Full Judgment Text & Judicial Ruling

2026 P L C (Labour) 77 [Islamabad High Court] Before Inaam Ameen Minhas, J REKO DIQ MINING COMPANY (PVT.) LTD. through duly authorised officer Versus NATIONAL INDUSTRIAL RELATIONS COMMISSION through Registrar and 4 others Writ Petition No.2795 of 2025, decided on 15th December, 2025. (a) Industrial Relations Act (X of 2012)--- ----Ss.31, 32, 33, 53, 54 & 57---National Industrial Relations Commission (Procedure and Functions) Regulations, 2016, Reglns.3 & 4---Civil Procedure Code (V of 1908), O.VII, R.10---Constitution of Pakistan, Art.199---Territorial jurisdiction of NIRC---Employment contract---Exclusive jurisdiction clause---Effect---Employment contract containing an exclusive jurisdiction clause conferring jurisdiction on courts at place I ---Enforceability and legal effect---Where the cause of action is asserted to have arisen at place Q and the employee institutes a grievance petition before NIRC at place Q ---Maintainability of grievance petition at place Q ---Scope---Brief facts were that the petitioner company challenged the NIRC Full Bench order whereby its appeal against the Single Member, NIRC was dismissed; the respondent employee was hired as safety officer under an offer letter containing an exclusive jurisdiction clause for Islamabad; after termination notice, respondent employee filed a grievance petition at NIRC Quetta, and the petitioner s application under O. VII, R. 10, C.P.C. for return of plaint was rejected---Question requiring determination in the present matter was as to whether NIRC Quetta had territorial jurisdiction despite the parties having confined themselves to the exclusive jurisdiction of the courts at Islamabad? ---Held: It was clear from perusal of standard-form contract furnished by the petitioner company that there existed clear inequality of bargaining power between the petitioner company and the respondent employee---Respondent employee had no meaningful opportunity to negotiate any of its terms---This lack of real choice underscored the inequality of bargaining power between the parties and assumed significance while examining the enforceability of the contractual stipulations contained therein---National Industrial Relations Commission being a federal statutory body designed the sitting of its members at different placed was to be flexible and facilitative in nature to adequately address the disputes of trans-provincial establishments---The seat of member of NIRC at Quetta, therefore, did not constitute a separate or distinct forum; it was merely a bench of NIRC through which the NIRC exercised its federally conferred jurisdiction---Proceedings conducted at Quetta remained proceedings of the NIRC itself, and the territorial jurisdiction of Industrial Relations Act, 2012 extended to whole of Pakistan---Jurisdiction flew from the statute creating the forum, not from the place where the forum happened to sit---So long as the subject matter of the dispute fell within the statutory mandate of the NIRC, the exercise of jurisdiction through any of its duly constituted seats/benches could not be questioned on territorial grounds alone---In the present case, the NIRC acting though its Quetta Bench lawfully exercised jurisdiction in the matter---Proceedings before the NIRC were directed to continue---Present constitutional petition was dismissed, in circumstances. (b) Jurisdiction--- ----Jurisdiction is not a mere technicality but the very foundation upon which the legality of judicial or quasi-judicial proceedings rests. (c) Jurisdiction--- ----Jurisdiction clause in an employment contract---Effect---Parties agreeing to jurisdiction of courts at a particular place---Circumstances where there is inequality of bargaining power between employer and employee---Scope---Where two or more forums are otherwise competent to entertain a dispute, the parties may, by mutual agreement, restrict themselves to one such forum for the adjudication of their disputes---Such clauses, when they merely regulate the choice amongst available forums and do not oust the jurisdiction of all courts, are respected in order to uphold the sanctity of contract and the autonomy of the parties---A jurisdiction clause is a contractual stipulation, where the parties to the contract choose or select one particular forum out of two or more available forums, and the same is permissible---Choice of parties regarding jurisdiction clause has been upheld by Supreme Court to maintain the sanctity of the contract---General rule of contract in common law is founded upon the principle of freedom of contract that parties are ordinarily the best judges of their own interests and that where they freely and voluntarily enter into a contract the primary function of the courts is to enforce to what has been agreed---However, it has to noted that employment contracts are often marked by unequal bargaining power because the employer generally occupies a dominant position, while employee has little or no real opportunity to negotiate the terms of engagement, and only to sign the dotted line of the contract in order to secure his livelihood---In such circumstances, courts are not confined to formal reading of contractual clauses but are required to examine the fairness and reasonableness of enforcing such clauses---However, it has also to be noted that where enforcement of jurisdiction clause would operate oppressively, unfairly, or inequitably, courts may justifiably decline to give effect to it. State Life Insurance Corporation v. Muhammad Saleem 1987 SCMR 393; Messrs Kadir Motors, (Regd.) Rawalpindi v. Messrs National Motors Ltd. 1992 SCMR 1174 and Eden Builders (Pvt.) Ltd. v. Muhammad Aslam and others 2022 SCMR 2044 and Uber Technologies Inc. and others v. David Heller and others 2020 SCMR 1279 rel. Redtone Telecommunications Pakistan (Pvt.) Limited and 3 others v. Federation of Pakistan and 11 others PLD 2014 Sindh 601, Global Quality Foods (Pvt.) Ltd. v. Hardee s Food Systems, Inc. PLD 2016 Sindh 169; Tahir Tariq Textile Mills (Pvt.) Ltd. and 2 others v. National Development Finance Corporation 2003 CLD 1546; Gillespie Brothers and Co. Ltd. v. Roy Bowles Transport Ltd., (1973) 1 QB 400; Central Inland Water Transport Corporation Ltd. and another v. Brojo Nath Ganguly and another AIR 1986 SC 1571 and Snehal Kumar Sarabhai v. Economic Transport Organisation and others AIR 1975 Gujarat 72 ref. Makhdoom Ali Khan and Khwaja Aizaz Ahsan for Petitioner. Kamran Mujrtaza and Hassan Kamran for Respondent No.2. Assisted by: Muhammad Fahad, Research Intern and Muhammad Yahya Khan Niazi, Judicial Law Clerk. Date of hearing: 16th September, 2025. JUDGMENT INAAM AMEEN MINHAS, J.---Through the instant writ petition, the petitioner has assailed the order dated 02.07.2025 ( Impugned Order ), passed by the learned Full Bench, National Industrial Relations Commission ( NIRC ), Islamabad, whereby the petitioner s appeal against the order dated 27.01.2025 passed by the learned Single Member, NIRC, Quetta, was dismissed. 2. The facts, in brief, of the instant writ petition are that the petitioner company i.e., Reko Diq Mining (Pvt.) Ltd., is carrying out mining activities near Reko Diq town in District Chagai, Balochistan, and operates across Pakistan having its offices in Islamabad, Karachi, and Quetta. The petitioner company offered employment to respondent No. 2/Rubina Musa ( respondent ) as a Safety Officer by way of an offer of employment dated 02.10.2023 issued from its registered office at Islamabad, and the same was accepted by her on 04.10.2023. The said employment contract contains a clause stipulating an exclusive jurisdiction, i.e., clause 14, which states that any dispute arising from the employment would be governed by the laws applicable in the Islamabad Capital Territory and subject to the exclusive jurisdiction of courts in Islamabad. Subsequently, the petitioner company terminated the respondent s employment vide Notice of Termination dated 30.09.2024, against which the respondent filed her grievance petition before learned member, NIRC at Quetta. The petitioner company raised an objection to the jurisdiction of learned member, NIRC, Quetta and filed an application under Order VII, Rule 10 of C.P.C, on the basis of exclusive jurisdiction clause in the employment contract. The learned member dismissed the application filed by the petitioner company vide order dated 27.01.2025, holding that the cause of action had arisen in Balochistan and that clause 14 is in violation of section 28 of the Contract Act, 1872. The petitioner company assailed the order of the learned member at Quetta before the learned Full Bench, NIRC, Islamabad, which was dismissed vide the Impugned Order. 3. The learned counsel for the petitioner company contended that the Impugned Order is illegal, without jurisdiction, and void ab initio, as it disregards the binding effect of the exclusive jurisdiction clause contained in the offer of employment, and both the learned member at Quetta, and the learned Full Bench, NIRC at Islamabad failed to appreciate that the parties had expressly agreed to limit the jurisdiction to the courts in Islamabad, and that such a clause is enforceable under settled law. It was argued that the relationship between the parties is governed by the written employment contract, which unequivocally contains an exclusive jurisdiction clause, whereby the parties consciously and voluntarily agreed that any dispute arising out of or in connection with the employment shall be adjudicated by a specifically designated forum i.e., the courts at Islamabad. The learned counsel further submitted that the law is now well-settled that where two or more forums are otherwise competent to entertain a dispute, the parties are legally entitled to select one such forum by mutual agreement, and such a choice neither offends section 28 of the Contract Act, 1872 nor violates any principle of public policy. The learned counsel further contended that the rejection of the petitioner company s application under Order VII, Rule 10, C.P.C., and the subsequent dismissal of its appeal, amounts to proceedings coram non judice, as the learned member at Quetta lacked territorial jurisdiction in view of the contractual stipulation. The learned counsel also asserted that the learned Full Bench erred in holding that learned member at Quetta possessed jurisdiction and failed to appreciate the binding nature of the exclusive jurisdiction clause. The learned counsel placed reliance on the judgments of superior Courts including State Life Insurance Corporation v. Muhammad Saleem (1987 SCMR 393), Kadir Motors, Rawalpindi v. National Motors Ltd. (1992 SCMR 1174) and Eden Builders (Pvt.) Ltd. v. Muhammad Aslam (2022 SCMR 2044), wherein it has been held that where two or more courts possess jurisdiction, the parties may by mutual agreement confer exclusive jurisdiction on one of them, and such an arrangement neither offends section 28 of the Contract Act, 1872 nor violates section 9 or 20 of the Code of Civil Procedure, 1908. 4. In amplification of the above, the learned counsel for the petitioner company submitted that the learned Full Bench failed to apply binding precedents and erred in holding that where multiple forums possess concurrent jurisdiction, the party may choose the convenient one. It was further submitted that considerations of convenience or hardship cannot override a valid contractual stipulation and the learned Full Bench, while recognizing the validity of the employment contract, selectively disregarded its exclusive jurisdiction clause, rendering the Impugned Order inconsistent and unsustainable. Learned counsel also submitted that this Court alone possesses jurisdiction to entertain the present petition, as the exclusive jurisdiction clause designates Islamabad as the proper forum and the Impugned Order was passed by a Federal entity functioning within Islamabad. Reliance was placed on Taufiq Asif v. General (Retd.) Pervez Musharraf (PLD 2024 SC 610). 5. Conversely, the learned counsel for the respondent supported the Impugned Order by contending that the jurisdiction of NIRC is statutory in nature, conferred by the Industrial Relations Act, 2012, ( IRA 2012 ) and cannot be ousted by a private contractual arrangement. He further submitted that the dispute in question arises out of the employer employee relationship and squarely falls within the definition of industrial disputes and unfair labour practices under the IRA 2012. In such matters, statutory remedies provided for workmen cannot be curtailed or nullified through contractual clauses. The learned counsel argued that in view of the concurrent findings recorded by the forums below of competent jurisdiction, this Court should not exercise its supervisory jurisdiction. Lastly it was prayed that the instant petition be dismissed and the proceedings before the learned member, NIRC at Quetta be allowed to continue. 6. I have given anxious consideration to the arguments of the learned counsel for the parties and perused the record with their able assistance and considered the case-laws. 7. Tersely, the petitioner company s application under Order VII Rule 10, C.P.C. was dismissed by the learned member, NIRC at Quetta, holding that the cause of action had arisen in Balochistan and that the clause 14 is in violation of section 28 of the Contract Act, 1872. The petitioner company assailed the order of the learned member, NIRC at Quetta before the learned Full Bench, NIRC, Islamabad, in an appeal, which was dismissed vide the Impugned Order. It is manifest that the petitioner company does not dispute the jurisdiction of the NIRC per se, and the primary contention advanced on behalf of the petitioner company is that, by virtue of clause 14 of the employment contract, the parties had contractually confined themselves to the exclusive jurisdiction of the courts at Islamabad. The gist of the petitioner s case, therefore, rests upon the enforceability and legal effect of the said exclusive jurisdiction clause. While considering this background, the grounds raised by the parties and the plethora of precedents cited, the following questions need adjudication by this Court:- i) Whether, in the presence of Clause 14 of the employment contract conferring exclusive jurisdiction upon the courts at Islamabad, the learned Single Member of NIRC, Quetta is barred from exercising jurisdiction? ii) Whether the existence of an exclusive jurisdiction clause in an employment contract could oust or restrict the statutory jurisdiction of the NIRC, Quetta Bench, especially where the cause of action arose in Balochistan and the Commission otherwise derives jurisdiction under the Industrial Relations Act, 2012? 8. This Court shall now address the foremost question requiring determination which relates to jurisdiction. It is now well settled that jurisdiction is not a mere technicality but the very foundation upon which the legality of judicial or quasi-judicial proceedings rests. It is, therefore, imperative to examine, at the outset, whether the learned Single Member, NIRC at Quetta, possessed lawful authority to entertain the grievance petition of the respondent, in light of clause 14 of the employment contract, which is reproduced as under:- 14. This Agreement and your employment with the Company shall be governed by the laws of Pakistan as in force in the Islamabad Capital Territory. Any disputes arising between the parties in relation to any aspect of your employment shall be subject to the exclusive jurisdiction of the courts in Islamabad. 9. There is no cavil to the settled proposition of law that where two or more forums are otherwise competent to entertain a dispute, the parties may, by mutual agreement, restrict themselves to one such forum for the adjudication of their disputes. Such clauses, when they merely regulate the choice amongst available forums and do not oust the jurisdiction of all courts, are respected in order to uphold the sanctity of contract and the autonomy of the parties. This legal position has been explicated by the Hon ble Supreme Court in State Life Insurance Corporation v. Muhammad Saleem, (1987 SCMR 393) as:-

It is evident from a plain reading of these provisions that there is no absolute exclusion of jurisdiction under section 9 or section 20 of the Code of Civil Procedure nor there is any violation of the provisions of section 28 of the Contract Act when two or more Courts have jurisdiction to try a suit and the parties mutually agree to choose or take their dispute to one of them. The civil Courts exercise their jurisdiction under the Code of Civil Procedure. If they do not possess such jurisdiction under the Code it cannot be conferred on them through a mutual agreement of the parties to a dispute. But in a situation where two or more Courts have jurisdiction to try a suit under the Code of Civil Procedure, then an agreement between the parties that any dispute arising between them shall be tried only by one of such Courts could not be considered contrary to public policy as it would neither contravene the provisions laid down in section 28 of the Contract Act nor would it violate in any manner the provisions of section 9 or section 20 of the Code of Civil Procedure. The upshot of the above is that an exclusive jurisdiction clause is valid where the parties select one specific forum among available competent forums, and it is invalid if it seeks to vest jurisdiction where it does not exist. Thus, it transpires that a jurisdiction clause is a contractual stipulation, where the parties to the contract choose or select one particular forum out of two or more available forums, and the same is permissible. 10. The principle laid down in State Life Insurance Corporation (ibid.) has been reaffirmed by the Hon ble Supreme Court in its several judgments and the choice of the parties regarding jurisdiction clause has been upheld to maintain the sanctity of the contract. In the case of Messrs Kadir Motors (Regd.), Rawalpindi v. Messrs National Motors Ltd., Karachi (1992 SCMR 1174) the Hon ble Supreme Court observed:- The main argument regarding clause 27 of the agreement has been sufficiently explained above and in view of the dictum of this court in case of State Life Insurance Corporation of Pakistan v. Rana Mohammed Saleem 1987 SCMR 393 diameter is clinched, the agreement is legal and not hit by section 28 of the Contract Act and the parties are bound to follow it. Similarly, in Eden Builders (Pvt.) Lmited, Lahore v. Muhammad Aslam and others (2022 SCMR 2044) the Hon ble Supreme Court held:- 6. We are intentionally not discussing the merits of the case so that it may not prejudice the case of any of the parties as limited question for consideration by this court is whether clause 25 of the agreement which confers exclusive jurisdiction to the civil court Lahore - is binding upon the parties are not. It is settled proposition of law that the parties cannot by agreement confer jurisdiction upon any court when otherwise the court has no jurisdiction. No doubt a party cannot be restrained to enforce his legal right in ordinary court of law but if by mutual agreement between the parties a particular court having territorial and pecuniary jurisdiction is selected for the determination of their dispute, there appears to be nothing wrong or illegal in it or opposed to public policy (Reference may be made to the case of Messrs Kadir Motors (Regd). Rawalpindi v. Messrs National Motors Ltd., Karachi and others (1992 SCMR 1174). There are numerous precedents of the superior courts, including Redtone Telecommunications Pakistan (Pvt.) Limited and 3 others v. Federation of Pakistan and 11 others (PLD 2014 Sindh 601), Global Quality Foods (Pvt.) Ltd. v. Hardee s Food Systems, Inc., (PLD 2016 Sindh 169) and Tahir Tariq Textile Mills (Pvt.) Ltd. and 2 others v. National Development Finance Corporation (2003 CLD 1546), which have taken similar approach on the exclusive jurisdiction clause in a contract. This Court is in agreement that the principle enunciated by the superior Courts on the subject is now well settled. It bears emphasis, however, that what the superior Courts have consistently given effect to is to preserve the sanctity of contract, by enforcing the contractual obligations voluntarily undertaken by the parties so as to avoid breach thereof. Nonetheless, in all the aforesaid precedents, the enforcement of exclusive jurisdiction clauses was premised primarily upon the principle of freedom of contract between the contracting parties. The relative bargaining position of the contracting parties and the nature of the contract itself were neither in issue nor examined, as the disputes in those cases were predominantly commercial in character. These distinguishing features assume significance in the present case, where the contractual relationship emanates from an employment arrangement, and considerations of dominance and unequal bargaining power cannot be ignored or brushed aside. 11. The general rule of contract in common law is founded upon the principle of freedom of contract, that parties are ordinarily the best judges of their own interests and that, where they freely and voluntarily enter into a contract, the primary function of the courts is to enforce to what has been agreed. Traditionally, it has been regarded as immaterial that one party may enjoy a stronger economic position than the other, for inequality of bargaining power, by itself, was not considered sufficient to justify judicial intervention. However, over time, the courts of England, Canada, and India have recognized that this principle is not absolute. In particular, where inequality of bargaining power and the presence of oppressive, unfair or unjust contractual terms coexist, for imbalance of power alone is insufficient unless it is itself apparent in contractual stipulations. The imbalance of bargaining power is such that meaningful choice is illusory, the courts have applied the doctrine of unconscionability to prevent enforcement of terms that are oppressive, unfair, or unjust. This does not undermine the sanctity of contract as a general rule; rather, it reflects a measured judicial approach to exceptional circumstances where strict adherence to contractual autonomy would undermine fairness and administration of justice. 12. The freedom of contract and volition exercised by contracting parties, do not operate uniformly across all categories of contracts, but varies with the nature of the contract, the relationship of the parties, and the circumstances attending its construction. For instance, in case of commercial contracts the obligations are familiar to the commercial parties, and the principles of construction require the courts to have regard to that commercial background, the context of contract and the circumstances of the parties, and consideration against such background and context would lead to an unfair result, which will eventually defeat the sanctity of contract. Commercial stipulations in a contract are adhered to according to their gist, since the parties are usually in equal position to bargain and set out the terms consciously, thus, their choice of forum is respected and endorsed. In employment contracts the position of one of the party is not always on equal footing, a party to such contract, though consenting to it, may not give a free consent because that party is exposed to such influence from the other party, which may deprive that party to exercise its own judgment. The position of one party to dominate the will of the other party results in an unfair advantage, which directly effects the choice of the parties. 13. The question that, therefore, arises for consideration is the extent to which a court may justifiably intervene to decline enforcement of an exclusive jurisdiction clause invoked by a party. Undoubtedly, the threshold for such intervention must be high, for ordinarily the Courts do not permit a party to resile from its contractual obligations. However, such intervention becomes warranted where refusal to do so is necessary to prevent oppression, to curb misuse of judicial process, or to restrain a dominant party from securing an unfair advantage under the guise of contractual freedom. Jurisprudence, particularly in English law, recognizes that equitable intervention is justified in cases where contractual terms are unconscionable, having been imposed as a result of unequal bargaining power, or where one party exploits its economic dominance over the necessity of the other. In such circumstances, the sanctity of contract yields to the overarching principles of fairness and justice, especially where enforcement of the term would perpetuate inequality, oppression or result in manifest injustice. Lord Denning was the originator of the theory of inequality of bargaining power and expounded upon it in Gillespie Brothers…

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