The central legal point established in the judgment is the limited grounds for judicial intervention in international arbitration under Section 45 of the Arbitration and Conciliation Act, 1996, and the severability of the arbitration agreement from the matrix contract.

JUDGMENT :

1. The appellant has assailed an order restraining a foreign seated arbitration before the Singapore International Arbitration Centre (SIAC for short).

2. Such judicial intervention was granted by the Learned Single Judge merely because the respondent/plaintiff had challenged the existence of the matrix contract between the parties and, under such circumstances, it would be financially burdensome to the latter to approach the tribunal at Singapore. In the impugned order, the Judge had not recorded this prima facie satisfaction with regard to the non-existence of the parent contract, far less the arbitration agreement. Challenge to the institution of an international arbitration under Part II of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act of 1996) is maintainable on very limited grounds as envisaged in Section 45 thereof. Section 45 reads as follows :

“Section 45 : Power of judicial authority to refer parties to arbitration – Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, [unless it prima facie finds] that the said agreement is null and void, inoperative or incapable of being performed.”

3. A bare reading of the aforesaid provision makes it amply clear that the international arbitration proceeding under Part II of the Act shall not be interdicted by a judicial authority “unless it prima facie finds that the arbitration agreement is null and void, inoperative or incapable of being performed.” No such finding has been recorded by the learned Single Judge while granting the order of injunction. Hence the aforesaid reason is sufficient for us to set aside the order impugned.

4. Although it has been strenuously argued that this Court may go into the facts of the case itself to sustain the order of injunction as observed in NEPC Micon Ltd. vs. Magma Leasing Ltd. & Anr. [1999 SCC OnLine Cal 133] and (GPT Health Care Pvt. Ltd. vs. Soorajmull Nagarmull and Ors. [MANU/WB/0859/2017]. Hence we have taken the effort to wade through the facts of the case so as to examine whether a prima facie case for judicial intervention has been made out or not.

5. Mr. Abhrajit Mitra, learned senior counsel appearing for the respondent/plaintiff has taken us through the electronic mails exchanged by and between the parties after 26th February, 2020, that is, the date of execution of the matrix contract which includes the arbitration clause. Relying on the aforesaid communications, it was vehemently argued there was no concluded contract by and between the parties. In the absence of such contract reference to arbitration was wholly impermissible in law.

6. In reply, Mr. S.N. Mookherjee, learned senior counsel for the appellant argued that negotiations referred to in the electronic mails do not impact the arbitration agreement at all. Arbitration agreement incorporated in the matrix contract is a separate and severable contract in itself. Mere negotiations of incidental terms of the matrix contract would not affect the arbitrability of the dispute including the validity of the principal agreement before the arbitral tribunal.

7. To examine the rival submissions it may be apposite to set out the arbitration clause engrafted in the agreement dated 26th February, 2020:-

“Any dispute arising between the parties in connection with this Contract including any question regarding its existence, validity or termination, shall be referred to and finally resolved by Arbitration in Singapore in accordance with the arbitration rules of the Singapore International Arbitration Centre (“SIAC Rules”), for the time being in force, which rules are deemed to be incorporated by reference in this Clause. The tribunal shall consist