KARACHI: Pleas against war risk surcharge rejected
By Our Reporter
KARACHI, July 5: The Sindh High Court has dismissed the suits filed by three Pakistani textiles exporters against the various shipping lines pertaining to war risk surcharge, by granting the application under order VII Rule 11 CPC filed on behalf of the Shipping Lines.
Justice Zahid Kurban Alavi also dismissed the injunction application filed by the plaintiffs along with suits seeking a restraining order against shipping lines from demanding or recovering directly or indirectly any amount of war risk surcharge.
Sapphire Textile Mills Ltd, in suit No 175/02, Gulistan Textile Mills Ltd, in suit No 176/02, and Bhanero Textile Mills Ltd, in suit No 189/02, were the plaintiffs, represented through Munib Akhtar, advocate.
APL Pakistan (Pvt) Limited and other defendants were represented by M/s Shaiq Usmani, Sajid Zahid, M. Naeem and Aijaz Ahmed, advocates.
According to facts of the case, in suit No 175/2002 an application (CMA 1049/02) was filed, under Order XXXIX Rules 1 & 2 CPC, seeking a restraining order against the defendants from demanding or recovering directly or indirectly any amount by way of war risk surcharge. Another application, under order VII Rule 11 CPC (CMA 1567/2002), was filed by Mr Shaiq Usmani on behalf of the defendants with the prayer that the plaint should be rejected. In suit No 176/2002 and suit No 189/2002 also a similar application (CMA 1051/02) was filed, with the same prayer.
Dealing with the application under Order VII Rule 11 CPC (CMA 1567/2002), Justice Alavi noted that the first objection raised by the defendants was to the effect that the matter had already been decided and disposed of by the Lahore High Court by a judgment dated December 12, 2001. According to them, the points in connection with war risk surcharge was decided, therefore this suit was not maintainable.
Secondly, it was the contention of the defendants that the plaintiffs had claimed that there was a restrictive trade practice, therefore there was a violation of section 3 of the Monopoly & Restrictive Trade Practices (Control & Prevention), Ordinance, 1970. In the said Ordinance in sections 10 to 12 the mode of correction of such practice and for awarding punishment is given.
According to the defendants, if indeed they were hit by the Monopoly Restrictive Trade Practice, then the plaintiff should have availed of the remedy provided under law, which required them to approach the authority first. The authority also had powers to grant interim orders and as such the plaintiff would have been in a position to get interim relief.
The defendants had also claimed in the application that against the defendants Nos 1 to 22 there was no cause of action as they were the local agents of the shipping lines.
It was further claimed that the defendants were not party to any conference line agreement and had nothing to do with the imposition of war risk surcharge. In effect they were merely recovering war risk surcharge on the instructions of the defendant Nos 23 to 28.
The plaintiff had filed counter-affidavit to the CMA No 1567/02. According to them, the writ petition that was filed with the Lahore High Court was dismissed in limine on the ground of maintainability. They had denied that the petition was dismissed on merit. The reliefs sought were ancillary and incidental. The principles of res judicata was, therefore, not applicable.
Justice Alavi noted that the petitioners had stated that the petition was the consequence of the failure of the respondents to act in compliance with the provisions of the Merchant Shipping Ordinance, 2001, especially sections 81 to 83 thereof.
Through this petition the petitioner had also sought to highlight the collusive action of the respondents-shipping companies in holding the international commerce of the country hostage to the payment of unjustified freight charges. The petitioners had prayed that the respondents should be asked to perform its obligation under the Merchant Shipping Ordinance. The respondents should be restrained from giving effect to the unlawful agreement for the purpose of charging freight rate under the guise of war risk surcharge. They had also sought refund of the amount so recovered.
The judgment had looked at sections 81 to 83 of the Ordinance and had observed that these provisions were applicable only to shipping operators engaged in coastal shipping and not to foreign shipping lines transporting cargo to and from Pakistan.
The judge had further stated that based upon his detailed observations the relevant sections were inapplicable to any international liners conference agreement to which the respondents-shipping lines might be a party. He had, therefore, observed that the said shipping lines could not be required by the federal government to provide to it a copy of the Liners Conference Agreement, nor could the federal government be directed to act under sections 81 to 83 of the Ordinance in respect of any Liner Conference Agreement to which the respondents-shipping lines were a party, as long as the said lines did not engage in coastal shipping.
Justice Alavi noted that no findings had been given on objections raised by the local agent representing foreign principals. He was, therefore, of the view that the matter was not hit by res judicata as the prayers in the suit and the prayers in the petition were totally different.
Indeed the plaintiff had raised an issue that the defendants were indulging in restrictive trade practice, Justice Alavi noted. As according to the defendants if that be so then there was a provision available in the said Ordinance by virtue of which relief could be sought and obtained, including an interim relief, he observed.
Referring to the Monopoly & Restrictive Trade Practice (Control & Prevention) Ordinance, 1970 and relevant sections mentioned in the application, Justice Alavi pointed out that section 13 of the Ordinance dealt with interim orders and section 14 dealt with the special inquiry. Section 15 dealt with the applicability of CCP as well as PPC.
He observed that if the plaintiff was of the opinion that there had been a violation of the Ordinance, 1970, and its relevant sections, then it would have been proper for the plaintiff to have exercised the jurisdiction mentioned in the Ordinance, 1970 and proceed accordingly.
The plaint clearly showed that the shipping line and liner conference had got together and formed a sort of cartel and thereafter imposed a form of a tax under the name of war risk surcharge, the judge observed, adding in the body of the plaint sections 2 and 3 as well as section 6 of the Ordinance, 1970, had been mentioned in detail.
An emphasis had been made that the said Ordinance prohibited undue concentration of economic power unreasonable monopoly power or unreasonable restrictive trade practice. In such circumstances, the relevant sections of the Ordinance would come into play, he noted, adding the plaintiff had failed to mention was that once it was claimed that there was an unreasonable restrictive trade practice and that there was a violation of section 3, then ipso facto section 11 would come into picture.
Accordingly, he granted CMA No 1567/2002 and held that the plaintiff should have availed of all the remedies provided under the Ordinance, 1970 instead of filing this suit.
With regard to CMA No 1049/2002 which was an application under Order XXXIX Rules 1&2 CPC, Justice Alavi observed that if it was alleged that the war risk surcharge being so levied was void and illegal, contrary to the provisions of the Monopoly & Restrictive Trade Practice (Control & Prevention) Ordinance, 1970, then seeking relief by way of a suit was not proper, especially when remedy was available under the Ordinance, 1970. In these circumstances, he held that this application had become infrucutous and was dismissed.
Since in the other two matters namely suit No 176/2002 and suit No 189/2002, identical applications under Order VII Rule 11 CPC had been filed with identical counter-affidavits and rejoinders, findings were also applicable to suit No 176/2002 and suit No 189/2002. The suits bearing Nos 175/02, 176/02 and 189/02 along with aforementioned CMAs stood disposed of in view of the above order.
