THE ARBITRATION CLAUSE BETWEEN THE PARTIES IS LEGAL AND

BINDING

It is humbly submitted in the honorable court that the arbitration clause is legal and valid because

[A] the agreement is valid, [B] There is party autonomy, [C] The arbitration seat can be chosen by

the parties, [C] The arbitration seat can be chosen by the parties and because [D] part one of the

act can be excluded.

THE AGREEMENT IS VALID

Section 45,1 which deals specifically with foreign arbitrations requires a court to refer a party to

arbitration unless the court finds that the arbitration agreement is null and void, inoperative or

incapable of being performed. Section 45 contains a non-obstante clause and a court may entertain

an application to be referred to arbitration if there exists a valid arbitration clause. This provision

is in line with Article II (iii) of the New York Convention which deals with the validity of an

arbitration agreement. So, Indian courts are vested with the discretion of granting an interim

injunction to stop the arbitral proceedings if any of the grounds of Section 45 are satisfied.

However, in the case of Havels India Ltd. vs Electrium Sales Ltd.,2 it was stated that Court is

required to have a prima facie view of the existence and validity of an arbitration agreement. In

the present case, prima facie, there is an agreement between the parties containing an arbitration

agreement. Further, the appropriate forum to raise any jurisdictional objection on merits, regarding

1
Section 45, The Arbitration and Conciliation Act, 1996. ( India).
2
Havels India Ltd. vs Electrium Sales Ltd., (OS) No. 2221/2012 (decision dated 16.04.2013).
the existence of the arbitration agreement, would be the arbitral tribunal. The agreement is thus

valid.

THERE IS PARTY AUTONOMY

The very existence of a jurisdiction clause in an agreement makes the intention of the parties to an

agreement quite clear.3 When parties have chosen arbitration as their preferred mode of dispute

resolution party autonomy needs to be respected and given full play. Thus, the scope of section 45

should be kept to minimum possible, and the phrase 'valid, operative and capable of being

performed', should be read as analogous terms extending to only the prima facie review to be

done.4 Party autonomy is held to be paramount in deciding the seat for arbitration.5

The agreement being valid, the terms of the agreement should be respected. Since the intention of

the parties to refer to Arbitration for resolution of their disputes has been established, party

autonomy shall be given due respect and paramount importance. According to the agreement

signed, it is the will of the parties to proceed with arbitration. It is humbly requested that it shall

be respected and no suit shall be allowed.

THE ARBITRATION SEAT CAN BE CHOSEN BY THE PARTIES

When two Indian parties had willingly entered into an agreement in relation to arbitration, the

contention that a foreign seated arbitration would be opposed to Indian public policy was

untenable. Section 28 of the Indian Contract Act, 1872 read with the Exception 1 would not be a

bar to a foreign seated arbitration. It is not against the public policy of India when two Indian

3
Swastik Gases Private Limited vs. Indian Oil Corporation, (2013) 9 SCC 32.
4
Sasan Power Ltd vs. North America Coal Corporation India Pvt Ltd, (2016) SCC Online SC 855
5
Ibid
parties contract to have a foreign-seated arbitration.6Where the parties had agreed to resolve their

disputes through arbitration, the courts were to give effect to the intention of the parties and

interfere only when the agreement was null or void or inoperative,7 which is not the case in the

present agreement.

Thus, it is respectfully submitted that the choice of a foreign seat of arbitration made by the parties

is valid. It is not against the public policy if the state of Modus. They havent abandoned the laws

of Modus but are consenting to the jurisdiction of a foreign seat of arbitration. Even, in Reliance

Industries v Union of India,8based on the 1996 Act, the Indian parties were allowed to deviate

from domestic curial law by choosing to arbitrate in London.

PART I OF THE ACT CAN BE EXCLUDED

Courts have observed that once parties by mutual agreement had agreed to resolve their disputes

by a foreign-seated arbitration, Part I of the Act would not apply.9 Further where the agreement

fulfilled the requirements of Section 44, provisions of Part II of the Act would apply. It was held

that a court, under Section 45, would have to refer parties to arbitration where it was found that

the agreement was not null or void or inoperative.10

In Sasan Power Ltd v. North America Coal Corporation India Pvt Ltd11 the court clarified the

same stating that when the seat of arbitration is outside India, the conflict of law rules of the

6
Atlas Exports Industries vs. Kotak & Company, (1999) 7 SCC 61.
7
Chatterjee Petroleum vs. Haldia Petro Chemicals, (2013) ARBLR 456 SC.
8
Reliance Industries vs. Union of India, (2014) 7 SCC 603.
9
Delhi Airport Metro Express Pvt. Ltd. vs. CAF India Pvt. Ltd, IA 10776/2014 in CS (OS)
1678/2014.
10
Ibid
11
Sasan Power Ltd vs. North America Coal Corporation India Pvt Ltd, (2016) SCC Online SC
855.
country in which the arbitration takes place would have to be applied and it would not be an

arbitration under Part I of the Act.

Therefore, it is respectfully submitted that Article 7.3 of the Arbitration Clause, which provides

that the seat of arbitration to be outside Modus (i.e. Sonipur) is also legal and enforceable. The

parties cannot be said to have committed any fault by exclusion of the part 1 of the Arbitration and

Conciliation Act as the proceedings are in the nature of international commercial arbitration only

and not the domestic or local arbitration and as per the provisions of the Arbitration Act, Part I of

the Act is applicable only where the place of arbitration is in India. If the defendant is allowed to

pursue arbitration (under the Arbitration Clause) in Sonipur, the provisions of Part II will be

applicable.

THE COURT HAS NO JURISDICTION IN THE PRESENT MATTER

The Kompeten z- Kompetenz rule allows an arbitral tribunal to rule on its own jurisdiction.By

putting a stop to an arbitration, the court would be encroaching on the power of Kompetenz-

kompetenz (which is a well-accepted principle in arbitration) of an arbitral tribunal.12However,

Section 4513 contains a non-obstante clause and a court may entertain an application to be referred

to arbitration if there exists a valid arbitration clause. In the case of Bharti Televentures v. DSS

Enterprises,14 it was held that the intention of the legislature in Section 45 was to oust the

jurisdiction of a court to intervene during an arbitral proceeding. Further, in Cultor Ford Science

v. Nicholas Piramal,15 the Andhra Pradesh High Court refused to grant an injunction against

arbitration under the LCIA Rules as the parties had willingly entered into the agreement and had

12
Fiona Trust and Holding Corp vs. Yuri Privalov, (2016) EWHC 2163.
13
Section 45, The Arbitration and Conciliation Act, 1996.
14
Bharti Televentures vs. DSS Enterprises, (2005) 2 ARBLR 561 Delhi.
15
Cultor Ford Science vs. Nicholas Piramal, (2002 1 ALD 154.
spent a considerable amount of money in participating in the proceedings.Therefore, it is humbly

submitted before the court that the suit for an anti-arbitration injunction is not valid. The validity

of an arbitration clause is to be determined on a prima facie basis and in the present, the agreement

is valid. The courts, thus have no jurisdiction to adjudge the dispute and matter shall be referred to

the Arbitration tribunal, as agreed in the agreement between.