MANMOHAN SINGH, J. -- By this common judgment we shall dispose of the two appeals filed by M/s. Usha Drager Pvt. Ltd and RKKR Infotech Pvt. Ltd. against the order passed by learned Single Judge of this court in I.A. Nos. 8159/2005 and CS(OS) No.1217/05 on 17th January, 2006.

2. The brief facts are that the suit was filed by the Appellants/ Plaintiffs against the defendants/respondents, inter alia, seeking the following reliefs:-

"3. The suit filed by the plaintiff’s seeks, inter alia, the following reliefs : —

(a) pass a decree of declaration in favour of the plaintiffs and against the defendants declaring that Distributor Agreement dated 22.2.1999 as being null and void, inoperative and being unenforceable between the parties;

(b) pass a decree of permanent injunction in favour of the plaintiffs and against the defendants restraining the defendants from proceeding with the International Chambers of Commerce Arbitration Case No.13588/MS before the International Court of Arbitration;

(c) Any other order or direction as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case."

3. The relevant facts and submissions of the parties have been recorded be the Learned Single Judge in paras 4 to 8 of the impugned order, which read as under :

"(a) On 9.5.1987 a Joint Venture was entered into between the defendant No. 1 and one Usha Services & Consultants (P) Ltd. This was by a Joint Venture Agreement for conducting business in India. As a result of this Joint Venture Agreement of 9.5.1987, the plaintiff No. 1, being the joint venture company, came to be incorporated under the name Usha Draeger (P) Ltd. (hereinafter referred to as UDPL).

(b) Subsequently, it appears that an agreement was entered into on 22.2.1999 between the defendant No. 2 and the said Joint Venture Company, that is the plaintiff No. 1 (UDPL). This agreement was a Distributor Agreement. Therefore, we have two agreements one being the Joint Venture Agreement of 1987 and the other being the Distributor Agreement of 1999.

(c) Both the agreements contained arbitration clauses providing for settlement of disputes by way of arbitration. The agreement with which we are concerned with in the present suit is the Distributor Agreement between the defendant No. 2 and the plaintiff No. 1.

(d) The plaintiff No. 2 is the successor-in-interest of the said Usha Services Consultant (P) Ltd. who was the original joint venture partner in the plaintiff No. 1.

(e) The Distributor Agreement of 1999 was acted upon and the plaintiff No. 1 received payments under the agreement and, therefore, there is no question of the plaintiffs now challenging the validity of the same.

(f) There was a Board Meeting of the plaintiff No. 1 (UDPL) held on 22.9.1999 itself wherein one Dr. Mahavadi was authorised to enter into such an agreement. The agreement itself was signed on 22.2.1999. The agreement was no doubt signed by Dr. Mahavadi but the same was not to be acted upon and there was an oral arrangement between the parties that although this Distributor Agreement is being entered upon, it is not to be acted upon by the parties and that it was only for the purposes of showing to Governmental agencies and other agencies that there was a foreign partner involved.

(g) That Dr. Mahavadi was indeed authorised by the Board of UDPL on 22.2.1999 to sign such an agreement, there are only two situations which are possible. The first situation is that the Distributor Agreement of 22.2.1999 was signed prior to the Board Meeting. The second situation is that the said Distributor Agreement was signed and executed after the Board Meeting. In the former case it would be obvious that although the execution of the agreement would initially have been without authority, but, because the Board had authorised Dr. Mahavadi subsequently, the same would stand ratified. In the latter case, it is obvious that as Dr. Mahavadi had been authorised, the execution of the Distributor Agreement would be with the