TaxTMI 
TaxTMI 
2009 (12) TMI 1011
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing defendant No. 1 from continuing with the arbitral proceedings. 3. The appellant herein has instituted the said suit for a declaration that it has validly cancelled the contract (Annexure A to the plaint) and hence it is not bound to take the third and final shipment there under. The plaintiff has also prayed for a declaration to the effect that the certificates issued by the second defendant in connection with the quality of the goods are fraudulent and the same are issued in connivance with defendant No. 1 and the same are not binding and enforceable against the plaintiff. The plaintiff has also prayed that defendant No. 1 may be restrained by a perpetual injunction as well as by an anti suit injunction from initiating or instituting any suit or proceedings or arbitration proceeding or continuing with the same in any forum with respect to or in connection with the first or the second contracts. In the said suit, the plaintiff also claimed interim injunction restraining defendant No. 1 from initiating or instituting any suit or proceeding or arbitration proceeding or continuing the same in connection with the first contract or the second contract, copies of which are annexed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uld grant interim injunction prayed for by restraining defendant No. 1 from proceeding further with the arbitration. Learned Counsel further submitted that in view of the decision of the Supreme Court in the case of Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya and Anr. (2003) 5 SCC 531 the arbitration proceedings should not be allowed to proceed further as it may result into multiplicity of proceedings. The learned Counsel for the appellant further submitted that the quality of the goods supplied by defendant No. 1 was not upto the mark and the same were of inferior quality and defendant No. 2, who certified the quality of the goods, has given false certificates in collusion with defendant No. 1. It is submitted that defendant No. 2 has falsely given such certificates and, therefore, the suit for damages is filed against defendant No. 2 and the suit against No. 1 is filed in connection with the breach of contract for supplying inferior quality of the goods. Learned Counsel further submitted that ultimately even Arbitral Tribunal is required to consider the said aspect in the arbitral proceedings instituted by respondent No. 1 and, therefore, in the interest of justice, respondent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....im injunction. Mr. Bhatt has taken us to various documents in the form of emails to justify his say that the ground raised by the plaintiff is absolutely dishonest and only with a view to deprive the legitimate claim of defendant No. 1 towards the goods that these vexatious proceedings have been instituted in the form of present suit. 7. Mr. Bhatt has further submitted that though defendant No. 2 has nothing to do with the present proceedings, only with a view to see that the plaintiff can take benefit of the judgment of the Supreme Court in the case of Suknya (supra) that the plaintiff has joined defendant No. 2 in the suit as according to the learned Counsel, the contract is entered into between the plaintiff and defendant No. 1 and defendant No. 2 is not a contracting party in any manner and if the suit is dismissed against defendant No. 1, naturally no relief can be given defendant No. 2 in any manner. Mr. Bhatt submitted that if the parties are not allowed to proceed further with the arbitration, the international arbitration will be frustrated. 8. We have heard the learned Counsel appearing for the parties are great length. We have gone through the necessary documents a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on making correspondence with the plaintiff regarding the dispute in connection with the fourth shipment and a letter was written on 5th December, 2008 wherein defendant No. 1 has stated thus: We received your letter dated December 4, 2008 (Ref: JSW:MUM:COMML:200809) with great disappointment. Frankly speaking, we were quite shocked by your letter, because we thought we were having a mutual discussion with you about the treatment of the final shipment. Despite of our proposal, upon many discussions with the shipper, your letter denies all our past correspondences. As we repeatedly advised, we are not in a position to accept any of your claims related to the past delivered cargoes. We have fulfilled our contractual obligation to quality pursuant to Article 4 of the contract. On top of that, we have never admitted that our coal is not a coking coal. We cannot allow you to use our discussion on October 8, 2008 at your office with malicious intent. We would like to know your real intention immediately. As informed, we have received several letters from the shippers' attorney. The shipper declared that they would initiate arbitration process again....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uired to be referred to the arbitrator. Further, the matter is not required to be referred to the Arbitral Tribunal, if (1) the parties to the arbitration agreement have not filed any such application for referring the dispute to the arbitrator; (2) in a pending suit, such application is not filed before submitting first statement on the substance of the dispute; or (3) such application is not accompanied by the original arbitration agreement or duly certified copy thereof. This would, therefore, mean that the Arbitration Act does not oust the jurisdiction of the civil court to decide the dispute in a case where parties to the arbitration agreement do not take appropriate steps as contemplated under Sub-sections (1) and (2) of Section 8 of the Act. 13. Secondly, there is no provision in the Act that when subject matter of the suit includes subject matter of the arbitration agreement as well as other disputes, the matter is required to be referred to arbitration. There is also no provision for splitting the cause or parties and referring the subject matter of the suit to the arbitrators. 12. It is required to be noted that considering the scheme of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itional parties are there, the arbitration proceedings should not go on. Ultimately each case is required to be decided on its own merits. At this stage reference is required to be made to a decision of the Supreme Court in the case of Modi Entertainment Network and Anr. v. W.S.G. Cricket Pte. Ltd. (2003) 4 SCC 341 In the said case, while examining the question about anti injunction, the Supreme Court has observed as under. 23. Our attention was also invited to a decision of the Court of Appeal in SABAH Shipyard (Pakistan) Ltd. v. Islamic Republic of Pakistan and Karachi Electrics Supply Corporation. Ltd. (2002) EWCA Civ 1643 (CA). In that case SABAH, a limited company incorporated in Pakistan by its Malaysian parent, entered into an agreement with a State owned Corporation KESC, in regard to the design, construction, operation and maintenance of a bargemounted electricity generation facility at Karachi. The Government of Pakistan (GOP) entered into a guarantee in favour of SABAH which, inter alia, provided that the parties consented to the jurisdiction of the courts of England for any action under the agreement to resolve any dispute between them and wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....clined, the ends of justice will be defeated and injustice will be perpetuated; and (c ) the principle of comity - respect for the court in which the commencement or continuance of action/proceeding is sought to be restrained - must be borne in mind. (2) In a case where more forums than one are available, the court in exercise of its discretion to grant antisuit injunction will examine as to which is the appropriate forum (forum conveniens) having regard to the convenience of the parties and may grant antisuit injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens. (3) Where jurisdiction of a court is invoked on the basis of jurisdiction clause in a contract, the recitals therein in regard to exclusive or nonexclusive jurisdiction of the Court of choice of the parties are not determinative but are relevant factors and when a question arises as to the nature of jurisdiction agreed to between the parties the court has to decide the same on a true interpretation of the contract on the facts and in the circumstances of each case. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther interim injunction can be granted restraining respondent No. 1 from proceeding before the Arbitral Tribunal at London. So far as the judgment in Modi's case (supra) is concerned, the Supreme Court has considered the question about anti suit injunction in connection with the suit and other proceedings pending before the Court and the point in issue regarding proceeding before the Arbitral Tribunal was not the subject matter. It is required to be noted that in the Act of 1996, there is no such provision for granting such an injunction and even as per the provisions of Section 8 of the Act of 1996, it is provided that during pendency of such application, even proceedings before the Arbitral Tribunal cannot be stayed. As pointed out earlier, the present case is not in connection with the proceedings under Section 8 of the Act of 1996. Simply because some parties are joined in the suit is no ground for granting injunction from proceeding further with the arbitration. Defendant No. 1 is, therefore, entitled to proceed with the arbitration in view of the clear cut agreement between the parties. 15. In this connection, reference is also required to be made to the observations o....