The Court emphasized the importance of leaving certain matters, such as the validity and enforceability of agreements, to be decided by the Arbitral Tribunal, and declined to interfere with the High Court's decision.

JUDGMENT

P.K. BALASUBRAMANYAN, J.

1. Leave granted.

2. M/s Kalinga Mining Corporation, a partnership

firm bearing registration No. 71/1949, came into existence on 10.12.1949. During the years from 1973 to 1980, the firm obtained three mining leases from the State Government. The partnership firm was reconstituted in the year 1980, taking in some additional partners, again in the year 1991 and yet again in the year 1994.

3. On 14.3.1991, the firm entered into an agency agreement with the appellant, a private limited company for a term of 10 years. Thereby, the appellant was engaged as a raising contractor in respect of the mines for which the firm had obtained leases from the State Government. On 25.3.1991, the firm executed an irrevocable Power of Attorney in favour of the appellant authorizing it to administer the mines and sell the iron ore extracted therefrom.

4. On 13.3.2001, the term of 10 years fixed in the agency agreement expired. New terms were negotiated between the parties and on 22.9.2001, the agreement was extended for a period of three years commencing from 14.3.2001. The term was to end with 31.3.2003. Again, on 3.9.2003, the term of the agreement was extended for a further period of three years commencing from 1.4.2003. Thereby, the period was to end with 31.3.2006.

5. The appellant sought a further extension of the term of the agency agreement. Apparently, the firm was not willing for an extension. Certain disputes thus arose and by letter dated 19.11.2005, the appellant-company sought resolution of the said disputes. The appellant-company followed this up by a letter dated 9.12.2005 invoking the arbitration clause in the agency agreement and nominating Mr. Sanjeev Jain as its arbitrator in terms of the arbitration agreement.

6. It is seen that the respondent firm, for reasons best known to itself, sought for and got a fresh registration on 24.12.2005 and a firm having the same name was again registered and assigned registration No. 595/2005. Prima facie, this was unwarranted and the excuse put forward was that the partners, some of whom were partners even originally, could not trace the papers relating to the registration of the firm in the year 1949. Be that as it may, on receipt of the communication in that behalf from the appellant-company nominating an arbitrator, the firm in its turn named an arbitrator. In terms of the arbitration clause, the arbitrators had to name the Presiding Arbitrator. In spite of lapse of time, the arbitrators did not meet and nominate a Presiding Arbitrator. In that context, the appellant-company filed a petition under Section 11(4)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as, "the Act") requesting the Chief Justice of the High Court of Orissa to appoint the third arbitrator on the basis that the firm had failed to act in terms of the procedure agreed to by the parties. The said application is said to be pending.

7. The appellant-company also moved an application under Section 9 of the Act before the District Court, Cuttack seeking interim relief essentially to permit it to continue to carry on the mining operations and to restrain the respondent firm from interfering with it. According to the appellant, the agreement between the parties was co-terminus with the subsistence of the mining lease granted by the State in favour of the respondent firm and since the leases continue to subsist, the appellant-company was entitled to an extension of the period of the contract and what remained was only a negotiation regarding the terms at which the agreement has to be worked by the appellant-company. The appellant further pleaded that it had made all the investments for the purposes of carrying on the mining operations and had brought in the requisite machinery for that purpose. All the necessary investments had been made by it and in that situation, the balance of convenience was in favour of the grant of an interim order as sought for by the