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26. It is stated by the respondent Nos. 2 & 3 that the legal principle regarding the novation of a contract which states that an arbitration clause in an agreement cannot survive if the agreement containing the arbitration clause has been superseded/novated by a later agreement is applicable in the instant case as, without prejudice, even if it is presumed that MoU was validly executed between the then shareholders of the Company, the then shareholders put an end to it as if it had never existed and substituted a new SHA for it. In other words, it is stated that arbitration clause of the original contract perished with it and is replaced by a new dispute resolution mechanism including arbitration in terms of Clause 16 of the SHA and the instant petition accordingly lacks the jurisdiction, since the arbitration, if any, needs to be invoked as per the Clause 16 of the SHA, which provides for arbitration in accordance with the rules of London Court of International Arbitration and the place of arbitration being London.

65. It is plea of the Counsels that subsequent to Reuter's introduction to the Company through execution of SPA as well as SHA, any previous arrangement between the then shareholders were superseded by the new shareholders agreement in terms of clause 28 of the SHA. And since, as per Clause 28 of the SHA any or all prior agreements, arrangements etc. are superseded the fundamental question which needs to be decided by this Court before referring the parties to the Arbitration is the validity and existence of a contract having an arbitration clause which has been novated / superseded as the parties cannot invoke a clause which has been perished with a new subsequent understanding/contract i.e., once a contract/agreement has been superseded or extinguished by a subsequent contract/agreement, the arbitration clause being a component of the superseded contract/agreement stands superseded along with the terms of superseded contract/agreement. Further, it is submitted by them that issue of novation/supersession is not a preliminary issue and beyond the jurisdiction of the Arbitrator under Section 16 of the Act as the Arbitrator under section 16 of the Act is not empowered to decide upon any issue if the appointment of the Ld. Arbitrator itself is on the basis of a novated arbitration clause which had become void along with the original contract. Reliance has also been placed on Section 62 of the Indian Contract Act, 1872 ('Contract Act', for short) to contend that when the main agreement is novated, rescinded or altered, it loses its validity and the arbitration agreement becomes void as the principle is that if the contract is superseded by another, the arbitration clause, being a component part of the earlier contract, falls with it. In this regard they have relied upon two Apex Court judgments in Union of India v. Kishorilal Gupta AIR 1959 SC 1362, Young Achievers v. IMS Learning Resources Pvt. Ltd., (2013) 10 SCC 535 and a Division Bench judgment of this Court in Samyak Projects (P) Ltd. v. Ansal Housing & Construction Ltd., FAO (OS) No. 33 of 2019. In other words, it is the submission of the Counsels that the only valid existing arbitration agreement between the shareholders of the Company being clause 16 of the SHA, and the proceedings envisaged being an international commercial arbitration, Supreme Court is the Court designate as per provisions of Section 11(9) of the Act and since the then shareholders and signatories of alleged MoU have subsequently given their consent to supersede all prior agreements as per Clause 28 of the SHA, Clause 12 of the alleged MoU is not an existing and/or valid contract moreover an Arbitrator cannot under Section 16 of the Act adjudicate upon novated/superseded contract/arbitration agreement.

66. The Counsels have relied upon the Supreme Court judgments in United India Insurance Company Ltd. & Anr., v. Hyundai Engineering and Construction Company Ltd. & Ors., 2018 (17) SCC 607 as well as on Garware Wall Ropes Limited v.

Coastal Marine Construction and Marine ltd., 2019 (9) SCC 2019, wherein reference to arbitration was rejected owing to invalidity of the arbitration clauses to contend that the scope of enquiry under Section 11 of the Act was expanded by the Apex Court to look into the validity of the arbitration agreement as the jurisdiction of the Arbitrator was dependent on the existence of the arbitration clause. They also sought to differentiate the judgment relied upon by the petitioner in Duro Felguera S.A.(supra) by stating that the said judgment while narrowing the scope of Section 11(6A) inserted by the Amendment Act of 2015 to prima facie satisfaction of existence of arbitration agreement had also held that while ascertaining the existence of a valid arbitration clause the Court has to determine the fundamental question of novation/suppression of the arbitration agreement by subsequent agreement. He also stated that the Supreme Court in Mayavati Trading Pvt. Ltd. (supra) even though Duro Felguera S.A. (supra) was followed the fundamental issue of novation/supersession which falls under the jurisdiction of the Court designate while deciding the petition under Section 11 of the Act was not gone into. In other words, it is his submission that as per Section 11 (6A) of the Act, Court's scope of inquiry requires to determine the fundamental issue of novation/supersession which is important before declaring any arbitration agreement valid/existing.

"62. Effect of novation, rescission, and alteration of contract--If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed. --If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed."

94. The Apex Court in Union of India v. Kishorilal (supra), also relied upon by respondent Nos. 1 & 2, wherein owing to the execution of settlement contracts and respondents therein failing to adhere to the terms, it was held that the appellants could not refer the dispute to arbitration on the basis of the arbitration clauses under the original contracts entered into between the parties due to novation. The relevant portion of the judgment reads as under: