Judgement

AHMADI, J.:- Special leave granted.

2. The principal question which this Court is called upon to answer in this appeal by special leave is whether the arbitration clause contained in Art. XII (paragraph 12. 1) of the Technical Collaboration Agreement entered into at Dubai, United Arab Emirates, on September 25, 1984, between the appellant Burn Standard Company Ltd., a Government of India Undertaking, and the respondent McDermott International Inc., a foreign company, is rendered void by virtue of the agreement itself being ab initio void for want of general or special permission of the Reserve Bank of India (RBI) under S. 28 of the Foreign Exchange Regulation Act, 1973 (FERA). The relevant part of the said provision reads as under:

"28(1)- Without prejudice to the provisions of S. 47 and notwithstanding anything contained in any other provision of this Act or the Companies Act, 1956, a person resident outside India (whether a citizen of India or not) or a person who is not a citizen of India but is resident in India, or a company (other than a banking company) which is not incorporated under any law in force in India or in which the non-resident interest is more than forty p