Indian Kanoon - Search engine for Indian Law

8. He submitted that the relationship between the parties is of a commercial nature and when the agreement resulting in such a relationship provides for arbitration in the case of any differences arising out of such a relationship, then, the only course available is that such differences should be referred to the arbitration as agreed upon. It is more so, in the case of a foreign arbitration as held by the Supreme Court in R. M. Investment and Trading Co. (P.) Ltd. v. Boeing Co. [1994] 80 Comp Cas 588 ; [1994] 4 SCC 541 in which the Supreme Court taking this view, stayed the proceedings under Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961, pending the arbitration proceedings. For the same proposition he relied on Svenska Handelsbanken v. Indian Charge Chrome Ltd. [1994] 79 Comp Cas 589 ; [1994] 2 SCC 155 wherein at para. 43, the apex court held that the right to foreign arbitration provided by Parliament is an indefeasible right in which the court does not have any kind of discretion. He also pointed out, referring to the Singaran Coal Syndicate Ltd. v. Balmakund Marwari, AIR 1931 Cal 772, wherein the court held that if matters which are agreed to be referred are mixed up in an action with matters not agreed to be referred, there is no reason why the matters agreed to be referred should not be referred for arbitration leaving the action to go on as to the other matters. This principle, he submitted, had also been followed by the Company Law Board itself in two of the cases referred to by him earlier. He further submitted that reference to arbitration can be refused only when there are matters outside the arbitration agreement or where fraud, falsification of documents or forgery is alleged or where the claims of the plaintiff are based on matters foreign to the original agreement. He pointed out that the Jammu and Kashmir High Court has taken a similar view in Union of India v. Lakshmi Ice Factory, AIR 1964 J&K 10. Therefore, he submitted that the legal position is if the parties had decided to choose their own forum consciously, then, the court is bound to refer them to the forum chosen by them once it is established that the matters under consideration arise out of and in connection with an arbitration agreement.