| Content Provider | Supreme Court of India |
|---|---|
| e-ISSN | 30484839 |
| Language | English |
| Access Restriction | NDLI |
| Subject Keyword | Power to refer parties to arbitration s.8 Arbitration and Conciliation Act 1996 |
| Content Type | Text |
| Resource Type | Law Judgement |
| Jurisdiction | India |
| Act(s) Referred | Arbitration and Conciliation Act, 1996 (26 of 1996) |
| Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 |
| Case Type | Appeal |
| Court | Supreme Court of India |
| Disposal Nature | Appeal Allowed |
| Headnote | Arbitration and Conciliation Act, 1996 – s.8 – Power to refer parties to arbitration where there is an arbitration agreement – RPIL appointed the appellant company as its clearing and forwarding agent for period of 3 years by agreement dated 01.05.1997 – The said agreement contained arbitration clause – RPIL informed appellant that it was getting merged with respondent Company-NPIL and therefore, the subsisting agreement between them stood terminated – Appellant filed suit contending that agreement with RPIL was valid, subsisting, legal and continuing – In the said suit, parties compromised the matter – In terms of the said compromise, respondent made payment of Rs. 23,50,000/- to the appellant and also as a part of compensation package appointed the appellant as its stockist for their products – Again, dispute arose between the parties – Respondent filed criminal complaint u/ss.420, 406, 409 and 403 r/w. 34 IPC against the appellant – Appellant filed money suit against the respondent claiming compensation for rupees twenty crores alleging financial loss and loss of goodwill – Respondent filed application u/s.8 of the Act for referring the parties to arbitration in money suit, relying upon the Arbitration clause in agreement dated 01.05.1997 – Trial Court dismissed the application u/s. 8 of the Act – In revision, High Court referred the dispute to arbitration – On appeal, held: On perusal of the compromise deed, it is clear that the parties have substituted a new agreement by way of compromise – When parties have settled their differences and compromised the matter, in the dispute subsequently arising between the parties, arbitration clause in the prior agreement cannot be invoked – Since, the agreement dated 01.05.1997 and compromise are different, the arbitration clause in agreement dated 01.05.1997 cannot be read into the terms of the compromise as per which the parties have entered into a new arrangement – Further, since respondent has also challenged the compromise decree alleging it was obtained by inducement and fraud, in view of the same, the parties cannot be referred to arbitration – The High Court erred in proceeding under the footing that dispute falls within the ambit of agreement dated 01.05.1997 – Thus, impugned judgment of the High Court set aside. |
| Judge | Hon'ble Ms. Justice R. Banumathi |
| Neutral Citation | 2019 INSC 827 |
| Petitioner | Zenith Drugs & Allied Agencies Pvt. Ltd. Represented By Its Managing Director, Shri Uday Krishna Paul |
| Respondent | M/s. Nicholas Piramal India Ltd. |
| SCR | [2019] 10 S.C.R. 360 |
| Judgement Date | 2019-07-30 |
| Case Number | 4430 |
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