TaxTMI 
TaxTMI 
TaxTMI 
2007 (3) TMI 669
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....y the Arbitration and Conciliation Act, 1996, for the time being in force. The venue for such arbitration shall be in India or as is mutually decided otherwise. Until a finality is achieved in the arbitration or litigation, the Licensor shall have no right to cancel the agreement and appoint any third party or enter into agreement with any party for the sale/ importation or manufacture of the products/ provision of services in the territory." Respondent, however, contends that the said agreement was preceded by a Memorandum of Understanding dated 1.11.2003. Respondent further contends that the said purported Memorandum of Understanding and licence agreement dated 8.05.2004 are vitiated by a fraud of a very large magnitude fructified by a criminal conspiracy hatched between M/s. K.P. Jayram Pillai and Vijay R. Singh representing the petitioner and M/s. C.H. Kim and B.K. Jung representing the respondent. The petitioner - company bribed the said C.H. Kim and B.K. Jung for the purpose of creation of the aforesaid documents. They had already been convicted and sentenced to undergo imprisonment by the Korean Criminal Court. It was contended that they misused their official position to a....
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....oner, in support of this application, would submit: (i) the execution of the agreement dated 8.05.2004 has not been denied or disputed. (ii) The correspondences have been passed between the parties between the period 8.05.2004 and 5.02.2005 and dispute arose in regard to the use of the logo 'L.G.' (iii) The arbitration agreement being a part of the contract, the validity or otherwise thereof can be gone into by the arbitrator in terms of Section 16 of the 1996 Act. (iv) Once an arbitration agreement is found to exist; having regard to Section 5 thereof, no judicial authority can exercise any jurisdiction in the matter. (v) This Court, having regard to the philosophy underlying the 1996 Act should uphold the arbitration agreement between the parties. Mr. R.F. Nariman, learned senior counsel appearing on behalf of the respondent, on the other hand, would submit: (i) in view of the Constitution Bench decision of this Court in SBP & Co. v. Patel Engineering Ltd. and Another [(2005) 8 SCC 618], this Court is obligated to go into the question as to whether the entire agreement is vitiated by fraud as a result whereof no valid arbitration agreement came into being. (ii) a fraud of....
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....ion agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. It is necessary to indicate that he can also decide the question whether the claim was a dead one; or a long barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection. It may not be possible at that stage, to decide whether a live claim made, is one which comes within the purview of the arbitration clause. It will be appropriate to leave that question to be decided by the arbitral tribunal on taking evidence, along with the merits of the claims involved in the arbitration. The Chief Justice has to decide whether the applicant has satisfied the conditions for appointing an arbitrator under Section 11(6) of the Act. For the purpose of taking a decision on these aspects, the Chief Justice can either proceed on the basis of affidavits and the documents produced or take such evidence or get such evidence recorded, as may be necessary. We think that adoption of this procedure in the context of the Act ....
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....on, the applicant herein was prohibited from taking any action in terms of the said agreement which would include the arbitration clause also. The order dated 21.01.2006 has become final. No appeal has been preferred thereagainst. The applicant could have filed an appropriate application for modification of the order of injunction which it did not choose to do. The doctrine of comity or amity required a court not to pass and order which would be in conflict with another order passed by a competent court of law. The courts have jurisdiction to pass an order of injunction not only under Order XXXIX, Rule 2 of the Code of Civil Procedure but also under Section 151 thereof. This aspect of the matter has been considered in 'A Treatise on The Law Governing Injunctions' by Spelling and Lewis' wherein it is stated : "Sec. 8. Conflict and Loss of Jurisdiction. Where a court having general jurisdiction and having acquired jurisdiction of the subject-matter has issued an injunction, a court of concurrent jurisdiction will usually refuse to interfere by issuance of a second injunction. There is no established rule of exclusion which would deprive a court of jurisdiction to issue an injunctio....
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....o give an interpretation to Section 8 under which bifurcation of the cause of action, that is to say, the subject- matter of the suit or in some cases bifurcation of the suit between parties who are parties to the arbitration agreement and others is possible. This would be laying down a totally new procedure not contemplated under the Act. If bifurcation of the subject-matter of a suit was contemplated, the legislature would have used appropriate language to permit such a course. Since there is no such indication in the language, it follows that bifurcation of the subject-matter of an action brought before a judicial authority is not allowed. Secondly, such bifurcation of suit in two parts, one to be decided by the Arbitral Tribunal and the other to be decided by the civil court would inevitably delay the proceedings. The whole purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by such procedure. It would also increase the cost of litigation and harassment to the parties and on occasions there is possibility of conflicting judgments and orders by two different forums." We are, however, not oblivious of the fact that Sukanya Holdings (s....