Jayant Nath, J.

IA No. 12140/2013(Order 7 Rule 11 of CPC)

1. This is an application filed under Order 7 Rule 11 of CPC for rejection of the plaint.

2. The present suit is filed by the plaintiff seeking a decree against the defendants for permanent injunction to restrain the defendants from proceeding before Singapore International Arbitration Centre for arbitration in alleged violation of Shareholders Agreement dated 6th October , 2011 and Master Agreement dated 24th August, 2012.

3. The averment of the plaintiff is that the plaintiff and the defendant no.1 entered into a joint venture Shareholder Agreement in October, 2011 and Master Agreement dated 24th August, 2012. The business of the joint venture started in October, 2011. Certain disputes arose between the parties on account of which the defendant no.1 had got issued a notice dated 22nd March, 2013 to the plaintiff in terms of Clause 12.2 of the Share-Holder Agreement. Thereafter, the defendant no.1 vide its notice dated 24th May, 2013 invoked clause 12.3 for Singapore International Arbitration Centre for arbitration. Hence, the plaintiff has filed the present suit. It is stated that all kinds of disputes settlement as provided in Clauses 12.0 to 12.4 of the Share-Holder Agreement have been totally ignored by defendant No. 1 rendering the said Clauses redundant and has instead directly approached the Singapore International Arbitration Centre.

4. The defendant has filed the present application seeking rejection of the plaint stating that the suit is hit by Section 5 of the Arbitration & Conciliation Act and barred by law. It is stated that as there is an arbitration clause, the present suit would not be maintainable and all issues including the procedural matters have to be decided by the Arbitral Tribunal itself under Section 16 of the Arbitration and Conciliation Act. The application further states that the grievance of the plaintiff is ill founded inasmuch as it is stated that the defendant no.1 has adhered to the contractual procedure before invoking the arbitration. It is stated that discussions for amicable resolution commenced between the parties and a meeting was held in Boise on 2-3rd March, 2013 to resolve the disputes. The defendant no.1 also claims to have sent a letter dated 26th March, 2013 to the plaintiff with the proposal to shorten the disputes resolution process and sought the consent of the plaintiff for waiver of pre-arbitral steps. However, the plaintiff is stated to have not responded, hence, the defendant no.1 vide its letter dated 24th May, 2013 invoked the arbitration clause.

5. Learned Senior Advocate for the defendant has relied upon the judgments in the case of Aurohill Global Commodities Vs M.S.T.C Ltd., (2007) 7 SCC 120, Roshan Lal Gupta Vs Parasram Holdings, 157(2009) DLT 712 and Clearwater Capital Partners (Cyprus) Ltd., Vs. Gurmeher Singh Majithia & Ors., 189(2012) DLT 362 to contend that the present suit is barred under Section 5 of Arbitration & Conciliation Act and that the remedy of the plaintiff is to approach the Arbitral Tribunal.

6. Learned counsel for the plaintiff at the outset submits that he is not challenging the existence or the validity of the arbitration agreement. The submission put forth is that Clause 12.3 of the Share-Holders Agreement which is an arbitration clause is in three parts, namely, Clause 12.3(a), (b) and (c). It is stated that defendant has straightway invoked sub-clause 12.3 (c) by-passing Clause 12.3 (a) and Clause 12.3(b). It is stated that as the defendant has failed to follow the said procedure, the arbitration cannot be done and hence the present suit would lie. He submits that all the judgments relied upon by the counsel for the defendant pertains to the suits where there was a challenge to the validity of the Shareholders Agreement. He relies on Section 21 of the Arbitration Act and reliance is also placed on the judgment of the Hon’ble Supreme Court in the case of Venture Global Engineering Vs.