GITA MITTAL, J.

( 1 ) THIS petition raises two very interesting questions which are required to be answered. The first question raised is whether a party can seek interim relief on the ground that the other side has raised a dispute before the arbitral Tribunal. The second question which has been raised by the respondent is to the effect that on account of sickness of its partner in a joint venture under the sick Industrial Companies (Special Provisions) Act, the underlying shareholders agreement between the parties is rendered frustrated and incapable of implementation. Consequently, the petitioner cannot base a petition for prohibitory relief based on a clause in this agreement which prohibited the parties thereto from undertaking any business similar to that of the joint venture during its currency.

( 2 ) SO far as the basic facts are concerned, there is no material dispute and to the extent necessary, they are noticed hereinafter. The petitioner M/s modi Rubber Ltd. , (hereinafter referred to as 'mrl' for brevity) entered into a memorandum of Understanding ('mou') dated 1st July, 1988 with M/s Guardian international Corporation arrayed as respondent before this court, (hereinafter referred to as 'guardian' ).

( 3 ) GUARDIAN is stated to be a leader in manufacturing float glass and the agreement between the parties states that it has acquired unique and valuable engineering skills and expertise for designing, constructing and operating plants for the manufacture of float glass by the float process. The agreement between the parties also notices that the MRL is a renowned industrial establishment of India with extensive expertise in the manufacturing and marketing of high quality industrial products in India and other countries.

( 4 ) BESIDES the parties to the present petition, the agreement between the parties also involved M/s Gujarat Alkalies Chemicals Ltd. , a Gujarat Government corporation which had obtained a letter of intent No. LI: 779 (1989) Regn. No. 79 (89)-comp. /scs dated 13th October, 1989 issued by the Government of India for establishing and operating a float glass plant in the State of Gujarat.

( 5 ) THERE is therefore no dispute that MRL and Guardian were both financially strong and stable and had entered into a relationship of trust and faith. These parties entered into a Memorandum of Understanding dated 1st July, 1988 whereby they agreed in principle to collaborate and promote a joint venture company in India in the assisted sector with the State of Gujarat through one of its nominee companies, subject to grant of requisite Indian Government approvals and obtaining all requisite finances to undertake, amongst others, the production and marketing of flat glass using the most advanced and upto date float process based on the expertise acquired by Guardian or any of its subsidiaries. As per this MOU, the initial issued equity share capital of the company was agreed to be subscribed in the following percentages:-

(i ) Guardian or one of its subsidiaries 40. 00% (ii) The MRL and its associates including Gujarat State Government 40. 00%

(iii) Public issue

20. 00%

( 6 ) THE parties had agreed to restrict their commercial activities under this MOU in clause 7 in the following manner:-

"7. This MOU assures both parties that they will not engage in other collaborations for the purpose of making float, tepered coated or laminated automotive and architectural glass products in India or any other industry which uses float glass as a raw material. "

( 7 ) THE parties had also agreed that the management of the joint venture company shall be in such manner as is 'mutually agreed between the parties from time to time'.

( 8 ) PURSUANT to this Memorandum of Understanding, the parties entered into a Share Holders Agreement dated 23rd January, 1990 (referred to as 'sha' hereinafter for brevity ). By this agreement, the parties agreed to collaborate and promote a joint venture company called the Gujarat Guar