Arbitration clause does not survive novation where a later mutually agreed contract supersedes the earlier agreement.

When parties enter into a later mutually concluded agreement that supersedes an earlier contract, the arbitration clause in the earlier contract does not survive unless expressly preserved in the later arrangement. The later exit paper here was treated as a fresh, comprehensive contract embodying the settled terms and not a mere continuation of the prior agreements, so the separability of the arbitration clause did not save it. Reference to arbitration was therefore rightly refused.

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Issues: Whether the arbitration clause in the earlier agreements survived after the parties entered into a subsequent exit paper that superseded the earlier contractual arrangement.

Analysis: The earlier agreements contained an arbitration clause, but the later exit paper was a mutually agreed comprehensive arrangement and did not contain any arbitration clause. Where a contract containing an arbitration clause is superseded or novated by a later agreement, the arbitration clause forming part of the earlier contract does not survive unless the later arrangement preserves it. The later document here was treated as a fresh contract embodying the parties' settled terms and not as a mere continuation of the earlier agreements or a case of unresolved disputes under them. On that basis, the principle that an arbitration clause is separable as a collateral term did not assist the appellant, because the operative contract itself had been replaced by novation.

Conclusion: The arbitration clause did not survive the later novation, and reference to arbitration was rightly refused.

Ratio Decidendi: When a later mutually concluded agreement supersedes an earlier contract, the arbitration clause contained in the earlier contract falls with it unless expressly preserved in the later agreement.

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