Arbitration clause in joint venture agreements survives alleged termination, covering connected refund and liability disputes.

A valid arbitration clause in a joint venture agreement continued to govern disputes arising out of or in relation to that agreement, even though termination of the underlying commercial arrangement was alleged. Claims for refund or adjustment of amounts paid through affiliates, including security deposit, equity contribution and working expenses, were treated as matters capable of arbitration because they stemmed from the agreement. The objection that the reference involved bifurcated parties or causes of action was rejected where the disputes referred were confined to the joint venture arrangement itself. The arbitrator could examine dues, liabilities and functional issues connected with the venture, though not order winding up.

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Issues: Whether disputes arising out of the joint venture agreement, including claims for refund of amounts paid through affiliates and objections based on termination of the agreement and alleged bifurcation of parties or causes of action, were referable to arbitration and justified appointment of an arbitrator.

Analysis: The arbitration clause in the joint venture agreement was valid and covered disputes arising out of or in relation to the agreement. The fact that the agreement was alleged to have been terminated did not extinguish the arbitration clause for disputes arising from the agreement while it was subsisting. Amounts paid in connection with the joint venture, including security deposit, equity contribution and working expenses, were matters arising from the agreement and capable of adjudication in arbitration. The objection based on bifurcation was rejected because the claims identified for reference were those connected with the joint venture agreement itself, while any separate disputes between sister concerns under independent arrangements were outside the reference. Questions concerning the functional status of the joint venture company and related dues and liabilities could be examined by the arbitrator; the arbitrator could not order winding up, but could decide disputes within the contract and the Act.

Conclusion: The disputes were held referable to arbitration and the appointment of a sole arbitrator was warranted in favour of the petitioner.

Ratio Decidendi: A dispute arising out of or in relation to a valid arbitration agreement remains arbitrable despite alleged termination of the underlying commercial arrangement, and claims connected with that agreement may be referred even if ancillary objections of bifurcation are raised, so long as the disputes are confined to the agreement and its subject matter.

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