The petitioner, a private limited company, is stated to be engaged in the business of supply and sales of automative and industrial bearings in India. The petitioner claims to have entered into a non-exclusive contractual agreement with the respondent for supply of non-automobile wheel bearings, both imported and indigenous as per the contractual agreement and the respondent was appointed as a nonexclusive intermediator and distributor for supply supplying the aforesaid bearings to the end customers on terms and conditions which would form part and parcel of the invoices raised by the petitioner.

2. The respondent is stated to have placed orders on the petitioner through purchase orders, whereupon the petitioner raised invoices upon the respondent to the extent and value of the products supplied. The respondent acknowledged the receipt of the goods, after affixing the signature and the seal on the consignment note, which is stated to be duly accompanied by the relevant invoices in original. Such invoices in turn are stated to have been accompanied by the terms and conditions as set out in the General Terms of Business (GTB). The consignment note is also stated to have contained a reference to the corresponding invoices and the respondent used to make payments towards such invoices through cheques and / or RTGS after service, setting out the quality, quantity and specifications of the products.

3. The allegation of the petitioner is that while initially payments were made in time as per invoices, since July 2012, the respondent started failing and neglecting to honour the payments for the supplies made under the relevant invoices. Despite the fact that the delivery of goods was not in dispute, all requests for payments were to no avail.

4. The petitioner seeks to set up a case that there was acknowledgement of outstanding liability by the respondent by e-mail dated 25.09.2013 to the tune of Rs.4,50, 31,303, excluding interest as on July, 2013. The total amount stated to have accumlated is Rs.4,50,31,303/- (principal amount) along with interest at 24% per annum as per GTB, totaling to Rs.6,33,29,859/- as on 31.10.2014.

5. The GTB and the invoices raised by the petitioner on the respondent contain the following arbitration clause:

"Arbitration: All disputes, differences and claims arising out of or in connection with this contract shall be referred to the arbitration of two arbitrators, one to be appointed by each party to the dispute and such arbitration shall be held at Chennai in accordance with the provisions of the Arbitration and Reconcilliation (sic) Act, 1996, for (sic) any statutory modifications or reenactment thereof for the time being in force. The award shall be final and binding on the parties."

6. An Arbitration notice through counsel is stated to have been sent on 30.07.2014, proposing the nominee arbitrator and calling upon the respondent to do likewise. However, the respondent, vide their reply dated 29.09.2014, refused to do so on the plea that there was no valid arbitration clause existing inter se the parties.

7. It is in pursuance to the aforesaid, the present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996, seeking to rely on Section 7 of the said Act.

8. The respondents have filed their counter affidavit resisting the petition. The respondents have their own story in respect of transactions, but it is not necessary, in my opinion, to get into that for the reason that while exercising jurisdiction under Section 11 of the said Act, the scope of the scrutiny of this Court has to be limited to (a) the existence of a valid arbitration agreement, (b) disputes having arisen from the arbitration agreement, (c) this Court having territorial jurisdiction and (d) no claim being ex-facie barred by limitation.

9. Section -7 forming part of Chapter-II of the said Act reads as under:

"7.Arbitration Agreement: - (1) In this Part, "arbitration agreement" means an agreement by the parties