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3. It appears that on or about 16th August, 1994 ITC filed a Suit, which was numbered as Suit No. 50/95, in this Court for a declaration that the Cooperation Agreement was not valid and binding on them. By a letter dated 5th January, 1995 the ICC informed the parties that in its session held on 4th January, 1995 the International Court of Arbitration has decided that the matter shall proceed for Arbitration and would be submitted to the sole Arbitrator. On receipt of this letter the ITC Limited on or about 31st January, 1995 filed an Application in Suit No. 50/95 for stay of the Arbitration proceedings pending the hearing and final disposal of the Suit. On 30th August, 1995 the ICC appointed Respondent No. 5 as the sole Arbitrator. On 9th October, 1995 ITC filed an Application before the Court for withdrawal of Suit No. 50/95. It was stated in the Application that in terms of Rule 8.3 of the ICC Rules of Conciliation and Arbitration should one of the parties raise one or more pleas concerning the existence or validity of the Agreement to arbitrate and should the International Court of Arbitration be satisfied of the prima facie existence of such an Agreement the Court may, without prejudice to the admissibility or merits of the plea or pleas, decide that the Arbitration shall proceed and in such a case any decision as to the Arbitrator's jurisdiction shall be taken by the Arbitrator himself. It was, therefore, stated in the Application that as the said Rule is deemed to be incorporated in the Arbitration Clause itself the ITC was agreeable to having the said issue regarding the existence and binding effect of the document dated 11th September, 1990 determined by the Arbitrator alongwith all other issues arising out of the claim made by Anands in the Arbitration proceedings and the defenses raised by the paries thereto. On this Application having been filed, the Suit being Suit No. 50/95 was dismissed as withdrawn.

34. Moreover under Section 41(b) of the Act, the Court shall have, for the purposes of, and in relation to, Arbitration proceedings, the same power of making Orders in respect of any of the matters set out in the second Schedule as it has for the purposes of, and in relation to, any proceedings before the Court. Under the second Schedule besides other powers, the Court has also the power to grant Interim Injunctions. The only thing the Court has to see at the time of granting Injunction is that such an Injunction is for the purpose of, and in relation to, Arbitration proceedings. Whether or not a stay of Arbitration proceedings is to be granted is, therefore, clearly a matter in relation to and for the purposes of Arbitration proceedings. The ITC in the present case has filed an Application under Sections 30 and 33 of the Arbitration Act challenging the legality and validity of the Agreement as well as the partial Award given by the Arbitrator. On such a Petition being filed, in our view, there was no impediment for the Court to consider the Application under Order 39 Rules 1 and 2 CPC for the grant of interim relief if the same was for the purposes of and in relation to the Arbitration proceedings. The Court having thus passed an Order staying the proceedings, in our view, the same was within its powers and it cannot be said that the Application was not maintainable only because the ITC had challenged the legality and validity of the Agreement as well as the Award. In the present case, the ITC has challenged the decision of the Arbitrator in the form of an Award which includes his decision on the validity of the Arbitration Agreement. We are, therefore, clearly of the opinion that the Application for stay was maintainable and the Order passed on this Application is an Order under the Act.

37. Before we deal with the Judgment in East India Hotels's case (Supra) it will be useful to refer to two Judgments of this Court in Subhash Chander Kakkar Vs. D.S.I.D.C., 1990 (2) Delhi Lawyer 21 and N. C. Bhalla and Others Vs. R. C. Bhalla and Others, 1990 (2) ALR 395. In Subhash Chander Kakkar Vs. D.S.I.D.C. (Supra) the Court was dealing with a Petition under Section 33 of the Arbitration Act wherein the Petitioner had prayed that the Court should declare that there was no legal, valid and subsisting Arbitration Agreement between the parties. In that Petition, an Application for stay of the Arbitration proceedings was also filed. The Court in that case held that admittedly, an Application under Section 33 of the Arbitration Act was filed and during the pendency of that Application, the Appellant had moved an Application for Interim Injunction. According to the Court, therefore, that could be done only by invoking the provisions of Section 41 of the Arbitration Act read with second Schedule. It was by virtue of these two provisions that in any Arbitration proceedings pending in Court, the Court gets jurisdiction to exercise powers under Order 39 of the Code of Civil Procedure. Therefore, when the Court passes an Order under Order 39 of the Code of Civil Procedure, during the pendency of any proceedings before it which have been commenced under any of the Section of Arbitration Act, the Court is in effect exercising its jurisdiction by virtue of provisions of Section 41 of the Arbitration Act. Section 39 of the Arbitration Act clearly specifies what are the appeal able Orders. An Order passed under Section 41 of the Act read with second Schedule and Order 39 Rules 1 and 2 CPC was held not to be an appeal able Order.

51. Mr. Sanghi has naturally objected to this contention and it is his submission that Arbitration being the chosen forum of the parties and the ITC having itself withdrawn its earlier challenge, agreeing to go before the Arbitrator to get all issues decided, there was no case made out for stay of proceedings. It is also his submission that the approach of the Court should be to save the Award rather than kill it and, therefore, the courts would lean in favour of saving the Award rather than rejecting it. He submits that no Injunction Order can be passed to frustrate the Arbitration proceedings but can be passed only for the purpose of and in relation to Arbitration proceedings. It is also submitted by him that domestic Court should not stay International Arbitration proceedings.