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TMI Blog2013 (9) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... preferred IA No.18 of 2012 under Section 8, read with Section 5 -of the Arbitration and Conciliation Act, 1996 for rejecting the plaint and referring the dispute to arbitration and also for other consequential reliefs. Respondent-plaintiff raised objection to the said application stating that the suit is perfectly maintainable. The High Court rejected the application vide its order dated 16.04.2012 holding that that earlier agreements dated 01.04.2007 and 01.04.2010, which contained arbitration clause stood superseded by a new contract dated 01.02.2011 arrived at between the parties by mutual consent.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 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of disputes arising under or in connection with the contract. Learned counsel also submitted that the court has erroneously held that the case of the appellant is not a case involving the assertion by the respondent of accord and satisfaction in respect of earlier contracts, 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the new agreement dated 01.02.2011. An arbitration clause in an agreement cannot survive if the agreement containing arbitration clause has been superseded/novated by a later agreement. The agreement dated 01.04.2010 contained the following arbitration clause: "20. Arbitration All disputes and questions whatsoever which may arise, either during the substance of this agreement or afterwards, between the parties shall be referred to the arbitration of trhe managing director of IMS Learning Resources Pvt. Ltd. Or his nominee and such arbitration 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laims will be settled till 31st January, 2011 and the claims would be - released after the date of termination of the partner agreement. 6. Security Deposit The security deposit amount will be refunded back to you after the completion of servicing of all enrolled IMS students. In case of any due on partner to the company (unsettled fees, loan or advance for centre activities etc.), same amount will be deducted from the security deposit. 7. Non Compete Clause The partner has averred that neither he, nor his family members are 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another, the arbitration clause, being a component part of the earlier contract, falls with it. But where the dispute is whether such contract is void ab intio, the arbitration clause cannot operate on those disputes, for its operative force depends upon the existence of the contract and its validity. The various other observations were made by this Court in the above-mentioned judgment in respect of "settlement of disputes arising under the original contract, including the dispute as to the breach of the contract and its 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 Su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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