 
IN THE SUPREME COURT OF PAKISTAN 
( Appellate Jurisdiction ) 
 
 
PRESENT: 
MR. JUSTICE ANWAR ZAHEER JAMALI, HCJ. 
MR. JUSTICE AMIR HANI MUSLIM 
MR. JUSTICE UMAR ATA BANDIAL 
 
 
CIVIL PETITION NO.130 & 131 OF 2015 
(On appeal against the judgment dated 2.12.2014 passed by the 
Lahore High Court, Lahore, in Civil Revision No.2577/2014 
and FAO No.442/14 respectively) 
 
Pakistan Railways, thr. AGM(Traffic)  
… 
  …   Petitioner 
Pakistan Railways, Lahore 
(in both cases) 
 
 
 
 
 
VERSUS  
 
M/s Four Brothers International (Pvt)  
… 
  …     Respondents 
Ltd and others (in both cases) 
 
For the Petitioner    
: 
Sardar Muhammad Aslam, ASC 
(in both cases) 
For Respondent No.1 
: 
Mr. Aitzaz Ahsan, Sr. ASC 
(in both cases) 
 
 
Mr. M. S. Khattak, AOR 
Date of hearing 
 
: 
28-10-2015 
 
JUDGMENT 
 
 
AMIR HANI MUSLIM, J.- These Petitions are directed against 
the judgment dated 2.12.2014, passed by the Lahore High Court, Lahore, 
whereby Civil Revision and FAO filed by the Petitioner were dismissed.  
2. 
 
Facts necessary for the purpose of deciding these proceedings 
are that the Petitioner invited Expression of Interest from qualified parties by 
floating tender in the National Press, for plying Train between Lahore-
Karachi-Lahore on public-private partnership basis. The Respondent being 
the highest bidder was declared successful and awarded the contract. The 
C.Ps.No.130/15 etc.  
2
agreement between the Petitioner and Respondent No.1 was executed on 
18.8.2011, which was subsequently amended on 26.12.2011. The term of the 
agreement was initially fixed for a period of five years, on the terms and 
conditions enumerated in the agreement, extendable for another term of five 
years with mutual consent of the parties. As per the terms of agreement the 
train started its operation by 4.2.2012. Under Article 6.1 of the agreement 
the Business Train was scheduled to run between Lahore and Karachi Cantt. 
as agreed upon, and the Respondent No.1 was obliged to pay to the 
Petitioner a sum of Rs.1.573 million per single train journey calculated at 
88% capacity of luggage and passenger, normal business class fares for 
passengers and luggage.  The journey fare was required to be deposited by 
the Respondent No.1 before commencement of the train journey. It was 
further stipulated that any delay in payment of the agreed fare would entail 
additional penalty of 5% of the amount in case no amount is deposited till 
the 6th day, the Petitioner would be entitled to suspend the operation of the 
Train without any notice.  
3. 
 
It was further stipulated in the said article that the Respondent 
No.1 would invest a sum of Rs.225.786 million for value added services, 
which would be treated as performance guarantee/security and additional 
expenses incurred for value addition or uplifting in respect of the business 
train would be the sole responsibility and liability of the Respondent No.1 
which would, under no circumstances, be transferred to the Petitioner. Under 
Article 6.2 of the agreement, in case one or more passenger coaches are not 
available by the Petitioner, the Petitioner will not recover any amount equal 
to 88% of carrying capacity of the coaches and if additional coaches are 
C.Ps.No.130/15 etc.  
3
provided then the Respondent No.1 shall pay to the Appellant equal to 88% 
of the amount of carrying capacity of coaches.  
4. 
 
However, the Respondent No.1 inspite of depositing of 
Rs.225.736 million as performance guarantee, paid a sum of Rs.3.19 million 
before the commencement of the business, without justifiable reasons. The 
Respondent Company failed to own its commencement as per Article 6.1 of 
the agreement and on 10.2.2012, exactly after six days of commencement of 
business, approached the Ministry of Railways with the request to suspend 
operation of Article 6.1 of the agreement, undertaking to pay the outstanding 
amount within a period of six months. The Ministry of Railways through a 
summary dated 16.5.2012 referred the matter for change in the composition 
of business express to the Economic Coordination Committee [hereinafter 
referred to as “ECC”] in order to safeguard the interest of the Railways, 
which was stranger to the agreement. The ECC decided to determine the 
basis of award of contract and validity of personal agreement for sharing of 
revenue, by evaluation through a third party. The ECC appointed M/s 
Deloitte Pakistan as a consultant to make its recommendations, which 
submitted its following recommendations and the E.C.C in its meeting dated 
1.1.2013 approved them : - 
i. 
“Minimum occupancy to be achieved at 65% 
ii. 
Share ratio of gross revenue can be set as 80.20 between 
Pakistan Railways and Joint Venture Partners up to 
occupancy of 75% and, 
iii. For occupancy achieved above 75% the sharing ratio 
between PR and JV Partner can be set at 75.25.” 
5. 
 
In the light of the recommendations of M/s Deloitte Pakistan on 
3.7.2012 the ECC took the following decision : - 
C.Ps.No.130/15 etc.  
4
 
“The Economic Coordination Committee of the Cabinet 
considered the Summary dated 16th May, 2012, submitted by 
Ministry of Railways on “Changes in the Composition of Business 
Express” and decided to constitute a Committee, comprising 
Minister for Information & Broadcasting (Convener), Chairman 
Board of Investment, Deputy Chairman, Planning Commission and 
Secretary Ministry of Railways for further examining the matter 
and suggesting a viable course of action for Pakistan Railways. 
 
Ministry of Railways will also act as secretariat of the 
Committee.” 
 
6. 
 
On 17.12.2012, the Ministry of Railways floated another 
summary, proposing that the Respondent No.1 had defaulted to the extent of 
Rs.289.8 million and any dispensation granted to Respondent No.1 must be 
accompanied by a caveat with the understanding that the outstanding amount 
must be cleared within one year. This proposal contained in the summary 
was an interim arrangement, which was approved by the ECC and on 
15.3.2013 was endorsed by the Federal Cabinet. 
7. 
 
The Respondent No.1 failed to clear its outstanding dues in 
terms of the Cabinet decision. On 23.2.2013 the Respondent No.1 undertook 
to clear the outstanding amount of Rs.236,247,808/- in equal installments 
starting from July 1st, 2013 and concluding the entire amount within the 
stipulated period.  On 28.2.2013, the Ministry of Railways floated another 
summary to the ECC on which following decision was made, which was 
approved by the Government on 4.6.2013 : - 
“The Economic Coordination Committee of the Cabinet 
considered the Summary dated 28th February 2013, submitted by 
the Ministry of Railways on “Charges in the Composition of 
Business Express” and decided that the additional services 
provided to the passengers by the JV partner should not be part of 
ticket/fare and revenue be shared accordingly, with the condition 
that there is no downward revision in the actual fare.”  
 
8. 
 
On 17.9.2015, The Ministry of Railways moved yet another 
summary, stating that summary to review the earlier decisions, came under 
C.Ps.No.130/15 etc.  
5
discussion of the ECC on 17.6.2015, in which it was stated that matter needs 
reconsideration of ECC to the Cabinet and that the decision of ECC to the 
Cabinet dated 1.1.2013 may be re-visited and re-called abinitio, and save 
Pakistan Railways from recurring losses. After consideration of the 
summary, the ECC took the following decision:- 
“The Economic Coordination Committee of the Cabinet considered the 
summary dated 11th September, 2015, submitted by the Ministry of 
Railways regarding “Change in the Composition of Business Express 
Train”, endorsed the opinion of Ministry of Law, Justice and Human 
Rights contained in para-9 of the summary and approved the proposal 
contained in para 11 of the summary.” 
9. 
 
On 29.11.2013, the Petitioner required the Respondent No.1 to 
resolve the issue but the Respondent No.1 approached the Civil Court under 
Section 20 of the Arbitration Act for appointment of an independent 
Arbitrator and to refer the dispute to him with the following prayer 
alongwith an Application for interim relief  : - 
a. 
The agreement dated 18.08.2011 along with the Addendum 
dated 26.12.2011 be filed in this learned Court. 
b. 
This application may kindly be allowed and the matter be 
referred for Arbitration under the terms of the Agreement for 
adjudication on merits.  
c. 
Adjudication be completed within a period of four months 
and award be filed in this learned Court. 
Any other relief as deemed appropriate in the circumstances of the 
case may also be granted in favour of the Plaintiff and against the 
Defendants.” 
10. 
 
By order dated 24.4.2014, the Civil Judge, Ist Class Lahore, 
allowed the Application and directed the parties to provide names of their 
respective Arbitrators. The Civil Judge also allowed the Application of the 
Respondent No.1 under Section 41(b) of the Arbitration Act, granting 
injunction from recovery of the amounts from them.  
C.Ps.No.130/15 etc.  
6
11. 
 
Feeling aggrieved, the Petitioner filed Civil Revision against 
the order of allowing the Application of the Respondent No.1 under Section 
20 of the Arbitration Act and F.A.O against the grant of interim injunction. 
which were dismissed, by the Lahore High Court, Lahore, vide impugned 
judgment dated 02.12.2014. Hence these Petitions for leave to Appeal.  
 
12. 
 
The learned Counsel for the Petitioner has contended that he 
will not be pressing his Petition against the appointment of the Arbitrators, 
as he has been instructed to contest the Petition against the grant of interim 
injunction, allowing the Application of the Respondent No.1 under Section 
41(b) of the Arbitration Act. The learned Counsel next contended that the 
Respondent No.1 has neither paid the amounts in terms of the contract nor 
invested the agreed amount contained in the contract. He contended that the 
Respondent No.1 was put to notice for payment of the agreed amount under 
the terms of the contract besides the investment they had to make and the 
matter was referred to the E.C.C, for decision which allowed the interim 
arrangement under which the contract amount was reduced from 88% 
capacity of luggage and passengers to 65%. The Respondent No.1 had 
defaulted in payment of such amounts and inspite of the undertaking given 
by them that they would clear the outstanding amount within one year. In the 
intervening period, the Respondent No.1 approached the Civil Court which 
had directed the parties to take up the dispute to the Arbitrators appointed by 
each one of them. Additionally, the Civil Court restrained the Petitioner 
from recovery of the amounts and presently the Respondent No.1 has to pay 
a huge sum of Rs.1,11,55,00,000/-, outstanding against them while they are 
playing the train and availing all the benefits under the contract.  
C.Ps.No.130/15 etc.  
7
 
13. 
 
The learned Counsel submits that on one hand, the Petitioner 
has been restrained from recovery of the outstanding amount and on the 
other hand the dispute has been referred to Arbitration. He contended that 
neither the Civil Court nor the High Court has applied their minds to the 
facts of the case while granting injunction against the Petitioner. The 
principles for grant of injunction have been completely overlooked by the 
learned High Court and the Court below while passing the impugned order. 
The reasons for grant of injunction were neither assigned nor discussed 
either by the learned High Court or by the Civil Court. He next contended 
that grant of injunction is causing recurring financial losses to the Petitioner 
– a National Asset.  
 
14. 
 
As against this, the learned Counsel for the Respondent No.1 
has contended that the contract was assumption based and under Article 6.1 
of the contract the Respondent No.1 had to pay 88% of carrying capacity of 
the train whereas the actual occupancy was 60 to 65%, therefore, the 
Respondent No.1 was not obliged to make payment in excess of the said 60-
65% of the carrying capacity of the passengers and luggage. He next 
contended that it has been pointed out in the report of M/s Deloittee Pakistan 
that contractual payment to Pakistan Railways at the rate of 88% of the full 
capacity revenue of the train was a major contributor to the deficit. The 
learned Counsel further submits that the High Court as well as the Civil 
Court had rightly allowed the Application of the Respondent No.1 while 
taking into account the language of clause 5(vi) addendums to the 
agreement, which restricts the parties from suspending the operation of the 
Business Train.  
C.Ps.No.130/15 etc.  
8
 
15. 
 
He next contended that the Respondent No.1 has paid excess 
amount to the Petitioner on the basis of report of M/s Deloittee Pakistan, as 
the amount agreed upon by the Respondent No.1 was assumption based. He 
submitted that the Respondent No.1 has also made huge investments for 
operating the Business Train and their investment should also be saved.  
 
16. 
 
We have heard the learned Counsel for the parties and have 
perused the record. In the first place, we are not persuaded by the contention 
of the learned Counsel for the Respondent No.1 that the contract between the 
parties was assumption based and the Respondent No.1 was not obliged to 
pay the amounts agreed by them in terms of the contract. If the Respondent 
No.1 had made financial commitments, they are bound to own them and 
could not switch over their burden, inter alia, on the ground that 88% 
capacity of passenger and luggage, normal business class fares for passenger 
and luggage and compensation as per Article 6.4 were assumption based and 
absolved them from payment of the agreed amounts in view of the report of 
Deloittee. The dispute raised by the Respondent No.1 in regard to the 
quantum of payment based on the report of M/s Deloittee Pakistan has no 
binding effect, as financial commitments made by the parties to the contract 
would not be defused by the aforesaid report. The plea of misrepresentation 
in such like contracts is hardly a ground to allow a party to withdraw itself 
from its financial commitments. In law, before entering into contracts of the 
nature, the parties do their home work.  
 
15. 
 
The clause pertaining to continuous of operation of the 
Business Train, as has been incorporated in the Addendum to the agreement, 
C.Ps.No.130/15 etc.  
9
was introduced for public welfare and has to be read alongwith immediate 
succeeding clauses of the agreement. The mode for termination of the 
contract has been provided under independent clauses and Addendum to the 
agreement has no nexus with it. The clauses of the contract, in no way, can 
be construed to absolve the Respondent No.1 from discharging its obligation 
by not paying the agreed amounts on the ground that financial commitments 
were assumption based, therefore, they were not obliged to pay, as has been 
contended by the Respondent No.1.  
 
16. 
 
It has been shown from the record that the Respondent No.1 has 
invoked the arbitration clause, therefore, the dispute will be determined 
through Arbitration, but at the same time, a restraining order against 
recovery of the amounts by the High Court and the Civil Court in terms of 
Section 41 (b) of the Arbitration Act without examining the three ingredients 
for grant of injunction i.e prima facie case, balance of convenience and 
irreparable loss, is not sustainable at law. Unrestricted permission to the 
Respondent No.1 for plying the Business Train without discharging their 
obligation of payment of amounts agreed in the agreement cannot be termed 
as justifiable grounds for grant of injunction. In the case in hand, prima 
facie, the Respondent No.1 has defaulted in paying the agreed amounts 
towards fares besides the investment, as is evident from the record, 
therefore, grant of injunction of the nature to the disadvantage of the 
Petitioner was not justified.  
 
17. 
 
We are informed that the Respondent No.1 has appointed his 
Arbitrator, and accordingly direct the Petitioner to appoint their Arbitrator 
within the stipulated time incorporated in the short order. We, for the 
C.Ps.No.130/15 etc.  
10
aforesaid reasons, have converted these petitions into Appeals and allow the 
same, by our short order of even date, which is reproduced here-under:- 
“ 
Chief Justice 
 
 
Judge 
 
 
 
Judge 
Islamabad, 
27-10-2015 
Sohail** 
 
