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14 The argument of Mr. Khambata, in the first place, presupposes that assignment of an arbitration agreement is not permissible and the assignee cannot claim any right thereunder. There is nothing in law to suggest that 14 (2004) 7 SCC 1 Chittewan 17/22 901. ARBP 708-14.doc an arbitration agreement is not assignable. In fact, both Indian and English Courts have always held it to be assignable by its very nature. If a contract is assignable, the arbitration clause contained in it does not make it unassignable; the arbitration clause, on the other hand, would follow the assignment of the underlying contract. Besides, in the particular case we are dealing with here, the contract contained in the MoU (of which the arbitration clause is a part) is in terms assignable. The MoU specifically provides for it. If that is so, there could really be no objection to assignment of the contract; and any such assignment would clearly have the effect of assignment of the arbitration clause contained in the contract, the assignee being both bound by, and entitled to claim under, it.

15 Delhi High Court has, in Triveni Engineering Industries Limited Vs. Dasuya Co-operative Sugar Mills Ltd15 and Punjab State Industrial Development Corpn. Ltd. Vs. Triveni Engineering Industries Limited 16, held that if a contract describes a party as a 'purchaser' and defines that expression to include all successors and assigns, the arbitration agreement contained in it would follow the assignment of the contract.

16 Russel on Arbitration states the law thus (19th Edn. Pg.69) :

17 (2009) 148 Com Cases 809 (Bom) 18 Arb. Petn. 509 of 2011 dated 20 July 2016 Chittewan 19/22 901. ARBP 708-14.doc 18 Mr. Khambata cannot point out any provision or principle of law or authority to contest this position. He, however, relies on the case of Chloro Controls (supra) to suggest otherwise. In Chloro Controls, the invocation of an arbitration agreement was under Section 45 of the Act by a non-signatory, and the Supreme Court was called upon to consider permissibility of an arbitration reference between a signatory and a non- signatory or third party to the arbitration agreement. The entire discussion on this point in that case is in the context of principles of "group of companies" or "composite performance" and not assignment of an arbitration agreement. Mr. Khambata lays emphasis on the distinction drawn by the Supreme Court between Section 45 of the Act on the one hand and Section 8 on the other. The Court had observed that Section 8 of the 1996 Act used the expression "parties" simplicitor without any extension, whereas, in a significant contradistinction, Section 45 used the expression "one of the parties or any person claiming through or under him". The court was of the view that this aspect could not be ignored; due weightage had to be given to the legislative intent; and Section 45 had to be interpreted liberally. Nothing in this discussion rules out the invocation of an arbitration agreement by an assignee of a party under Section 8. A judgment, it is trite to say, is an authority for the proposition it decides or bases its decision on, and not for what follows logically from it. What the Supreme Court decided or based its ruling on was the wide construction to be given to Section 45 of the Act and allowing it to be invoked by parties claiming under parties to arbitration agreement. Merely because the court, whilst construing the amplitude of Section 45, contrasted it with Section 8, it cannot be said to have laid down any proposition of law that Section 8 is restrictive in that it does not admit of its invocation by an assignee to an Chittewan 20/22 901. ARBP 708-14.doc arbitration agreement.