permissible where multiple contracts are so interlinked and interdependent that they constitute an “indivisible whole”, and the parties intended a unified dispute resolution mechanism.
Relying on Orient Power Company (Pvt.) Ltd. v. SNGPL (2021 SCMR 1728) and Sezai Turkes Feyzi Akkaya Construction Company v. Crescent Services (1997 SCMR 1928), the Court reiterated that Pakistani law recognizes composite arbitration only when:

1. The agreements are interlinked in performance;
2. One agreement references or incorporates the arbitration clause of another; and
3. The arbitration clauses, read harmoniously, support a unified arbitral proceeding.

To fortify the reasoning in light of the Indian jurisprudence,  the Lahore High Court referred to Duro Felguera S.A. v. Gangavaram Port Ltd. (AIR 2017 SC 5070), where the Indian Supreme Court denied composite arbitration despite similar parties and subject matter, emphasizing the sanctity of distinct arbitration clauses.

The Procedural Distinction between Section 8 and Section 9 of the Act

The Taiga judgment draws a crucial distinction between Section 8 (appointment of an arbitrator by mutual consent) and Section 9 (appointment by each party with a fallback to a sole arbitrator) of the Act. This is where the procedural fault of the respondent’s application was most evident. Since both arbitration clauses envisaged the possibility of two party-appointed arbitrators and an umpire, the Lahore High Court held that the appropriate recourse lay under Section 9 and not Section 8 of the Act. The Lahore High Court held that the respondent, having failed to appoint its arbitrator after mutual appointment failed, prematurely sought court intervention.

Court’s Role in the Cases of Disconnected Arbitration Clauses

The High Court emphasized an often overlooked consequence of forcing a joinder: it rewrites the contract, which courts must desist under the Act. This principle has long been embedded in Pakistani case law and was reaffirmed in Taiga.
The Lahore High Court also referred to the Indian jurisprudence on this issue. It referred to Libra Automotives v. BMW India (2019 (176) DRJ 976), where the Delhi High Court held that even if agreements are commercially interlinked, different arbitration forums and procedures must be respected, unless expressly agreed otherwise. The Lahore High Court endorsed this logic, adding that joinder would risk conflicting arbitral awards and undermine party autonomy.

Conclusion

The Lahore High Court’s judgment in Taiga Apparel clarifies the limited scope of joinder of arbitrations under the Arbitration Act, 1940. It underscores the contractual nature of arbitration and enforces judicial discipline against premature or procedurally flawed applications. Most importantly, it protects party autonomy by ensuring that arbitration proceeds in strict accordance with the mechanisms the parties themselves agreed to.

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ABOUT THE AUTHOR

Wasif Majeed is an advocate admitted to practice in the Supreme Court and High Courts of Pakistan. He is a Partner (Dispute Resolution) at Lexium Attorneys-at-Law, Pakistan. His qualifications include an LL.M. in International Dispute Resolution from the University of London. His areas of expertise include international trade law, banking and commercial law, and intellectual property law.
Mr. Majeed is a member of the Chartered Institute of Arbitrators (CIArb), UK, and an accredited mediator of the CEDR. He currently serves as the ICC YAAF Regional Representative for Pakistan. He also serves as the Chair of Education and Training at the Chartered Institute of Arbitrators, Pakistan Branch.

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*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.