Arbitration clause independence prevails where approval objections arise, limiting court interference and preserving tribunal jurisdiction.

The arbitration clause was treated as independent of the main contract, so objections that the underlying agreement lacked governmental or RBI approval did not bar the reference. Section 47 of the Foreign Exchange Regulation Act, 1973 was read as not invalidating the agreement in the manner argued, while Section 5 of the Arbitration and Conciliation Act, 1996 limited court intervention and Section 16 allowed the arbitral tribunal to decide its own jurisdiction and any objection to the existence or validity of the arbitration agreement. On that basis, the civil suit to halt the arbitration and the request for interim injunction failed, and the arbitration proceedings were not restrained.

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Issues: Whether the arbitration clause survived despite the alleged absence of governmental and Reserve Bank approval to the underlying agreement, and whether the civil court should interfere with the arbitral proceedings or grant injunction.

Analysis: The agreement was subject to approval, but Section 47 of the Foreign Exchange Regulation Act, 1973 showed that lack of permission did not invalidate the agreement in the manner contended. Even otherwise, Section 5 of the Arbitration and Conciliation Act, 1996 limited judicial intervention, and Section 16 recognised the arbitral tribunal's power to rule on its own jurisdiction, including objections to the existence or validity of the arbitration agreement. The arbitration clause was therefore to be treated as independent of the main contract, and the tribunal could decide whether any invalidity of the underlying agreement affected the reference. In that setting, the suit seeking to stop the arbitration and the request for interim injunction had no merit.

Conclusion: The arbitration proceedings could not be restrained, and the civil suit was not maintainable; the relief sought by the plaintiff was refused.

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