1. This writ petition is filed by plaintiff Nos.1 and 2 against the order dated 29th August, 2017 on I.A.2 made in O.S. No. 25848/2017 on the file of XXVI Additional City Civil and Sessions Judge allowing the application filed by defendant No. 1 under Section 8 r/w Section 5 of the Arbitration and Conciliation Act, 1996 (for short, hereinafter referred to as ‘the Act’) to refer the matter for arbitration and to dismiss the suit.

I - THE BRIEF FACTS OF THE CASE

2. The petitioners, who are the plaintiffs before the trial Court filed a suit for declaration that defendant Nos.1 to 4 in deliberate gross violation of sub-contracting and manufacturing agreement dated 7.9.2015, manufactured winches in Sweden and made direct supplies of winches to defendant Nos.5 and 6 as illegal, null and void; for permanent injunction restraining defendant Nos. 1 to 3 supplying the winches through their agents, henchmen, workmen, nominees, assignees and any other persons acting through them in any manner of supplying and delivering the winches to defendant Nos.5 and 6 and for mandatory injunction directing defendant Nos. 1 to 3 to take deliveries of winches from them and or supply to defendant Nos.5 and 6 as accorded to terms and conditions agreed upon.

3. It is the case of the petitioners that plaintiff No. 1 is a registered company under the Companies Act, 1956 represented by its Managing Director Shri S.R. Venkatesan – plaintiff No. 2. Plaintiff No. 1 being a reputed company presently was engaged in manufacture, Assemble and Supply of Automotive components, Winch Systems, Vehicle body building and imparting Skill Training activities to unemployed youth in Automotive Sector. On account of the efforts made by the plaintiff No. 2 spread over a period of nine years, winches manufactured by respondent No. 2 could pass through various internal inspections, stringent tests, extensive field trial evaluation conducted by respondent Nos.5 and 6 and only on satisfaction, purchase orders were issued.

4. It is the further case of the plaintiffs that in anticipation of bulk orders from respondent Nos.5 and 6, respondent Nos. 1 and 2 decided to manufacture and supply winches from India only rather than importing from Sweden which resulted in plaintiff No. 1 and respondent Nos.1 and 2 entering into Sub-contracting and Manufacturing Agreement dated 25.6.2014. Under the said agreement, petitioner No. 2 had to manufacture, assemble, quality test and store winches within the factory premises and respondent No. 4 through an e-mail on 26.6.2014 also agreed to continue the said agreement for their future projects in India.

5. It is the further case of the plaintiffs that the 1st respondent entered into another agreement dated 7.9.2015 and as per the said agreement, plaintiff No. 2 was given the mandate to manufacture and supply winches to respondent No. 5 and on account of assurances given by respondent Nos.1, 2 and 4 had to sell his immovable property in Chennai apart from mortgaging his immovable property at Malleswaram, Bangalore, accumulated finances and built a modern world class factory at Nelamangala for manufacture and assemble of Sepson winches. On account of these two agreements, the plaintiffs with legitimate expectation of getting continuous orders from the respondents had to employ highly qualified and skilled experts in the field. The plaintiffs also set up Department for quality assurance and obtained various government approvals. Respondent No. 1 along with respondent Nos.2 to 4 after inducing plaintiff No. 2 to invest all his hard earned money and sweat unilaterally terminated the agreement with the petitioner and started direct supplies to respondent Nos. 5 and 6. Therefore, the plaintiffs have filed a suit for the relief sought for.

II - APPLICATION FILED BY THE DEFENDANT NO. 1

6. After receipt of suit summons, defendant No. 1 filed an application under Section 8 read with Section 5 of the Act to refer the parties for arbitration and to dismiss the su