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Issues:
1. Whether the arbitration agreement survives after a settlement between the parties? 2. Whether the settlement agreement supersedes the arbitration agreement? 3. Whether a new agreement governs the parties after a settlement agreement? Analysis: 1. The case involved a contract for civil and structural work for gas lift facilities containing an arbitration clause. After disputes arose, the parties reached a settlement on 12-8-1998, agreeing on a final payment and releasing each other from further claims. The petitioners later claimed the settlement was obtained under duress and sought to invoke the arbitration clause (Clause 56) of the contract. 2. The respondent argued that the settlement agreement, accepted by the petitioners, superseded the arbitration agreement. Citing the Arbitration and Conciliation Act, 1996, the respondent contended that an arbitration agreement may be in the form of a separate agreement and must be in writing. Referring to a Supreme Court decision, the respondent asserted that once parties reach a final settlement, invoking the arbitration clause would undermine the sanctity of the settlement. 3. The Court considered the provisions of the Arbitration and Conciliation Act, emphasizing that the conduct of parties can impact the jurisdiction of the arbitrator. However, the Court held that as a new agreement had been entered into through the settlement, the arbitration clause had ceased to exist. Relying on the Supreme Court decision, the Court concluded that parties cannot benefit from a settlement and then challenge it by invoking the arbitration clause. Therefore, the Court dismissed the arbitration application, finding no existing arbitration clause to refer the disputes between the parties.
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