The main legal point established in the judgment is that a vague and uncertain arbitration clause may not be enforceable, and a suit for recovery of admitted amounts may be maintainable even if there is an arbitration clause in the contract.

ORDER :- A. No. 5296/2002 : This application is to direct the respondents/defendants to furnish security for the suit claim of Rs.13,41,165.75 with interest and subsequent costs and in the event of failure, to pass an order of Attachment before Judgment of the movables shown in the Judges summons.

A. No. 918 of 2003 : This Application is filed to set aside the order passed in A. No. 5296 of 2002 directing the respondents/defendants to furnish the security.

A. No. 927 of 2003 : This application is filed under Section 8 of the Arbitration and conciliation Act to refer the claim to Arbitration.

All these applications are heard together and disposed of by this common order. For Convenience, parties are referred to as in their rank in the suit.

2. Plaintiff's claim of money for recovery of Rs.13,41,165.75 is based on the Goods /Gaskets sold and supplied at Delhi Defendants' principal office and at their various branches of Jodhpur, Ludhiana etc. On the said transaction, after giving credit to various payments made by the defendants, a total sum of Rs.9,10,739.53 was found due towards the balance principal as per the plaintiff's statement of account. In spite of repeated demands and issuance of notice on 7-8-2001, defendants have not paid the amount. By their letter dated 29-5-2001, the defendants disputed the amount but admitted their liability to the extent of Rs.6,07,064.01. Thereafter, the plaintiff sent letters demanding the payment of admitted sum of Rs.6,07,064.01 and settle the balance disputed amount on verification of accounts. The defendants have no inclination to pay the amount; but only insisted upon returning back the goods. Hence, the suit for recovery of Rs.13,41,165.75.

3. At the time of filing of the suit, plaintiff has filed an application in A. No. 5296 of 2002 to direct the respondents/defendants to furnish sufficient security for the suit claim. On 19-12-2002, Justice Rama-moorthy, order notice and also directed the defendants to furnish security. Application in A. No. 918 of 2003 is now filed by the respondents/defendants to set aside the order dated 19-12-2002. According to them, such an order to direct them to furnish security causes serious prejudice and irreparable loss. Further according to the respondents/defendants, as per Clause 23-A in the Contract, all the disputes arising between the parties could be referred only to Arbitration for settlement and hence, respondents/defendants seek to set aside the order directing them to furnish security.

4. A. No. 927 of 2003 is filed by the respondents/defendants to refer the dispute to Arbitration. According to the defendants, as per Clause 23-A, all disputes arising in relation to this Agreement, could be settled by the Arbitration of neutral person agreed by both. Further case of the defendants is that the plaintiff cannot give a go by to Clause 23-A of the Agreement invoking the original jurisdiction of this Court. Thus invoking Clause 23-A of the contract, defendants seek to refer the claim to Arbitration.

5. Resisting the application, the plaintiff has filed a counter affidavit contending that Clause 23-A is the mandatory Clause to refer the dispute to Arbitration. Since Clause 23-A speaks about Arbitration of a neutral person, it is not workable because it is vague, not certain and unintelligible and void. It is not capable of being given effect to and it cannot be enforced because of the indefiniteness. Further, Clause 23-B, which co-exists, provides for exclusive jurisdiction to the Courts in Chennai. Accordingly, the present suit is rightly filed before this Court. In any event, having not made the payment, as per the Terms of the Contract, it is not open to the defendants to insist for referring the dispute to Arbitration.

6. Contending that absolutely there is no vagueness in Clause 23 of the Contract, learned counsel for the applicants/defendants submitted that when there is a clear Clause to refer any dispute to Arbitration, the same cannot be allowed to b

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