Arbitration clause binds incorporated joint venture company when its civil claims arise from the underlying agreement and related arrangements.

Disputes arising from the agreement dated 14.06.2006 were referable to arbitration because the civil claims for recovery and royalty stemmed from rights and obligations under that written arrangement. Although the deed of adherence was not signed, the jointly incorporated company was formed pursuant to the agreement and relied on its substantive terms in the suits. It could not accept the beneficial provisions of the agreement while rejecting the arbitration clause. Section 7 of the Arbitration and Conciliation Act, 1996 was not a bar where the dispute arose from a defined legal relationship reflected in the agreement and connected arrangements.

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Issues: Whether the disputes in the connected civil suits were referable to arbitration under the agreement dated 14.06.2006, and whether the subsequently incorporated joint venture company could avoid the arbitration clause on the ground that it had not signed the deed of adherence.

Analysis: The suits were founded on the agreement dated 14.06.2006, and the claims for recovery and royalty were traced to rights and obligations arising from that very agreement. Though the deed of adherence was not signed, the joint venture company was incorporated pursuant to the agreement and had chosen to rely upon its substantive terms in the suits. In that situation, the company could not accept the beneficial clauses of the agreement while repudiating the arbitration clause. The existence of Section 7 of the Arbitration and Conciliation Act, 1996, was not a bar, because the dispute arose from a defined legal relationship reflected in the written agreement and its connected arrangements.

Conclusion: The disputes were held to be covered by the arbitration clause, and the civil remedies were not maintainable to defeat reference to arbitration.

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