The main legal point established is that when a dispute hinges on the interpretation of an agreement containing an arbitration clause, and the cause of action against all parties is intertwined, reference to arbitration may be appropriate.

Hima Kohli, J.

1. The present application is filed by the defendants No. 1 and 2 under Section 8 of the Arbitration and Conciliation Act, 1996 (for short `the Act) praying inter alia for rejection of the plaint and for reference of all the disputes between the defendants No. 1 & 2 and the plaintiff to arbitration on the ground that the parties are governed by an arbitration clause, in terms of Article 8 of the Agreement.

2. A brief reference to the facts of the case is necessary. The plaintiff has filed the present suit against the defendants for permanent and mandatory injunction. It is the case of the plaintiff that the defendant No. 1 appointed the plaintiff as its Sole Carrier Cargo Sales Agent in the Indian territory for a period of four years vide Carrier Cargo Sales Agent Agreement dated 20.10.2004. The grievance of the plaintiff is that during the currency of the Agreement, the defendants No. 1 & 2 have appointed the defendant No. 3 as their Cargo Agent within entire Indian territory as assigned exclusively to the plaintiff and thus breached the Agreement governing the parties. The relief sought by the plaintiff in the prayer clause is reproduced herein below for ready reference:

a) A decree for permanent injunction be passed in favour of the plaintiff and restraining the defendants No. 1 & 2 from appointing any agent in the territory of the defendants during the pendency of the agreement dated 20.10.2004 or as may be extended;

b) Decree for mandatory injunction be granted in favour of the plaintiff and against defendants thereby directing defendants to withdrawing the appointment of agency given to M/s Air Shagoon Network Private Limited/defendant No. 3 and not to permit to continue any further as detailed above;

c) To restrain the defendants No. 1 and 2 from giving any space for cargo booking to defendant No. 3;

d) To restrain defendant No. 3 to project itself as the agent of defendant No. 1 to others or to represent the defendant No. 1 as its agent;

e) To restrain defendant No. 3 from carrying on any business as an agent of defendant No. 1 within the territory of India;

f) Any other order/s which is deemed fit and proper may also be passed.

3. Counsel for the applicants/defendants No. 1 & 2 submitted that Article 8.1 of the Agreement dated 20.10.2004 provides that in case of any dispute or claims concerning the scope, meaning, construction or effect of the Agreement, or arising in any manner relating to the Agreement, such dispute/claim shall be submitted for consideration and final settlement to the International Commercial Arbitration Court at the Chamber of Commerce of Ukraine, Kiev. The said Article further provides that all the disputes and claims between the parties shall be governed by the laws of Ukraine and the Rules of International Commercial Arbitration Court at the Chamber of Commerce of Ukraine. It was stated that as the disputes raised by the plaintiff in the present suit are in connection with the Agreement which specifically provides for a remedy by way of arbitration, the present suit be rejected and all the disputes between the defendants and the plaintiff be referred for adjudication to arbitration. Thus it was stated that the suit instituted by the plaintiff in connection with the disputes arising out of the Agreement is not maintainable against the defendants, and the jurisdiction of this Court is barred.

4. It was further submitted by the counsel for defendants No. 1 & 2 that while the present application is filed under the provisions of Section 8 of the Act, it is actually one under Section 45 of the Act. In this regard, reference was made to the order dated 18.12.2007.

5. Reference was also made to the provisions of Section 45 of the Act. It was urged that in view of the non-obstinate clause contained in Section 45 of the Act, this Court is under a mandate to refer the parties to arbitration for the reason that it is not even the case of the plaintiff that the Agreement between th