The arbitration clause in the Consulting Agreements was not applicable to the claims based on the Memorandum of Understanding.

JUDGMENT

Augustine George Masih, J. - CM-5-FACOM-2021

1. Prayer in this application is for exemption from filing certified and typed copies of judgment dated 04.07.2013 passed by the Additional District Judge, Gurugram along with Annexures A-1 to A-3.

2. For the reasons stated in the application, exemption is granted from filing certified and typed copies of judgment dated 04.07.2013 passed by the Additional District Judge, Gurugram along with Annexures A-1 to A-3, subject to all just exception.

3. Application stands disposed of.

FAO-COM-3-2021

1. In this appeal, challenge is to the order dated 24.02.2021 passed by the Additional District Judge-cum-Presiding Judge, Exclusive Commercial Court at Gurugram, vide which the application filed by the appellant - defendant No.1 under Order VII Rule 11 (d) of the Code of Civil Procedure read with Section 8 of the Arbitration & conciliation Act, 1996 (hereinafter referred to as 'Arbitration Act'), for rejection of the plaint in terms of Clause 16 in the Consulting Agreement, which provides for referring the matter for arbitration under the provisions of Section 8 of the Arbitration Act and return the plaint as filed by respondent No.1 - plaintiff in view of the Consulting Agreement viz-a-viz confirmation of jurisdiction with laws and Courts of Scotland, has been rejected.

2. It is the contention of the learned counsel for the appellant that the Court below has misread the provisions of the agreements which have been entered into between the parties. It has proceeded on the assumption as if the general Memorandum of Understanding dated 17.03.2017, whereby the broad terms of engagement have been reduced into writing between the parties without taking into consideration the aspect that separate Purchase Orders were secured between the parties by signing and stamping each and every Consulting Agreement before the commencement of the work. The majority of the reliefs, as have been claimed in the commercial suit filed by the respondent No.1 - plaintiff, are alleging breach of Memorandum of Understanding dated 17.03.2017 solely, when in fact majority of the reliefs claimed by respondent No.1 - plaintiff in the civil suit flows from the Purchase Orders and Consulting Agreements. Respondent No.1 - plaintiff has intentionally chosen for not placing on record the factum of existence of separate Purchase Orders and Consulting Agreement of each project before the Court below due to existence of the arbitration clause in all such agreements executed between the parties. This clause provides for resolution of dispute by way of arbitration and applicable laws of Scotland only.

3. The Court below has ignored the fact that apart from the Memorandum of Understanding, the Consulting Agreements alongwith the Purchase Orders have been admitted by respondent No.1 - plaintiff and therefore, when the majority of claims are based upon these Consulting Agreements and the Purchase Orders, the terms and conditions thereof would have full application. Clause 16 of the Consulting Agreement relates to 'Dispute Resolution' and states that any dispute arising out of or in connection with the agreement, the parties will attempt to resolve the matter through friendly arbitration. Furthermore, in clause 18 it was agreed upon that in such dispute arising out of the subject matter shall be governed and construed in accordance with the laws of Scotland, which clauses have been overlooked by the Court below.

4. It has further been asserted that the application was required to be accepted as the parameters within which the claims have been made would fall within the scope and ambit of the provisions as contained under Order VII Rule 11 of CPC read with Section 8 of the Arbitration Act and therefore, the suit for recovery of outstanding amount ought to be dismissed. In any case, he contends that the suit needs to be returned qua the aspects which may be outside the purview of the Consulting Agreements and Purchase Orders but qua these as