- (1.) This application has been taken out by the defendant No.1 for dismissal of the above suit; alternatively, the suit be permanently stayed and order directing that the above suit does not appear as undefended suit till the disposal of the application. The grounds for dismissal of the suit, as it appears from the petition, is that there exists an arbitration agreement which has been entered into by and between the parties namely, the plaintiff and the defendant No. 1 and furthermore, this Court has no jurisdiction to entertain the suit in view of the Forum Selection Clause contained in the agreement. Going by the provision of Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act) the reliefs sought, no suit can be dismissed under the aforesaid provision namely under Section 8 of the said Act. For convenience sake. Section 8 of the said Act is set out below :- "8. Power to refer parties to arbitration where there is an arbitration agreement. - (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in subsection (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made."
(2.) It is clear thus that the Court, at the highest, if any application is allowed, can refer the parties to arbitration and cannot dismiss the suit. I am of the view that dismissal of the suit amounts to destroying the lis itself without hearing the suit or referring disputes for adjudication of the same by the different forums. However, it has now become settled law that the Courts are to look into the substance of the matter. Mr. Pratap Chatterjee, learned senior counsel appearing with Mr. Dhruba Ghosh, learned Counsel, submits that the subject matter of the suit relates to termination of the contract in view of non-performance by the plaintiff and these disputes are covered by the arbitration agreement. He further submits that, at the first instance, this Court is not clothed with the jurisdiction to entertain the suit as the parties have chosen their own forum before the appropriate Court at Delhi. I, therefore, quote the relevant Forum Selection Clause on which reliance is placed by Mr. Chatterjee, as follows :- "(f) The said General Conditions of Contract also provided for a Forum Selection Clause, as follows : 4.1. Settlement of Disputes It is specifically agreed by and between the parties that all the differences or disputes arising out of the Agreement of touching the subject matter of the Agreement shall be decided by process of settlement and arbitration, as specified in Clause 57 of the General Condition of the Contract and the provision of the Indian Arbitration Act, 1996 shall apply and Delhi Court alone shall have exclusive jurisdiction over the same."
(3.) I think that before I decide whether the disputes canvassed in the petition amongst the parties are covered by the arbitration clause I should decide first the scope and applicability of the aforesaid agreement relating to jurisdiction.;