Disputes arising from a compromise cannot invoke an arbitration clause from a prior agreement, especially with allegations of fraud affecting the decree.

1. This appeal arises out of the order dated 26/03/2007 passed by the Guwahati High Court in Civil Revision (P) No.31 of 2005 in and by which the High Court allowed the revision petition preferred by the respondent and referred the parties to arbitration.

2. Brief facts which led to filing of this appeal are as follows:
The appellant is a Company registered under the Companies Act, 1956 and is involved with various types of agency businesses including that of clearing and forwarding agents, freight contractors, etc. M/s Rhone Poulene India Limited (RPIL) vide agreement dated 01/05/1997 appointed the appellant Company as its clearing and forwarding agent for a period of three years. Clause 17 of the agreement dated 01/05/1997 contains arbitration clause. The agreement was renewed for a further period from 01/04/2001 to 31/03/2002.

3. RPIL vide its letter dated 20/07/2001 informed the appellant that their Company is getting merged with respondent Company - Nicholas Piramal India Ltd. (NPIL) and that pursuant to the merger, RPIL shall cease to exist as a legal entity and therefore, with effect from three months from the date of the letter, the subsisting clearing and forwarding agency agreement shall stand terminated in terms of the provisions of the agreement. The Bombay High Court in Company Application No.252 of 2001 passed the order dated 27/09/2001 inter alia approving amalgamation of RPIL with the respondent Company. The appellant by its letter dated 25/07/2001 objected to the unilateral decision of the respondent Company to terminate the clearing and forwarding agency agreement and requested the respondent to maintain status quo with respect to the agency until the issue is resolved through negotiations. RPIL vide its letter dated 03/09/2001 informed the appellant that they are unable to accede to the request for withdrawing the termination letter. For all practical purposes, the clearing and forwarding agency agreement dated 01/05/1997 thus stood terminated.

4. The appellant filed Title Suit No.241 of 2001 inter alia praying for declaration that the contract between the appellant and RPIL - defendant No.1 was valid, subsisting, legal and continuing and for further declaration that defendants cannot terminate the appellant as clearing and forwarding agents in any manner in case of merger with the respondent Company. In the said suit, the parties have compromised the matter and on the basis of compromise deed dated 11/12/2001 jointly filed by the parties, Civil Judge, Senior Division, Guwahati vide its order dated 24/12/2001 decreed the Title Suit No.241 of 2001 on compromise as per the terms and conditions embodied in the compromise deed. In terms of the said compromise, respondent has made the payment of Rs.23,50,000/- to the appellant and also as a part of compensation package appointed the appellant as its stockist for their products at Guwahati and Agartala.

5. Case of appellant is that the respondents refused to honour the terms and conditions of the compromise decree therefore, the appellant had filed Title Execution case No.4 of 2002 for execution of the compromise decree dated 24/12/2001. Differences arose between the parties on the alleged diversion of stocks by the appellant's employee in the year 2002. The respondent filed criminal complaint in C.R. Case No.1446 of 2002 before the Chief Judicial Magistrate, Kamrup for the offences punishable under S.420, S.406, S.409 and S.403 IPC read with S.34 IPC. The respondent had also filed an application under S.151 C