Arbitration agreement survives contract termination and covers disputes arising from the MOU's end and its consequences.

At the Section 11 stage, the existence of a valid arbitration agreement is a jurisdictional fact that must be determined before appointment of an arbitrator. An express clause in the MOU covered disputes arising at any time in relation to the agreement, and the parties' conduct and correspondence showed that the arrangement remained subsisting rather than replaced by a fresh binding contract. Disputes concerning termination of the MOU and its consequences fell within the broad arbitration language. Applying separability, the arbitration clause was treated as independent of the underlying contract and as surviving termination, making the disputes referable to arbitration.

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Issues: (i) Whether a valid arbitration agreement existed between the parties for the purpose of appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. (ii) Whether the disputes arising out of the terminated MOU were covered by the arbitration clause and whether the arbitration clause survived termination of the MOU.

Issue (i): Whether a valid arbitration agreement existed between the parties for the purpose of appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

Analysis: The Court applied the principle that, at the Section 11 stage, existence of an arbitration agreement is a jurisdictional fact that the Chief Justice or his designate must determine. The MOU contained an express arbitration clause referring disputes arising at any time in relation to the agreement to arbitration. The correspondence showed that the parties continued to act under the MOU and had not concluded any fresh binding long-term agreement replacing it. The material on record established a subsisting arbitration agreement.

Conclusion: A valid arbitration agreement existed between the parties.

Issue (ii): Whether the disputes arising out of the terminated MOU were covered by the arbitration clause and whether the arbitration clause survived termination of the MOU.

Analysis: The Court held that the disputes related to the termination of the MOU and its consequences, and therefore fell within the wide language of the arbitration clause. The initial trial period under the MOU was treated as having been extended by conduct and correspondence, and the relationship was terminated only later. The Court further relied on the separability principle under Section 16 of the Act to hold that an arbitration clause is independent of the underlying contract and survives even if the contract is terminated or otherwise comes to an end.

Conclusion: The disputes were arbitrable and the arbitration clause survived termination of the MOU.

Final Conclusion: The petition was maintainable, the disputes were referable to arbitration, and an arbitrator was required to be appointed under the agreed procedure.

Ratio Decidendi: At the Section 11 stage, the Court must determine the existence of a valid arbitration agreement, and an arbitration clause operates as an independent agreement that survives termination of the underlying contract and covers disputes arising in relation to that contract.

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