Alok Sharma, J. - (1.) THIS petition has been filed challenging the order dated 24.04.2014, passed by the Additional District Judge No. 3, Jaipur Metropolitan, Jaipur dismissing the petitioner -defendant's (hereinafter "the defendant") application under Section 151 CPC praying that the Court first address its application under Section 45 of the Arbitration and Conciliation Act, 1996 (hereinafter "the Act of 1996") before requiring it to file a written statement to the respondent -plaintiffs (hereinafter "the plaintiff") suit for declaration and permanent injunction.
(2.) THE facts of the case are that the plaintiff filed a suit for declaration and permanent injunction inter alia praying that the defendant be restrained from terminating the local import agreement dated 03.06.2009 without due process till the recovery of the amounts invested by the plaintiff under the said agreement and further that aside of declaring the defendant's Press Release dated 28.04.2012 to be null and void, the defendant also be restrained by way of permanent injunction from supplying products covered under the local import agreement dated 03.06.2009 to any third party. A copy of the local import agreement dated 03.06.2009 was filed along with the plaint. The trial court while issuing notices on the plaintiffs suit for declaration and permanent injunction as also on the accompanying application under Order 39 Rule 1 & 2 CPC vide order dated 02.04.2013 directed that the pending service of notice on the defendants in the suit, they would be under the court's ad interim injunction to maintain status quo in their relation with the plaintiff with reference to the local import agreement dated 03.06.2009. On service of notice in the plaintiff's suit the defendant moved an application under Section 45 of the Act of 1996 on 13.01.2014 inter alia stating that the disputes sought to be agitated by the plaintiff in the suit were wholly arbitrable in terms of Section 14.8 of the local import agreement dated 03.06.2009 which reads as under: "Section 14.8 Arbitration Agreement: 14.8.1 Any dispute or difference as to any matter or thing arising out of or in connection with this Agreement including (but not limited to) any dispute as to the existence, validity, construction, application or termination of this agreement (a "Dispute") that is not resolved within thirty (30) days after either of the Importer or PME gives a notice in writing of that Dispute to the other, shall be referred to arbitration in accordance with the Rules of the London Court of International Arbitration (the "Rules") and in the manner specified in this Section. 14.8.2. The Rules are deemed to be incorporated by reference into this Section but in the event of any conflict or inconsistency between this Section and the Rules, the provisions of this Section will prevail. 14.8.3. For the purpose of any arbitration proceedings commenced pursuant to this Section, subject to applicability: a) the number of arbitrators shall be three; b) (i) the Importer and PME shall each be entitled to nominate one arbitrator in accordance with and subject to the Rules not later than 14 days after service of a request in writing by either party to do so and the two arbitrators so appointed shall forthwith appoint a third arbitrator as the chairman of the tribunal. The 3rd arbitrator is to be appointed by mutual consent by the two arbitrators appointed by the Importer and PME; if agreement cannot be reached, the 3rd arbitrator shall be appointed by the London Court of International Arbitration; (ii) In the event that the two arbitrators appointed by the parties (or in accordance with paragraph (iv) of this section, as the case may be) fail to appoint a third arbitrator within 21 days of the date on which the two arbitrators were appointed (or, in the event that the two arbitrators were appointed on different dates, of the date on which the second arbitrator was appointed), either party shall be at liberty to apply for such appointment to be made by the London Court of International Arbitration (the "LCIA Court") in accordance with the Rules. (iii) In the event that one party (the "party in Default") fails to appoint an arbitrator within the time prescribed in paragraph (i) of this Section, the other party, having duly appointed its arbitrator, may give notice in writing to the Party in Default requiring the Party in Default to appoint its arbitrator. (iv) If the Party in Default does not within 7 days of that notice being given notify the other party of the appointment of its arbitrator, the arbitrator that should have been appointed by the Party in Default shall be appointed by the LCIA Court in accordance with the Rules upon the application of the other party. c)the place at which the arbitration takes place shall be the Emirate of Dubai; d) the language to be used in the arbitral proceedings and in any award of the arbitrator made in the course of those proceedings (the "Award") shall be English; and e) the Award shall include a summary of the parties' submissions and documents, the grounds on which the Award is made and the relief granted, it shall state the date and place of the Award, it shall be signed by each of the arbitrators and a copy of the agreement to arbitrate will be attached to it. 14.8.4. Each of the Importer and PME hereby agrees that: a) it will submit to the exclusive jurisdiction of the Dubai civil courts for the purposes of ratifying any Award; b) it will not challenge any Award; c) it will not object to or challenge any application to enforce an Award in any court and it will submit to the jurisdiction of that court for the purposes of those enforcement proceedings; and d) no defect in the application of the procedure contained in this Section of the Rules shall render an Award void, voidable or otherwise subject to a valid challenge, save insofar as the defect affects a matter of substance in the Award itself. 14.8.5 Within 30 days after the last of the three arbitrators is appointed under and in accordance with the Rules, the arbitrators shall notify each of the Importer and PME of the date and place for an initial hearing, (the "Initial Hearing") the purpose of which shall include, but not be limited to, fixing to, fixing the timetable for the presentation of each party's submission of evidence. The Importer and PME agree that the final Award shall be rendered within three hundred and sixty five (365) days after the Initial Hearing and any other period contained in the applicable law shall be and is hereby ......."
(3.) IT was stated that the local import agreement dated 03.06.2009 was one referable to Section 44 of the Act of 1996 and therefore the dispute in the suit as laid be (referred to arbitration under Section 45 without prejudice to the main contention with regard to the civil court lacking jurisdiction for reasons stated. Aside of the aforesaid, it was also submitted that the suit had been filed belatedly one year subsequent to the Press Release dated 28.04.2012 and was liable to be dismissed on that count too. Mala fide invoking the jurisdiction of the civil court was also alleged stating that in respect of a similar local import agreement dated 08.06.2007 with a pari materia arbitration clause, the issue of arbitrability of the disputes arising therefrom between the parties (i.e. the plaintiff and the defendant) had been considered by the Additional District and Sessions Judge under its order dated 28.04.2012 to the defendant's benefit affirmed by this Court under its order dated 04.05.2012 whereto a challenge before the Hon'ble Supreme Court had failed under the Apex Court's order dated 21.08.2012. It was submitted that it was held thus upto the Hon'ble Apex Court that the Indian Courts did not have the jurisdiction to determine the disputes arising under a similar local import agreements between the parties. It was submitted that consequently the civil court in India evidently had no jurisdiction to hear the dispute arising out of or relating to the local import agreement dated 03.06.2009 as agitated in the plaintiff's suit. Disputes pertaining to the aforesaid agreement in all their myriad aspects had to be referred to arbitration in accordance with the Rules of the London Court of International Arbitration (LCIA) with the place/seat of arbitration being Dubai under clause 14.8 of the local import agreement dated 03.06.2009. It was submitted that the said Arbitration Clause contained in the local import agreement dated 03.06.2009 squarely fell within the scope of New York Convention and India also had a reciprocal arrangement with United Arab Emirates for the purpose of recognition and enforcement of Foreign Arbitral awards. In the circumstances, it was prayed that the dispute sought to be agitated in the suit for declaration and permanent injunction in the context of the local import agreement dated 03.06.2009 and the release press in respect thereto be referred to arbitration in consonance to the provisions of Section 45 of the Act of 1996.;