Soumen Sen, J.: The instant appeal is arising out of an order passed on September 9, 2011 in refusing to restrain the respondent No.1 from taking steps in terms of the GAFTA Rules, 125 for resolution of disputes by arbitration.

2. The power and jurisdiction of a Civil Court to restrain a party from making reference to an International Commercial Arbitration and to have the said dispute resolved by such International Arbitration is the issue required to be decided in the present appeal.

3. Before we advert to any other facts, we record that there is no dispute that the contract containing arbitration clause has been duly executed by the parties.

4. We shall only refer to some of the relevant facts that are necessary for deciding the propriety and legality of the order passed on September 9, 2011.

5. In or about October 25, 2010, the appellant had entered into three several contracts including a contract bearing No.#LMJ/SIC/Oct/01 (hereinafter referred to as the ‘said contract’) whereby the appellant had agreed to purchase from the defendant No.1 and defendant No.1 had agreed to sell to the appellant 15000 MT (+ - 5 %) of non basmati parboiled rice (15% maximum broken) of 2009-10 origin or latest crop of Thailand origin at the rate of USD 450 per MT). The appellant under the contract of sale was required to open an irrevocable confirmed unrestricted letter of credit in US Dollars in favour of the defendant No.1 within five working days from the date of signing of the contract through Standard Chartered Bank (India) for the value of the goods to be shipped under the contract.

6. Thereafter some of the terms of the contract was amended on 7th December, 2010. There were several amendments also being carried out to the Letter of Credit and last of such amendment was made on 10th December, 2010. The said Letter of Credit was ultimately abandoned in view of the fact that the shipment was made on board the Vessel M.V. Tu Man Gang which was a North Korean Vessel and was not covered by the documentary L/C opened by the appellant through Standard Chartered Bank. Accordingly, the parties have agreed to replace such Letter of Credit by a Bill of Exchange drawn on 19th January, 2011 and received by the banker of the appellant/plaintiff, namely, the Bank of Baroda on 21st January, 2011. The appellant requested the defendant No.1 to accept the said documents forwarded by the exporter, respondent No.1, directly without intervention of the bank and such documents were forwarded by the appellant to its banker, namely, Bank of Baroda with an undertaking to accept such document. All documents relating to the payment covered under the instant contract representing 97.78% were forwarded to Bank of Baroda and Bank of Baroda accepted those documents. On the basis of such original documents, the appellant took delivery of all goods shipped on board the Vessel M.V. Tu Man Gang. Bank of Baroda and LMJ International Ltd. both accepted the Bill of Exchange whereby the acceptor instead of making immediate payment agreed to pay the full amount of the instrument on a designated due date to the holder of the original Bill of Exchange. This designated due date was 16th February, 2011.

7. The appellant contended that in course of discharge of cargo, it was found that the goods dispatched by the defendant No.1 was not of the contractual specification and the grains were found to be damaged and discoloured in view thereof it is alleged that the parties had agreed that the defendant No.1 would send its representative to Bangladesh for joint inspection of the rice and after such inspection report is made available to the parties, the said purpose would mutually settle the amount after deducting the value of inferior quality of goods which was shipped by the defendant No.1. In the meantime, the defendant no.1 would accept provisionally an amount representing 90 % of the value of the invoice and the balance 10% would be settled after inspection of the shipped r