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TMI Blog2014 (1) TMI 1811X X X X Extracts X X X X X X X X Extracts X X X X ..... om proceeding before Singapore International Arbitration Centre for arbitration in alleged violation of Shareholders Agreement dated 6th October , 2011 and Master Agreement dated 24th August, 2012. 3. The averment of the plaintiff is that the plaintiff and the defendant no.1 entered into a joint venture Shareholder Agreement in October, 2011 and Master Agreement dated 24th August, 2012. The business of the joint venture started in October, 2011. Certain disputes arose between the parties on account of which the defendant no.1 had got issued a notice dated 22nd March, 2013 to the plaintiff in terms of Clause 12.2 of the Share-Holder Agreement. Thereafter, the defendant no.1 vide its notice dated 24th May, 2013 invoked clause 12.3 for Singap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide its letter dated 24th May, 2013 invoked the arbitration clause. 5. Learned Senior Advocate for the defendant has relied upon the judgments in the case of Aurohill Global Commodities Vs M.S.T.C Ltd., (2007) 7 SCC 120, Roshan Lal Gupta Vs Parasram Holdings, 157(2009) DLT 712 and Clearwater Capital Partners (Cyprus) Ltd., Vs. Gurmeher Singh Majithia & Ors., 189(2012) DLT 362 to contend that the present suit is barred under Section 5 of Arbitration & Conciliation Act and that the remedy of the plaintiff is to approach the Arbitral Tribunal. 6. Learned counsel for the plaintiff at the outset submits that he is not challenging the existence or the validity of the arbitration agreement. The submission put forth is that Clause 12.3 of the Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e"), the Members shall endeavour to settle, through their respective designees to the Board of Directors, the Dispute. All Disputes arising under this Agreement that are not resolved by the Board of Directors shall be resolved as follows: The Company shall first submit the matter to the Senior Representatives of the Members by the providing notice of the Dispute to the members. The Chairmen of the Members shall then make a good faith effort to resolve the Disputes. (b) If they are unable to resolve the Dispute within 30 days of receiving notice of the Dispute, then the Dispute shall, subject the right of the Non-Defaulting Members to dissolve the Company pursuant to Clause 12.4 below, be submitted to nonbinding mediation. Subject to Cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t not to be exercised in a manner so as to adversely affect the arbitral proceedings or to negate the purport of the 1996 Act. Similarly, it is not as if, if injunction restraining the arbitration is not given, the party challenging the validity of the arbitration agreement would be rendered remediless. The said party has the equally efficacious remedy of Sections 16 and 34 of the Arbitration Act. The suit for declaration and permanent injunction is found to be barred by provisions of Specific Relief Act also. 23. In my view, the law with respect to the adjudication by the courts while dealing with an application under Section 8 or Section 11 of the Act would not apply to the suit. Firstly, the proceedings under Sections 8 and 11 are prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... straining the arbitration does not lie and is barred under Section 5 of the Arbitration and Conciliation Act and under Sections 34 and 41 (h) of the Specific Relief Act read with Section 16 of the Arbitration Act. The above judgment was again reiterated by the said Court in the case of Shree Krishna Vanaspati Industries (P) Ltd. vs. Virgoz Oils and Fats Pte Ltd. and Anr., MANU/DE/1681/2009. 11. Similarly, the Hon'ble Supreme Court in the case of Aurohills Globe Commodities Ltd. vs. Maharashtra STC Ltd., (2007) 7 SCC 120 in para 13 held as follows:- "13. In the present case, M/s Aurohill Global Commodities Ltd. has filed this petition under Section 11(9) read with Section 11(5) of the said Act. Section 11 falls in Part I. The alleged cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preserves this power of the arbitrator but in fact expands it. The wording of Section 16(1) indicates that the arbitrator could rule on his own jurisdiction "including ruling on any objections with respect to the existence or validity of the arbitration agreement". The word "including" shows that the scope of the examination of the questions concerning the jurisdiction of the arbitral tribunal is not limited to the existence of the arbitration agreement itself. Therefore, it is inconceivable that where there is a violation of mandatory requirement like Section 21 of the Act, the arbitrator cannot examine that question as well. If the existence of the arbitration agreement is a sine qua non for commencement of arbitration proceedings and if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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