Judgment

TULZAPURKAR, J.:- These two appeals raise the following two questions for our determination :

1 . Whether under Sec. 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961, having regard to its scope, a suit in the nature of a petition under sec. 33 of the Arbitration Act, 1940 could be stayed? If, so whether the Ist Respondents have made out a case for staying the Appellants suit No. 832 of 1982?

2. Whether the three claims referred by the Ist Respondents to the Court of Arbitration of the 2nd Respondents are beyond the scope of the, Arbitration Clause being Article XVII contained in the Contract dated August 24, 1964 or they are "arising out of or related to" the said Contract?,

2. The facts giving rise to the aforesaid two questions may be stated. The Appellants, Renusagar Power Company Limited (for short Renusagar) are a company incorporated under the Companies Act, 1956 having their Registered Office at Renukoot, District Mirzapur in Uttar Pradesh. The Ist Respondents, General Electric Company (for short G. E. C.) are a company incorporated under the laws of the State of New York and carry on their business inter alia at 570, Lexington Avenue, New York, U. S. A. The 2nd Respondents are the International Chamber of Commerce (Court of Arbitration) (for short I. C. C.) having their registered office in Paris, France.

3. By a contract in writing dated August 24, 1964 (bearing Ref. IGE. 9584) G. E. C. agreed to sell to Renusagar equipment for a thermal electric generating plant to be erected at Renukoot on the terms and conditions set out therein. The work to be performed under the contract included the supply of equipment, spare parts and services in accordance with the Proposed Specifications dated November 11, 1963 and contained in G. E. C.s letter dated October 14, 1963 together with the attached Minutes of the Meeting of October 10, 1963. The total purchase price, called the Contract Base Price for all the work was $ 13,195,000/- payable by Renusagar in lawful currency of the U. S. A. in the manner stipulated in the Contract. It appears that the parties intended that delivery of the equipment and spare-parts etc. would be completed within 15 months of the Contract Effective Date (which was December 31, 1964), i.e. up to March 30, 1966 and that the erection of the plant would be completed within 16th to 30th Month (i.e. from April 1, 1966 to June 30, 1967) and that the plant would be fully operational by the end of 30th month from the Contract Effective Date. The parties therefore, agreed that substantial payment of the purchase price by Renusagar should commence when the plant became operational, i.e. by June 30, 1967; it was also agreed that no interest would be payable by Renusagar during the delivery period, that interest shall be paid during the erection period (i.e. 16th to 30th Month) and thereafter till. payment but the interest during the erection period would be capitalised and added on to the principal. Accordingly, Art. III of the Contract stipulated that initially 10 of the total Contract Base Price (the amount coming to U. S. $ 1,319,500/-) should be paid either in cash or by means of a Letter of Credit within 30 days of the Contract effective date and that the balance of 90 of the purchase price plus interest at 6-1/2 per annum from 16th to 30th month aggregating to U. S. $ 12,776,058.75 ($ 11,875,500/- for principal plus $ 900,558.75 being the capitalised interest at the aforesaid rate for the aforesaid period) should be paid in accordance with the schedule of payments set out therein. The schedule for the payment of the said balance of 90 of the purchase price provided for payment to be made in sixteen six-monthly instalments of U. S. $ 798,503.68 each, the first of such instalments being payable on 30-6-1967, the second on 3 1- 12-1967, the third on 30-6-1968, the fourth on 31-12-1968 and so on with the last instalment failing due on 31-12-1974. The obligation to make such payment was to