TMI Blog2007 (3) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... In the event of any dispute or difference arising between the parties hereto or as to the rights and obligations under this agreement or as to any claim monetary or otherwise of one party to another, such dispute or difference shall be referred to arbitration of a common arbitrator, if agreed upon, otherwise to two or more arbitrators, one to be appointed by each of the parties to this agreement and such arbitration shall be governed by the Arbitration and Conciliation Act, 1996, for the time being in force. The venue for such arbitration shall be in India or as is mutually decided otherwise. Until a finality is achieved in the arbitration or litigation, the Licensor shall have no right to cancel the agreement and appoint any third party or enter into agreement with any party for the sale/ importation or manufacture of the products/ provision of services in the territory." Respondent, however, contends that the said agreement was preceded by a Memorandum of Understanding dated 1.11.2003. Respondent further contends that the said purported Memorandum of Understanding and licence agreement dated 8.05.2004 are vitiated by a fraud of a very large magnitude fructified by a criminal co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y made absolute." This Court's attention was further drawn to the fact that in the plaint of the said suit it had categorically been stated that the private respondents therein hatched their conspiracy to defraud the respondent and for the purpose of obtaining bribes, commissions and kickbacks and in that view of the matter the entire agreement is vitiated in law. Mr. Dushyant Dave, learned senior counsel appearing on behalf of the petitioner, in support of this application, would submit: (i) the execution of the agreement dated 8.05.2004 has not been denied or disputed. (ii) The correspondences have been passed between the parties between the period 8.05.2004 and 5.02.2005 and dispute arose in regard to the use of the logo 'L.G.' (iii) The arbitration agreement being a part of the contract, the validity or otherwise thereof can be gone into by the arbitrator in terms of Section 16 of the 1996 Act. (iv) Once an arbitration agreement is found to exist; having regard to Section 5 thereof, no judicial authority can exercise any jurisdiction in the matter. (v) This Court, having regard to the philosophy underlying the 1996 Act should uphold the arbitration agreement betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chief Justice or his designate under Sub-sections (5) or (6) of Section 11 of the 1996 Act is judicial in nature. It was stated: "39. It is necessary to define what exactly the Chief Justice, approached with an application under Section 11 of the Act, is to decide at that stage. Obviously, he has to decide his own jurisdiction in the sense, whether the party making the motion has approached the right High Court. He has to decide whether there is an arbitration agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. It is necessary to indicate that he can also decide the question whether the claim was a dead one; or a long barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection. It may not be possible at that stage, to decide whether a live claim made, is one which comes within the purview of the arbitration clause. It will be appropriate to leave that question to be decided by the arbitral tribunal on taking evidence, along with the merits of the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rain Parasrampuria (Dead) and Others v. Pushpa Devi Saraf and Others, (2006) 7 SCC 756] The said issue is pending consideration before the Madras High Court. Not only the parties to the agreement but also those officers who have negotiated on behalf of the respective companies are also parties therein. LG Corporation which is the owner of the LG logo is also a party therein. Therein, an order of injunction had been passed. In terms of the said order of injunction, the applicant herein was prohibited from taking any action in terms of the said agreement which would include the arbitration clause also. The order dated 21.01.2006 has become final. No appeal has been preferred thereagainst. The applicant could have filed an appropriate application for modification of the order of injunction which it did not choose to do. The doctrine of comity or amity required a court not to pass and order which would be in conflict with another order passed by a competent court of law. The courts have jurisdiction to pass an order of injunction not only under Order XXXIX, Rule 2 of the Code of Civil Procedure but also under Section 151 thereof. This aspect of the matter has been considered in 'A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion agreement as well as other disputes, the matter is required to be referred to arbitration. There is also no provision for splitting the cause or parties and referring the subject-matter of the suit to the arbitrators. It was further stated : "The next question which requires consideration is even if there is no provision for partly referring the dispute to arbitration, whether such a course is possible under Section 8 of the Act. In our view, it would be difficult to give an interpretation to Section 8 under which bifurcation of the cause of action, that is to say, the subject- matter of the suit or in some cases bifurcation of the suit between parties who are parties to the arbitration agreement and others is possible. This would be laying down a totally new procedure not contemplated under the Act. If bifurcation of the subject-matter of a suit was contemplated, the legislature would have used appropriate language to permit such a course. Since there is no such indication in the language, it follows that bifurcation of the subject-matter of an action brought before a judicial authority is not allowed. Secondly, such bifurcation of suit in two parts, one to be decided b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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