The main legal point established in the judgment is the determination of the precedence of arbitration clauses in an integrated transaction and the referral of disputes to the appropriate arbitration authority.

JUDGEMENT (ORAL)

(By Video Conference on account of COVID-19)

1. The court is, in the present case, faced with a piquant situation in which various documents have been executed between the parties, containing arbitration clauses, each of which points in a direction to different from the others.

2. The way forward, in such a situation, is shown by the judgment of the Supreme Court in Balasore Alloys Ltd. v. Medima Llc, (2020) 9 SCC 136 para 11 of which reads thus:

11. At this stage, it is necessary for us to refer to the decision rendered in Olympus Superstructures (P) Ltd. v. Meena Vijay Khetan, (1999) 5 SCC 651 wherein this Court was confronted with the issue of there being two different arbitration clauses in two related agreements between the same parties. This Court while dealing with the same had harmonised both the clauses and had on reconciliation held that the parties should get the disputes resolved under the main agreement. In that context it was held as hereunder: (SCC pp. 667-68, para 30)

30. If there is a situation where there are disputes and differences in connection with the main agreement and also disputes in regard to other matters connected with the subject-matter of the main agreement then in such a situation, in our view, we are governed by the general arbitration Clause 39 of the main agreement under which disputes under the main agreement and disputes connected therewith can be referred to the same arbitral tribunal. This Clause 39 no doubt does not refer to any named arbitrators. So far as Clause 5 of the Interior Design agreement is concerned, it refers to disputes and differences arising from that agreement which can be referred to named arbitrators and the said Clause 5, in our opinion, comes into play only in a situation where there are no disputes and differences in relation to the main agreement and the disputes and differences are solely confined to the Interior Design agreement. That, in our view, is the true intention of the parties and that is the only way by which the general arbitration provision in Clause 39 of the main agreement and the arbitration provision for a named arbitrator contained in Clause 5 of the Interior Design agreement can be harmonised or reconciled. Therefore, in a case like the present where the disputes and differences cover the main agreement as well as the Interior Design agreement, - (that there are disputes arising under the main agreement and the Interior Design agreement is not in dispute) - it is the general arbitration Clause 39 in the main agreement that governs because the questions arise also in regard to disputes relating to the overlapping items in the schedule to the main agreement and the Interior Design agreement, as detailed earlier. There cannot be conflicting awards in regard to items which overlap in the two agreements. Such a situation was never contemplated by the parties. The intention of the parties when they incorporated Clause 39 in the main agreement and Clause 5 in the Interior Design agreement was that the former clause was to apply to situations when there were disputes arising under both agreements and the latter was to apply to a situation where there were no disputes or differences arising under the main contract but the disputes and differences were confined only to the Interior Design agreement. A case containing two agreements with arbitration clauses arose before this Court in Agarwal Engg. Co. v. Technoimpex Hungarian Machine Industries Foreign Trade Co, (1977) 4 SCC 367. There were arbitration clauses in two contracts, one for sale of two machines to the appellant and the other appointing the appellant as sales representative. On the facts of the case, it was held that both the clauses operated separately and this conclusion was based on the specific clause in the sale contract that it was the sole repository of the sale transaction of the two machines. Krishna Iyer, J. held that if that were so, then there was no jurisdiction for tra