TMI Blog2013 (9) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... it paper which does not even indicated any disputes arising under the original contract or about the settlement thereof, it was nothing but a pure and simple novation of the original contract by mutual consent - Exit paper clearly indicated that it was a mutually agreed document containing comprehensive terms and conditions which -admittedly does not contain an arbitration clause. The High Court was right in taking the view that it was not a case involving assertion by the respondent of accord a satisfaction in respect of the earlier contracts - If that be so, it could have referred to arbitrator in terms of those two agreements Following Union of India v. Kishorilal Gupta and Bros. [1959 (5) TMI 37 - SUPREME COURT] - The principle lai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrived at between the parties by mutual consent. Defendant aggrieved by the said order filed FAO (OS) No.290 of 2012 before the Division Bench of the Delhi High Court, which confirmed the order of the learned Single Judge and dismissed the appeal against which this appeal has been preferred by special leave. 3. Mr. Manu T. Ramachandran, learned counsel appearing for the appellant raised the following question of law: a) Whether an arbitration clause is a collateral term in the contract, which relates to resolution of disputes, and not performance and even if the performance of the contract comes to an end on account of repudiation, frustration of breach of contract, the arbitration agreement would survive for the purpose of resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntracts, especially when the sole purpose of the Exit paper dated 01.02.2011 was to put an end to the contractual relationship between them under the -aforesaid earlier contracts. Apart from the decisions referred hereinbefore, reliance was also placed on the judgment of the U.S. Court in Nolde Bros., Inc. v. Bakery Workers 430 US 243. 5. Mr. Sai Krishna Rajgopal, learned counsel appearing for the respondent placing reliance on the detailed counter affidavit filed on behalf of the respondent submitted that the arbitration clause in the agreements dated 01.04.2007 and 01.04.2010 cannot be invoked since both the above-mentioned agreements were superseded and abrogated by the new agreement dated 01.02.2011. Learned counsel also submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion shall be in the English language at Mumbai. The arbitration shall be governed by the provisions of the Arbitration and Conciliation Act, 1996 or any other statutory modification or reenactment thereof for the time being in force and award or awards of such arbitrator shall be binding on all the parties to the said dispute. 7. We have now to examine terms of the subsequent agreement titled Exit paper dated 01.02.2011. It is the common case of the parties that the Exit paper/agreement entered into -between the parties does not contain any arbitration clause. It is useful to extract the relevant portion of the Exit paper, which is as follow: With reference to your mail/letter dated 1st February, 2011 on closing the center, from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re directly or indirectly interested in any business in direct competition with that of IMS and the partner agrees and undertakes to ensure that neither he nor his family members shall be involved in or connected to any business in direct competition with that of IMS at any time during the currency of this agreement and for a further period of six months therafter. 8. Full and final settlement I/We accept all the above-mentioned points and confirm that upon receipt of the sum stated hereinafter in full and final settlement of all my/our claims, neither me/we nor any person claiming by or through me/us shall have any further claims against IMS whatsoever. Any violation of points 1,3,4,5 7 from the partner s end will attract legal cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequences . Principle laid down by the House of Lords in Heyman v. Darwins Limited 1942 (1) All. E.R. -337 was also relied on by this Court for its conclusion. The Collective bargaining principle laid down by the US Supreme Court in Nolde Bros. case (supra) would not apply to the facts of the present case. 9. We may indicate that so far as the present case is concerned, parties have entered into a fresh contract contained in the Exit paper which does not even indicate any disputes arising under the original contract or about the settlement thereof, it is nothing but a pure and simple novation of the original contract by mutual consent. Above being the factual and legal position, we find no error in the view taken by the High Court. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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