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5. The respondent made three payments totaling Rs.125 crores to the appellant under the Facilitation Deed during 2009 and did not make the balance payment. Instead, on 25.06.2010, the respondent wrote to the appellant rescinding the Facilitation Deed on the ground that it was voidable on account of misrepresentation and fraud. On 25.06.2010, the respondent also filed Suit No.1869 of 2010 for inter alia a declaration that the Facilitation Deed was void and for recovery of Rs.125 crores already paid to the appellant. On 28.06.2010, the appellant acting under Clause 9 of the Facilitation Deed sent a request for arbitration to ICC Singapore and the ICC issued a notice to the respondent to file its answer to the request for arbitration. In the meanwhile, on 30.06.2010, the respondent filed a second suit, Suit No.1828 of 2010, before the Bombay High Court against the appellant for inter alia a declaration that as the Facilitation Deed stood rescinded, the appellant was not entitled to invoke the arbitration clause in the Facilitation Deed. The respondent also filed an application for temporary injunction against the appellant from continuing with the arbitration proceedings commenced by the appellant under the aegis of ICC.

6. On 09.08.2010, the learned Single Judge of the Bombay High Court dismissed the application for temporary injunction of the respondent saying that it would be for the arbitrator to consider whether the Facilitation Deed was void on account of fraud and misrepresentation and that the arbitration must, therefore, proceed and the Court could not intervene in matters governed by the arbitration clause. The respondent challenged the order of the learned Single Judge before the Division Bench of the Bombay High Court and by the impugned order, the Division Bench of the Bombay High Court allowed the appeal, set aside the order of the learned Single Judge and passed an order of temporary injunction restraining the arbitration by ICC. Aggrieved, the appellant has filed this appeal.

9. Mr. Venugopal submitted that the Division Bench of the High Court, instead of examining whether the agreement in writing for arbitration was null and void, inoperative or incapable of being performed, has held that the entire Facilitation Deed was vitiated by fraud and misrepresentation and was, therefore, void. He vehemently submitted that it was for the arbitrator to decide whether the Facilitation Deed was void on account of fraud and misrepresentation as has been rightly held by the learned Single Judge and it was not for the Court to pronounce on whether the Facilitation Deed was void on account of fraud and misrepresentation. He referred to Article 6(4) of the ICC Rules of Arbitration which permits the Arbitral Tribunal to continue to exercise jurisdiction and adjudicate the claims even if the main contract is alleged to be null and void or non-existent because the arbitration clause is an independent and distinct agreement. He submitted that this principle of Kompetenz Kompetenz has been recognized in Section 16 of the Act under which the Arbitral Tribunal has the competence to rule on its own jurisdiction and on this point relied on National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd. [(2009) 1 SCC 267] and Reva Electric Car Company Private Ltd. v. Green Mobil [(2012) 2 SCC 93]. He submitted that as a corollary to this principle, Courts have also held that unless the arbitration clause itself, apart from the underlying contract, is assailed as vitiated by fraud or misrepresentation, the Arbitral Tribunal will have jurisdiction to decide all issues including the validity and scope of the arbitration agreement. He submitted that in the present case, the arbitration clause itself was not assailed as vitiated by fraud or misrepresentation. In support of this argument, he relied on the decision of the House of Lords in Premium Nafta Products Ltd. v. Fili Shipping Company Ltd. & Ors. [2007] UKHL 40], the decision of the Supreme Court of United States in Buckeye Check Cashing, Inc. v. John Cardegna et al [546 US 440 (2006)] and the decision of this Court in Branch Manager, Magma Leasing and Finance Ltd. & Anr. v. Potluri Madhavilata & Anr. [(2009) 10 SCC 103].

Contentions on behalf of the respondent:

14. In reply, Mr. Gopal Subramanium, learned senior counsel appearing for the respondent, submitted that the Division Bench of the Bombay High Court has rightly restrained the arbitration proceedings under the aegis of ICC as the Facilitation Deed, which also contains the arbitration agreement in Clause 9, is void because of fraud and misrepresentation by the appellant. He submitted that Section 45 of the Act makes it clear that the Court will not refer the parties to arbitration if the arbitration agreement is null and void, inoperative or incapable of being performed and as the respondent has taken the plea that the Facilitation Deed, which contained the arbitration agreement, is null and void on account of misrepresentation and fraud, the Court will have to decide whether the Facilitation Deed including the arbitration agreement in Clause 9 was void on account of fraud and misrepresentation by the appellant. He submitted that the respondent filed the first suit in the Bombay High Court (Suit No.1869 of 2010) for declaring the Facilitation Deed as null and void but in the said suit, the appellant did not file a written statement and instead issued the notice for arbitration only to frustrate the first suit and in the circumstances the respondent was compelled to file the second suit (Suit No.1828 of 2010) for an injunction restraining the arbitration.