WORLD SPORT GROUP (MAURITIUS) LTD.versusMSM SATELLITE (SINGAPORE) PTE. LTD.

                          [2014) 1 S.C.R. 796

A           WORLD SPORT GROUP (MAURITIUS) LTD.
                                    v.
            MSM SATELLITE (SINGAPORE) PTE. LTD.
                (Civil Appeal No. 895 of 2014)
                          JANUARY 24, 2014
8
             [A.K. PATNAIK AND FAKKIR MOHAMED
                    IBRAHIM KALIFULLA, JJ.]

        Arbitration and Conciliation Act, 1996:
c      ss.44 and 45 - Foreign seated arbitration - Jurisdiction
  of High Court to pass an order of injunction restraining a
  foreign seated international arbitration at Singapore between
  the parties - Plea of respondent that the main agreement
D which contains the arbitration agreement is void because of
  fraud and misrepresentation by the appellant and therefore
  court cannot refer the parties to arbitration - Held: s.45 of the
  Act postulates that even where request of arbitration is made
  by a party, it will not refer the parties to arbitration, if it finds
  that the agreement is null and void, inoperative or incapable
E of being performed - The words "inoperative or incapable of
  being performed" in s.45 have been taken from Article II (3)
  of the New York Convention - Jn the case of such arbitrations
  covered by the New York Convention, the Court can decline
  to make a reference of a dispute covered by the arbitration
F agreement only if it comes to conclusion that the arbitration
  agreement is null and void, inoperative or incapable of being
  performed, and not on the ground that allegations of fraud or
  misrepresentation have to be inquired into while deciding the
  disputes between the parties - In the instant case, the
G allegation of fraudulent misrepresentation in the main
  agreement did not impact the validity of the arbitration
  agreement which was separable from the rest of the contract
  - Therefore, applying principle of separability parties were
  wrongly refused to refer arbitration on the ground that
H                                 796
  WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM                  797
       SATELLITE (SINGAPORE) PTE. LTD.

arbitration agreement was also void along with main                  A
agreement - Principle of separability.

     Arbitration restricting the right of the parties to move the
courts for appropriate relief and also barring the right to trial
by a jury - Whether void for being opposed to public policy          8
as provided in s.23 of the Indian Contract Act, 1872 and void
for being an agreement in restraint of the legal proceedings
in view of s.28 of the said Act - Held: Parliament has made
the Arbitration and Conciliation Act, 1996 providing domestic
arbitration and international arbitration as a mode of resolution    C
of disputes between the parties and Exception 1 to s. 28 of the
Contract Act, 1872 clearly states that s.28 shall not render
illegal a contract, by which two or more persons agree that any
dispute which may arise between them in respect of any
subject or class of subjects shall be referred to arbitration and
that only the amount awarded in such arbitration shall be            D
recoverable in respect of the dispute so referred - The right
to jury trial is not available Under Indian laws - In the instant
case, the finding of the Division Bench of the High Court that
arbitration clause of the Facilitation Deed is opposed to public
policy and is void u/ss.23 and 28 of the Contract Act, 1872 is       E
clearly erroneous - Contract Act, 1872 - ss.23, 28.

      Doctrines/Principles: Principle of Comity of Courts -
Applicability of - Plea of appellant that. on principle of comity
 of courts, the Bombay High Court should have refused to             F
 interfere in the matter and should have allowed the parties to
resolve their dispute through ICC arbitration subject to the
jurisdiction of the Singapore Courts in accordance with the
 arbitration clause of the Facilitation Deed - Held: Not
 applicable in the instant case, no decision of a court of foreign   G
country or no law of a foreign country was cited on behalf of
 the appellant to contend that the courts in India out of
deference to such decision of the foreign court or foreign Jaw
mu'st not assume jurisdiction to restrain arbitration
proceedings at Singapore - On the other hand, uls. 9 of the          H
   798      SUPREME COURT REPORTS                [2014] 1 S.C.R.

A CPC, the courts in India have jurisdiction to try all suits of a
  civil nature excepting suits of which cognizance is either
  expressly or impliedly barred - Thus, the appropriate civil
  court in India has jurisdiction to entertain the suit and pass
  appropriate orders in the suit by virtue of s.9 of the CPC -
B Code of Civil Procedure, 1908 - s. 9.
      The BCCI invited tenders for IPL Media Rights on a
  worldwide basis. Amongst the tenders submitted, the bid
  of WSG (India) was accepted by BCCI. By a pre-bid
  arrangement, however, the respondent was to get the
C media rights for the sub-continent for the period from
  2008 to 2010. On 21.01.2008, the BCCI and the
  respondent entered into a Media rights Licence
  Agreement for the period from 2008 to 2010. After the first
  IPL season, the BCCI terminated the agreement dated
D 21.01.2008 and entered into a new agreement with the
  WSG (India).

       Pursuant to the negotiations between BCCI and WSG
  (India), the BCCI entered into an agreement with the
E appellant whereunder the media rights for the Indian sub-
  continent was awarded to the appellant. To operate the
  media r~hts in India, the appellant was required to get a
  sub-licensee which it could not get within stipulated time.
  Thereafter, the appellant claimed to have allowed media
F rights in India to have lapsed and then facilitated on
  25.03.2009, a new Media Rights License Agreement
  between the BCCI and the respondent for the Indian sub-
  continent for the same contract value of Rs.4, 791.08
  crores. BCCI and WSG India, however, continued with
G the Rest of the World media rights.
      Thereafter the appellant entered into an agreement
  with the respondent called the Facilitation Deed
  whereunder the respondent was to pay a sum of Rs.425
  crores to the appellant as Facilitation fees. The
H respondent made three payments totaling Rs.125 crores
  WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM            799
       SATELLITE (SINGAPORE) PTE. LTD.

to the appellant under the Facilitation Deed during 2009      A
but did not make the balance payment. Instead, on
25.06.2010, the respondent wrote to the appellant
rescinding the Facilitation Deed on the ground that it was
voidable on account of misrepresentation and fraud. The
respondent also filed suit for a declaration that the         B
Facilitation Deed was void and for recovery of Rs.125
crores already paid to the appellant.

      On 28.6.2010, the appellant acting under Clause 9 of
the Facilitation Deed sent a request for arbitration to ICC   C
Singapore and ICC issued a notice to the respondent to
file its answer for arbitration.

    On 30.06.2010, the respondent filed a second suit
before the High Court against the appellant for a
declaration that as the Facilitation Deed stood rescinded,    D
the appellant was not entitled to invoke the arbitration
clause in the Facilitation Deed. The respondent also filed
an application for temporary injunction against the
appellant from continuing with the arbitration
proceedings commenced by the appellant under the              E
aegis of ICC.

     The Single Judge of the High Court dismissed the
application for temporary injunction of the respondent
saying that it would be for the arbitrator to consider        F
whether the Facilitation Deed was void on account of
fraud and misrepresentation and that the arbitration
must, there'fore, proceed and the Court could not
intervene in matters governed by the arbitration clause.
The Division Bench of the High Court allowed the appeal
and passed an order of temporary injunction restraining       G
the arbitration by ICC. Aggrieved, the appellant filed the
instant appeal.
    Allowing the appeal, the Court
                                                              H
    800    SUPREME COURT REPORTS                [2014] 1 S.C.R.


A        HELD: 1. The first plea of the appellant is not
  . accepted that as Clause 9 of the Facilitation Deed
    provides that any party may seek equitable relief in a
    court of competent jurisdiction in Singapore, or such
    other court that may have jurisdiction over the parties and
B that the Bombay High Court had no jurisdiction to
    entertain the suit and restrain the arbitration proceedings
    at Singapore because of the principle of Comity of
    Courts. What is meant by the principle of "comity" is that
    courts of one state or jurisdiction will give effect to the
c laws and judicial decisions of another state or
    jurisdiction, not as a matter of obligation but out of
    deference and mutual respect. In the instant case no
    decision of a court of foreign country or no law of a
    foreign country has been cited on behalf of the appellant
    to contend that the courts in India out of deference to
0
    such decision of the foreign court or foreign law must not
    assume jurisdiction to restrain arbitration proceedings.at
    Singapore. On the other hand, it was rightly submitted by
    the respondent that under Section 9 of the CPC, the
    courts in India have jurisdiction to try all suits of a civil
E nature excepting suits of which cognizance is either
    expressly or impliedly barred. Thus, the appropriate civil
    court in India has jurisdiction to entertain the suit and
    pass appropriate orders in the suit by virtue of Section 9
    of the CPC and Clause 9 of the Facilitation Deed providing
F that courts in Singapore or any other court having
    jurisdiction over the parties can be approached for
    equitable relief could not oust the jurisdiction of the
     appropriate civil court conferred by Section 9 of the CPC.
     In the plaint In second suit, it was stated that the
G Facilitation Deed in which the arbitration clause is
     incorporated came to be executed by the defendant at
     Mumbai and the fraudulent inducement on the part of the
     defendant resulting in the plaintiff entering into the
     Facilitation Deed took place in Mumbai and the
H rescission of the Facilitation Deed on the ground that it
   WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM               801
        SATELLITE (SINGAPORE) PTE. LTD.

 was induced by fraud of defendant has also been issued           A
 from Mumbai. Thus, the cause of action for filing the suit
 arose within the jurisdiction of the Bombay High Court
 and the Bombay High Court had territorial jurisdiction to
 entertain the suit under Section 20 of the CPC. [Para 20]
 [820-B-H; 821-A-D]                                               B

      Black's Law Dictionary, 5th Edition - referred to.

       1.2. Any civil court in India which entertains a suit,
  however, has to follow the mandate of the legislature in
  Sections 44 and 45 in Chapter I of Part II of the Arbitration   C
  and Conciliation Act. As per Section 45 of the Act,
  notwithstanding anything contained in Part I or in the
  Code of Civil Procedure, a judicial authority, when seized
  of an. action in a matter in respect of which the parties
  have made an agreement referred to in Section 44, shall,        D
  at the request of one of the parties or any person claiming
  through or under him, refer the parties to arbitration,
  unless it finds that the said agreement is null and void,
  inoperative or incapable of being performed. Thus, even
  if, under Section 9 read with Section 20 of the CPC, the        E
  Bombay High Court had the jurisdiction to entertain the
  suit, once a request is made by one of the parties or any
· person claiming through or under him to refer the parties
  to arbitration, the Bombay High Court was obliged to
  refer the parties to arbitration unless it found that the       F
  agreement referred to in Section 44 of the Act was null
  and void, inoperative or incapable of being performed. In
  the instant case, the appellant may not have made an
  application to refer the parties to arbit~tion, but Section
  45 of the Act does not refer to any application as such.        G
  Instead, it refers to the request of one of the parties or
  any person claiming through or under him to refer the
  parties to arbitration. In this case, the appellant has filed
  an affidavit in reply to the notice of motion and has stated
  therein that the defendant had already invoked the              H
    802     SUPREME COURT REPORTS                  [2014) 1 S.C.R.

A arbitration agreement in the Facilitation Deed and the
  arbitration proceedings have commenced and that the
  suit was an abuse of the process of court. The appellant
  had thus made a request to refer the parties to arbitration
  at Singapore which had already commenced. [para 21]
8 [821-E; 822-D-H; 823-A-B]
          2. Section 45 of the Act also makes it clear that even
    where such request is made by a party, it will not refer
    the parties to arbitration, if it finds that the agreement is
    null and void, inoperative or incapable of being
C   performed. As per Section 45 of the Act the word
    "agreement" would mean the agreement referred to in
    Section 44 of the Act. Clause (a) of Section 44 of the Act
    refers to "an agreement in writing for arbitration to \Vhich
    the Convention set forth in the First Schedule applies."
D   The First Schedule of the Act sets out the different Articles
    of the New York Convention on the Recognition and
    Enforcement of Foreign Arbitral Awards, 1958. It will be
    clear from clauses 1, 2 and 3 of the New York Convention
    as set out in the First Schedule of the Act that the
E   agreement referred to in Section 44 of the Act is an
    agreement in writing under which the parties undertake
    to submit to arbitration all or any differences which have
    arisen or which may arise between them. Thus, the court
    will decline to refer the parties to arbitration only if it finds
F   that the arbitration agreement is null and void, inoperative
     or incapable of being performed. [para 22] [823-B-E; 824-
     B-C]
       3. Applying the principle of separability to the facts
  of this case, the respondent rescinded the Facilitation
G Deed on the grounds that the appellant did not have any
  right to relinquish and/or to facilitate the procurement of
  Indian subcontinent media rights for the IPL from BCCI
  and no facilitation services could have been provided by
  the appellant and therefore the representation by the
H appellant that the appellant relinquished its Indian
   WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM            803
        SATELLITE (SINGAPORE) PTE. LTD.

 subcontinent media rights for the IPL in favour of the       A
 respondent for which the appellant had to be paid the
 facilitation fee under the deed was false and accordingly
 the Facilitation Deed was voidable at the option of the
 respondent on account of false representation and fraud.
 This ground of challenge to the Facilitation Deed does       B
 not in any manner affect the arbitration agreement
 contained in Clause 9 of the Facilitation Deed, which is
 independent of and separate from the main Facilitation
 Deed and does not get rescinded as void by the letter
 dated 25.06.2010 of the respondent. The Division Bench       c
 of the Bombay High Court, therefore, could not have
 refused to refer the parties to arbitration on the ground
 that the arbitration agreement was also void along with
 the main agreement. [Para 25] [826-H; 827-A; 828-E-H;
 829-A]                                                       D
       4. The plea of the respondent was that the arbitration
  agreement was inoperative or incapable of being
  performed as allegations of fraud could be enquired into
  by the court and not by the arbitrator. However, the
  authorities on the meaning of the words "inoperative or E
  incapable of being performed" do not support such plea.
  The words "inoperative or incapable of being performed"
  in Section 45 of the Act have been taken from Article II
  (3) of the New York Convention. Thus, the arbitration
  agreement does not become "inoperative or incapable of F
  being performed" where allegations of fraud have to be
  inquired into and the court cannot refuse to refer the
  parties to arbitration as provided in Section 45 of the Act
  on the ground that allegations of fraud have been made
  by the party which can only be inquired into by the court G
 .and not by the arbitrator. In the case of such arbitrations
· covered by the New York Convention, the Court can
  decline to make a reference of a dispute covered by the
  arbitration agreement only if it comes to the conclusion
  that the arbitration agreement is null and void, inoperative H
   804     SUPREME COURT REPORTS              [2014) 1 S.C.R.

A or incapable of being performed, and not on the ground
  that allegations of fraud or misrepresentation have to be
  inquired into while deciding the disputes between the
  parties. [paras 26, 29) [829-A-C; 831-D-G]

      N. Radhakrishnan v. Maestro Engineers & Ors. (2010)
B 1 SCC 72: 2009 (15) SCR 371; Abdul Kadir Shamsuddin
  Bubere v. Madhav Prabhakar Oak AIR 1962 SC 406:1962
  Suppl. SCR 702 - Distinguished.
       Redfern and Hunter on International Arbitration (Fifth
C Edition); Albert Jan Van Den Berg in an article titled "The
  New York Convention, 1958 -An Overview" published in
  the website of ICCA [www.arbitration-icca.org/medla/O/
  12125884227980/new york convention of 1958 overview
  .pdf]; 'Recognition and Conferment of Foreign Arbitral
D Awards: A Global Commentary on the New York
  Convention' by Kronke, Nacimiento, et al.(ed.) (2010) -
  referred to.

       5.1. The Division Bench of the High Court has held
E that the Facilitation Deed was part of several agreements
  entered into amongst different parties commencing from
  25.03.2009 and, therefore, cannot be considered as stand
  apart agreement between the appellant ·and the
  respondent and so considered the Facilitation Deed as
  contrary to public policy of India because it is linked with
F the finances, funds and rights of the BCCI, which is a
  public body. This approach of the Division Bench of the
  High Court is not in consonance with the provisions of
  Section 45 of the Act, which mandates that in the case
  of arbitration agreements covered by the New York
G Convention, the Court which is seized of the matter will
  refer the parties to arbitration unless the arbitration
  agreement is null and void, inoperative or incapable of
  being performed. In view of the provisions of Section 45
  of the Act, the Division Bench of the High Court was
H required to only consider in this case whether Clause 9
  WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM                805
       SATELLITE (SINGAPORE) PTE. LTD.

of the Facilitation Deed which contained the arbitration          A
agreement was null and void, inoperative or incapable of
being performed. The Division Bench of the High Court
has further held that Clause 9 of the Facilitation Deed
insofar as it restricted the right of the parties to move the
courts for appropriate relief and also barred the right to        B
trial by a jury was void for being opposed to public policy
as provided in Section 23 of the Indian Contract Act, 1872
and was also void for being an agreement in restraint of
the legal proceedings in view of Section 28 of the said
Act. Parliament has made the Arbitration and Conciliation         c
Act, 1996 providing domestic arbitration and international
arbitration as a mode of resolution of disputes between
the parties and Exception 1 to Section 28 of the Indian
Contract Act, 1872 clearly states that Section 28 shall not
render illegal a contract, by which two or more persons           0
agree that any dispute which may arise between them in
respect of any subject or class of subjects shall be
referred to arbitration and that only the amount awarded
in such arbitration shall be recoverable in respect of the
dispute so referred. Clause 9 of the Facilitation Deed is
consistent with this policy of the legislature as reflected       E
in the Arbitration and Conciliation Act, 1996 and is saved
by Exception 1 to Section 28 of the Indian Contract Act,
1872. The right to jury trial is not available under Indian
laws. The finding of the Division Bench of the High Court,
therefore, that Clause 9 of the Facilitation Deed is              F
opposed to public policy and is void under Sections 23
and 28 of the Indian Contract Act, 1872 is clearly
erroneous. [Paras 30, 31] [831-H; 832-A-H; 833-A-B]

     5.2. The Division Bench of the High Court has also           G
held that as allegations of fraud and serious malpractices
on the part of the appellant are in issue, it is only the court
which can decide these issues through furtherance of
judicial evidence by either party and these issues cannot
be properly gone into by the arbitrator. Section 45 of the        H
    806    SUPREME COURT REPORTS               [2014] 1 S.C.R.

A Act does not provide that the court will not refer the
  parties to arbitration if the allegations of fraud have to be
  inquired into. Section 45 provides that only if the court
  finds that the arbitration agreement is null and void,
  inoperative or incapable of being performed, it will
B decline to refer the parties to arbitration. The Division
  Bench of the High court has further held that since the
  earlier suit was pending in court since 25.06.2010 and
  that suit was inter-connected and inter-related with the
  second suit, the court could not allow splitting of the
C matters and disputes to be decided by the court in India
  in the first suit and by arbitration abroad in regard to the
  second suit and invite conflicting verdicts on the issues
  which are inter-related. This reasoning adopted by the
  Division Bench of the Bombay High Court in the
  impugned judgment is alien to the provisions of Section
0 45 of the Act which does not empower the court to
  decline a reference to arbitration on the ground that
  another suit on the same issue is pending in the Indian
  court. Hence, it has been rightly held by the Single Judge
  of the Bombay High Court that it is for the arbitrator to
E decide this dispute in accordance with the arbitration
  agreement. [Paras 32, 33, 34] [833-B-G; 834-D]

       Chloro Controls India Private Limited v. Seven Trent
  Water Purification Inc. & Ors. (2013) 1 SCC 641; National
F Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd. (2009) 1 SCC
  267: 2008 (13) SCR 638; Reva Electric Car Company Private
  Ltd. v. Green Mobil (2012) 2 SCC 9: 2011 (13) SCR 359;
  Branch Manager, Magma Leasing and Finance Ltd. & Anr.
  v. Potluri Madhavilata & Anr. (2009) 10 SCC 103: 2009 (14)
G SCR 815; V. 0. Tractoroexport, Moscow v. Tarapore &
  Company and Anr. (1969) 3 SCC 562:1970 (3) SCR 53; Oil
  and Natural Gas Commission v. Western Company of North
  America (1987) 1 SCC 496: 1987 (1) SCR 1024; SMS Tea
  Estates (P) Ltd. v. Chandmari Tea Co. (P) Ltd. (2011) 14 SCC
H 66: 2011 (9) SCR 382; Haryana Telecom Ltd. v. Sterlite
  WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM              807.
       SATELLITE (SINGAPORE) PTE. l TD.

Industries (India) Ltd. (1999) 5 SCC 688: 1999 (3) SCR 861;     A
Mis Zee Tele Films Ltd. & Anr. v. Union of India & Ors. AIR
2005 SC 2677:2005 (1) SCR 913; Booz Allen·& Hamilton v.
SB/ Home Finance (2011) 5 SCC 532: 2011 (7) SCR 310;
India Household and Healthcare Ltd. v. LG Household and
Healthcare Ltd. (2007) 5 SCC 510: 2007 (3) SCR 726 -            B
referred to.

     Premium Nafta Products Ltd. v. Fili Shipping Company
Ltd. & Ors. 2007 UKHL 40; United States in Buckeye Check
Cashing, Inc. v. John Cardegna et al 546 US 440 (2006);         C
Russel on Arbitration, para 7 -056, 7 -058, and Claxton
Engineering v. Txm olaj - es gaz Kutao Ktf [2011] EWHC 345
(COMM.) - referred to.

     Redfern An<:J Hunter On International Arbitration (Fifth
Edition page 134 para 2.141) - referred to.                     D

                     Case Law Reference:
    (2013) 1 sec 641         Referred to           Para 8

    2008 (13) SCR 638        Referred to           Para 9
                                                                E
    2011 (13) SCR 359        Referred to          Para 9

    2007 UKHL 40             Referred to          Para 9

    546 us 440 (2006)        Referred to          Para 9
                                                                F
    2009 (15) SCR 371        Distinguished        Para 10
    1962 Suppl. SCR 702 Distinguished             Para 10

    1970 (3) SCR 53          Referred to          Para 15
    1987 (1) SCR 1024        Referred to          Para 15       G

    2011 (9) SCR 382         Referred to          Para 16
    1999 (3) SCR 861         Referred to          Para 17

                                                                H
    808      SUPREME COURT REPORTS                 [2014] 1 S.C.R.


A         2005 (1) SCR 913         Referred to           Para 18
          2011 (7) SCR 310         Referred to           Para 18
          2007 (3) SCR 726         Referred to           Para 18

B        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 895
    of 2014.

        From the Judgment and Order dated 17.09.2010 of the
    High Court of Judicature at Bombay in Appeal (L) No. 534 of
    2010 in Notice of Motion No. 1809 of 2010 in Suit No. 1828 of
c   2010.

          K.K. Venugopal, V.K. Misra, Pojat T., line A., Swapnil
    Jain, Madhav Misra, Devendra Singh for the Appellant.

      Gopal Subramonium, Devansh Mohta, Vijay K. Sondhi,
D Sanjay Kumar, Ashish Prasad, Soham Kumar, Samir Ali Khan,
  Mayank Grover for the Respondent.

          The Judgment of the Court was delivered by

E         A.K. PATNAIK, J. 1. Leave granted.

         2. This is an appeal against the order dated 17.09.2010
    of the Division Bench of the Bombay High Court in Appeal
    (Lodging) No.534 of 2010.

F   Facts:

       3. The facts very briefly are that on 30.11.2007 the Board
  of Control for Cricket in India (for short 'BCCI') invited tenders
  for IPL (Indian Premier League) Media Rights for a period of
G ten years from 2008 to 2017 on a worldwide basis. Amongst
  the tenders submitted, the bid of World Sports Group India (for
  short 'WSG India') was accepted by BCCI. By a pre-bid
  arrangement, however, the respondent was to get the media
  rights for the sub-continent for the period from 2008 to 2010.
H Accordingly, on 21.01.2008 BCCI and the respondent entered
  WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 809
 SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]

into a Media Rights License Agreement for the period from           A
2008 to 2012 for a sum of US$274.50 million. After the first
IPL season, the BCCI terminated the agreement dated
21.01.2008 between BCCI and the respondent for the Indian
sub-continent and commenced negotiations with WSG India.
On 14.03.2009, the respondent filed a petition under Section        B
9 of the Arbitration and Conciliation Act, 1996 (for short 'the
Act') against the BCCI before the Bombay High Court praying
for injunction against the BCCI from acting on the termination
letter dated 14.03.2009 and for preventing BCCI from granting
the rights under the agreement dated 21.01.2008 to any third        c
party. Pursuant to the negotiations between BCCI and WSG
India, BCCI entered into an agreement with the appellant
whereunder the media rights for the Indian sub-continent for the
period 2009 to 2017 was awarded to the appellant for a value
of Rs.4, 791.08 crores. To operate the media rights in India, the   D
appellant was required to seek a sub-licensee within seventy
two hours. Though, this time period was extended twice, the
appellant was not able to get a sub-licensee. Thereafter, the
appellant claimed to have allowed media rights in India to have
lapsed and then facilitated on 25.03.2009, a new Media Rights       E
License Agreement between the BCCI and the respondent for
the Indian sub-continent for the same contract value of
Rs.4,791.08 crores. BCCI and WSG India, however, were to
continue with the Rest of the World media rights.

    4. On 25.03.2009, the appellant and the respondent also         F
executed the Deed for Provision of Facilitation Services
(hereinafter referred to as 'the Facilitation Deed') whereunder
the respondent was to pay a sum of Rs.425 crores to the
appellant as facilitation fees. Clause 9 of the Facilitation Deed
dated 25.03.2009 between the appellant and the respondent           G
was titled 'Governing Law' and read as follows:

    "9. GOVERNING LAW

    This Deed shall be governed by and construed in
    accordance with the laws of England and Wales, without          H
    810       SUPREME COURT REPORTS                   120141 1 s.c.R.

A          regard to choice of law principles. All actions or
           proceedings arising in connection with, touching upon or
           relating to this Deed, the breach thereof and/or the scope
           of the provisions of this Section shall be submitted to the
           International Chamber of Commerce (the "Chamber") for
B         final and binding arbitration under its Rules of Arbitration,
          to be held in Singapore, in the English language before a
          single arbitrator who shall be a retired judge with at least
          ten years of commercial experience. The arbitrator shall
          be selected by mutual agreement of the Parties, or, if the
c         Parties cannot agree, -then by striking from a list of
          arbitrators supplied by the Chamber. If the Parties are
          unable to agree on the arbitrator, the Chamber shall
          choose one for them. The arbitration shall be a confidential
          proceeding, closed to the general public. The arbitrator
          shall assess the cost of the arbitration against the losing
D
          party. In addition, the prevailing party in any arbitration or
          legal proceeding relating to this Deed shall be entitled to
          all reasonable expenses (including, without limitation,
          reasonable attorney's fees). Notwithstanding the foregoing,
          the arbitrator may require that such fees be borne in such
E         other manner as the arbitrator determines is required in
          order for this arbitration provision to be enforceable under
          applicable law. The arbitrator shall issue a written opinion
          stating the essential findings and conclusions upon which
          the arbitrator's award is based. The arbitrator shall have
F         the power to entsr temporary restraining orders and
          preliminary and permanent injunctions. No party shall be
          entitled or permitted to commence or maintain any action
          in a court of law with respect to any matter in dispute until
          such matter shall have been submitted to arbitration as
G         herein provided and then only for the enforcement of the
          arbitrator's award; provided, however, that prior to the
          appointment of the arbitrator or for remedies beyond the
          jurisdiction of an arbitrator, at any time, any party may seek
          equitable relief in a court of competent jurisdiction in
H         Singapore, or such other court that may have jurisdiction
  WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 811
 SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]

    over the Parties, without thereby waiving its right to            A
    arbitration of the dispute or controversy under this section.
    THE PARTIES HEREBY WAIVE THEIR RIGHT TO JURY
    TRIAL WITH RESPECT TO ALL CLAIMS AND ISSUES
    ARISING UNDER, IN CONNECTION WITH, TOUCHING
    UPON OR RELATING TO THIS DEED, THE BREACH                         B
    THEREOF AND/OR THE SCOPE OF THE PROVISIONS
    OF THIS SECTION, WHETHER SOUNDING IN
    CONTRACT OR TORT, AND INCLUDING ANY CLAIM
    FOR FRAUDULENT INDUCEMENT THEREOF."

       5. The respondent made three payments totaling Rs.125          C
crores to the appellant under the Facilitation Deed during 2009
and did not make the balance payment. Instead, on 25.06.2010,
the respondent wrote to the appellant rescinding the Facilitation
Deed on the ground that it was voidable on account of
misrepresentation and fraud. On 25.06.2010, the respondent            D
also filed Suit No.1869 of 2010 for inter alia a declaration that
the Facilitation Deed was void and for recovery of Rs.125
crores already paid to the appellant. On 28.06.2010, the
appellant acting under Clause 9 of the Facilitation Deed sent
'ii request for arbitration to ICC Singapore and the ICC issued       E
a   riotice to the respondent to file its answer to the requestfor
arbitration. In the meanwhile, on 30.06.2010, the respondent
filed a second suit, Suit No.1828 of 2010, before the Bombay
High Court against the appellant for inter alia a declaration that
as the Facilitation Deed stood rescinded, the appellant was not       F
entitled to invoke the arbitration clause in tbe Facilitation Deed.
The respondent also filed an application for temporary injunction
against the appellant from continuing with the arbitration
proceedings commenced by the appellant under the aegis of
ICC.                                                                  G

     6. On 09.08.2010, the learned Single Judge of the
Bombay High Court dismissed the application for temporary
injunction of the respondent saying that it would be for the
arbitrator to consider whether the Facilitation Deed was void
                                                                      H
    812      SUPREME COURT REPORTS                  [2014) 1 S.C.R.


A on account of fraud and misrepresentation and that the
  arbitration must, therefore, proceed and the Court could not
  intervene in matters governed by the arbitration clause. The
  respondent challenged the order of the learned Single Judge
  before the Division Bench of the Bombay High Court and by
B the impugned order, the Division Bench of the Bombay High
  Court allowed the appeal, set aside the order of the learned
  Single Judge and passed an order of temporary injunction
  restraining the arbitration by ICC. Aggrieved, the appellant has
  filed this appeal.
C Contentions on behalf of the appellant:

        7. Mr. K.K. Venugopal, learned senior counsel for the
  appellant, submitted that the Division Bench of the High Court
  failed to appreciate that the Bombay High Court had no
D jurisdiction to pass an order of injunction restraining a foreign
   seated international arbitration at Singapore between the
  parties, who were not residents of India. In this context, he
   referred to Clause 9 of the Facilitation Deed which stipulated
  that any party may seek equitable relief in a court of competent
E jurisdiction in Singapore, or such other court that may have
  jurisdiction over the parties. He submitted that on the principle
  of Comity of Courts, the Bombay High Court should have
   refused to interfere in the matter and should have allowed the
  parties to resolve their dispute through ICC arbitration, subject
F to the jurisdiction of the Singapore courts in accordance with
  Clause 9 of the Facilitation Deed.
       8. Mr. Venugopal next submitted that the Division Bench
  of the High Court failed to appreciate that under Section 45 of
  the Act, the Court seized of an action in a matter in respect of
G which the parties have made an agreement referred to in
  Section 44 has to refer the parties to arbitration, unless it finds
  that the agreement referred to in Section 44 is null and void,
  inoperative or incapable of being performed. He submitted that
  the agreement referred to in Section 44 of the Act is 'an
H agreement in writing for arbitration' and, therefore, unless the
   WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 813
  SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.)

Court finds that the agreement in writing for arbitration is null      A
and void, inoperative or incapable of being performed, the Court
will not entertain a dispute covered by the arbitration agreement
and refer the parties to the arbitration. In support of this
submission, he relied on the decision of this Court in Chloro
Controls India Private Limited v. Seven Trent Water                    B
Purification Inc. & Ors. [(2013) 1 SCC 641].

       9. Mr. Venugopal submitted that the Division Bench of the
  High Court, instead of examining whether the agreement in
 writing for arbitration was null and void, inoperative or             C
  incapable of being performed, has held that the entire
  Facilitation Deed was vitiated by fraud and misrepresentation
  and was, therefore, void. He vehemently submitted that it was
  for the arbitrator to decide whether the Facilitation Deed was
  void on account of fraud and misrepresentation as has been
  rightly held by the learned Single Judge and it was not for the      D
  Court to pronounce on whether the Facilitation Deed was void
. on account of fraud and misrepresentation. He referred to
  Article 6(4) of the ICC Rules of Arbitration which permits the
  Arbitral Tribunal to continue to exercise jurisdiction and
  adjudicate the claims even if the main contract is alleged to be     E
  null and void or non-existent because the arbitration clause is
  an independent and distinct agreement. He submitted that this
  principle of Kompetenz Kompetenz has been recognized in
  Section 16 of the Act under which the Arbitral Tribunal has the
  competence to rule on its own jurisdiction and on this point         F
  relied on National Insurance Co. Ltd. v. Boghara Polyfab Pvt.
  Ltd. [(2009) 1 SCC 267] and Reva Electric Car Company
  Private Ltd. v. Green Mobil [(2012) 2 SCC 93]. He submitted
 that as a corollary to this principle, Courts have also held that
  unless the arbitration clause itself, apart from the underlying      G
 contract, is assailed as vitiated by fraud or misrepresentation,
 the Arbitral Tribunal will have jurisdiction to decide all issues
  including the validity and scope of the arbitration agreement.
 He submitted that in the present case, the arbitration clause
 itself was not ass.ailed as vitiated by fraud or misrepresentation.   H
    814     SUPREME COURT REPORTS                  [2014] 1 S.C.R.


A In support of this argument, he relied on the decision of the
  House of Lords in Premium Nafta Products Ltd. v. Fili
  Shipping Company Ltd. & Ors. [2007] UKHL 40], the decision
  of the Supreme Court of United States in Buckeye Check
  Cashing, Inc. v. John Cardegna et al [546 US 440 (2006)] and
B the decision of this Court in Branch Manager, Magma Leasing
  and Finance Ltd. & Anr. v. Potluri Madhavilata & Anr. [(2009)
  10 sec 103].

          10. Mr. Venugopal submitted that the Division Bench of the
C   High Court relied on the decision in N. Radhakrishnan v.
    Maestro Engineers & Ors. [(2010) 1 SCC 72] to hold that
    serious allegations of fraud can only be enquired by a Court
    and not by an arbitrator, but the Division Bench failed to
    appreciate that in N. Radhakrishnan v. Maestro Engineers &
    Ors. (supra) this Court relied on Abdul Kadir Shamsuddin
D   Bubere v. Madhav Prabhakar Oak [AIR 1962 SC 406] in which
    it was observed that it is only a party against whom a fraud is
    alleged who can request the Court to inquire into the allegations
    of fraud instead of allowing the arbitrator to decide on the
    allegations of fraud. In the present case, the respondent has
E   alleged fraud against the appellant and thus it was for the
    appellant to make a request to the Court to decide on the
    allegations of fraud instead of referring the same to the
    arbitrator, and no such request has been made by the appellant.
    He further submitted that in any case the judgment of this Court
F   in N. Radhakrishnan v. Maestro Engineers & Ors. (supra) was
    rendered in the context of domestic arbitration in reference to
    the provisions of Section 8 of the Act. He submitted that the
    language of Section 45 of the Act, which applies to an
    international arbitration, is substantially different from the
G   language of Section 8 of the Act and it will be clear from the
    language of Section 45 of the Act that unless the arbitration
    agreement is null and void, inoperative or incapable of being
    performed, the parties will have to be referred to arbitration by
    the Court. In the present case, the respondent has not made
H
 WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM          815
SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.J_
out that the arbitration agreement is null and void, inoperative      A
or incapable of being performed.

      11. Mr. Venugopal submitted that the High Court has
taken a view that Clause 9 forecloses an open trial in a court
of law except to the extent permitted therein and the parties
                                                                      8
have to necessarily submit themselves to a confidential
proceeding which is closed to the general public. He submitted
that the Bombay High Court thus appears to have held that
Clause 9 is opposed to public policy and, in particular, Sections
23 and 28 of the Indian Contract Act, 1872. He submitted that
in any case the arbitration agreement contained in Clause 9           C
of the Facilitation Deed cannot be held to be opposed to public
policy and void under Sections 23 and 28 of the Indian Contract
Act, 1872. This will be clear from Exception 1 of Section 28 of
the Indian Contract Act, 1872, which says that the section shall
not render illegal a contract, by which two or more persons           D
agree that any dispute which may arise between them in
respect of any subject or class of subjects shall be referred to
arbitration and that only the amount awarded in such arbitration
shall be recoverable in respect of the dispute so referred. He
explained that under the American Law, in a suit for common           E
law where the value of claim is more than US$20, the right to
jury trial is preserved and this applies even in relation to claims
for breach of contract and for this reason, the parties made a
provision in Clause 9 of the Facilitation Deed waiving their right
to jury trial with respect to all claims and issues arising under,    F
in connection with, touching upon or relating to the Facilitation
Deed. He submitted that this provision in Clause 9 of the
Facilitation Deed cannot, therefore, be held to be opposed to
public policy.
                                                                      G
     12. Mr. Venugopal next submitted that the crux of the case
of the respondent is set out in its letter dated 25.06.2010 to
the appellant in which it was alleged that 'in view of the false
misrepresentations and fraud played by WSGM the deed is
~oidable at the option of our client and thus our client rescinds
                                                                      H
    816     SUPREME COURT REPORTS                   [2014] 1 S.C.R.


A the deed with immediate effect'. In other words, the
  respondent's case is that it was induced to enter into the
  Facilitation Deed on account of the misrepresentation by the
  appellant and was led to believe that it was paying the
  facilitation fees to the appellant to allow the rights of the
B appellant under an alleged agreement dated 23.03.2009 to
  lapse, but the respondent subsequently discovered that there
  was no agreement dated 23.03.2009 and the rights of the
  appellant had come to an end on 24.03.2009. He submitted
  that the appellant has denied these allegations of the
c respondent in its affidavit-in-reply filed before the Bombay High
  Court and that there was no false representation and fraud as
  alleged by the respondent. He submitted that the Facilitation
  Deed was executed by the senior executives of the parties and
  in the case of respondent, it was signed by Michael Grindon,
D President, International, Sony Picture Television, and the
  appellant and the respondent had entered into the Facilitation
  Deed after consulting their sports media experts and after a
  lot of negotiations. He submitted that in fact a Press Release
  was issued by the respondent on 23.04.2010, which will go to
  show that there was no misrepresentation and fraud by the
E appellant before the Facilitation Deed was signed by the
  parties, and thus the entire case of the respondent that the
  Facilitation Deed was vitiated by misrepresentation and fraud
  is false.
F      13. Mr. Venugopal finally submitted that it will be clear from
  the language of the letter dated 25.06.2010 of the respondent
  to the appellant that according to the respondent the Facilitation
  Deed was voidable at the option of the respondent. He
  submitted that under Section 45 of the Act, the Court will have
G to refer the parties to the arbitration unless it finds that the
  arbitration agreement is 'null and void'. He argued that an
  agreement which is voidable at the option of one of the parties
  is not the same as the agreement which is void and, therefore,
  the Division Bench of the High Court should have referred the
H parties to arbitration instead of restraining the arbitration.
 WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 817
SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]
According to Mr. Venugopal, this is a fit case in which this            A
Court should set aside the impugned order of the Division
bench of the High Court and restore the order of the learned
Single Judge of the High Court.

Contentions on behalf of the respondent:                                B
      14. In reply, Mr. Gopal Subramanium, learned senior
counsel appearing for the respondent, submitted that the
Division Bench of the Bombay High Court has rightly restrained
the arbitration proceedings under the aegis of ICC as the
Facilitation Deed, which also contains the arbitration agreement C
in Clause 9, is void because of fraud and misrepresentation
by the appellant. He submitted that Section 45 of the Act makes
it clear that the Court will not refer the parties to arbitration if
the arbitration agreement is null and void, inoperative or
incapable of being performed and as the respondent has taken D
the plea that the Facilitation Deed, which contained the
arbitration agreement, is null and void on account of
misrepresentation and fraud, the Court will have to decide
whether the Facilitation Deed including the arbitration
agreement in Clause 9 was void on account of fraud and E
misrepresentation by the appellant. He submitted that the
respondent filed the first suit in the Bombay High Court (Suit
No.1869 of 2010) for declaring the Facilitation Deed as null
and void but in the said suit, the appellant did not file a written
statement and instead issued the notice for arbitration only to . F
frustrate the first suit and in the circumstances the respondent
was compelled to file the second suit (Suit No.1828 .of 2010)
for an injunction restraining the arbitration.

     15. Mr. Subramanium submitted that Section 9 of the
Code of Civil Procedure, 1908 (for short 'the CPC') confers             G
upon the court jurisdiction to try all civil suits except suits which
are either expressly or impliedly barred. He submitted that the
Bombay High Court, therefore, had the jurisdiction to try both
the first suit and the second suit and there was no express or
implied bar in Section 45 of the Act restraining the Bombay             H
    818     SUPREME COURT REPORTS                  [2014] 1 S.C.R.

A High Court to try the first suit and the second suit. He submitted
  that in India as well as in England, Courts have power to issue
   injunctions to restrain parties from proceeding with arbitration
   proceedings in foreign countries. In support of this submission,
   he relied on V. 0. Tractoroexport, Moscow v. Tarapore &
B Company and Anr. [(1969) 3 SCC 562] and Oil and Natural
  Gas Commission v. Western Company of North America
  !(1987) 1 SCC 496]. He also relied on Russel on Arbitration,
  para 7-056, 7-058, and Claxton Engineering v. Txm olaj- es
  gaz Kutao Ktf [2011] EWHC 345 (COMM.).
c       16. Mr. Subramanium relying on the decision of this Court
  in Chloro Controls India Private Limited v. Seven Trent Water
  Purification Inc. & Ors. (supra) submitted that Section 45 of the
  Act casts an obligation on the court to determine the validity of
  the agreement at the threshold itself because this is an issue
D which goes to the root of the matter and a decision on this issue
  will prevent a futile exercise of proceedings before the
  arbitrator. He submitted that under Section 45 of the Act the
  Court is required to consider not only a challenge to the
  arbitration agreement but also a serious challenge to the
E substantive contract containing the arbitration agreement. He ·
  cited the decision of this Court in SMS Tea Estates (P) Ltd. v.
  Chandmari Tea Co. (P) Ltd. [(2011) 14 SCC 66] in support of
  this argument. He submitted that the contention on behalf of the
  appellant that the Court has to determine only whether the
F arbitration agreement contained in the main agreement is void
  is, therefore, not correct.
       17. Mr. Subramanium next submitted that in cases where
  allegations of fraud are prima facie made out, the judicial trend
G in India has been to have them adjudicated by the Court. In this
  context, he referred to the decisions of this Court in Abdul Kadir
  Shamsuddin Bubere v. Madhav Prabhakar Oak (supra),
  Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. [(1999)
  5 SCC 688] and N. Radhakrishnan v. Maestro Engineers &
H Ors. (supra). In reply to the submission of Mr. Venugopal that it
   WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 819
  SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]
  was only the parties against whom the allegations are made      A
  who can insist on the allegations being decided by the Court,
  Mr. Subramanium 'submitted that in the decision of the Madras
  High Court in H.G. Oomor Sait v. 0 Aslam Sait [(2001) 3 CTC
. 269 (Mad)] referred to in N. Radhakrishnan v. Maestro
  Engineers & Ors. (supra) the situation was reverse.             B

      18. Mr. Subramanium next submitted that the facts in this
 case prima facie establish that a grave fraud was played by
 the appellant not only upon the respondent but also on the
 BCCI. He argued that the Facilitation Deed ultimately deals with C
 media rights belonging to the BCCI and it has been held by
 this Court in Mis Zee Tele Films Ltd. & Anr. v. Union of India
 & Ors. [AIR 2005 SC 2677] that BCCI is a public body. He
 submitted that the Division Bench of the Bombay High Court
 has, therefore, rightly taken the view that the disputes in this
 case cannot be kept outside the purview of the Indian Courts D
 and if arbitration is allowed to go on without BCCI, the interest
 of BCCI will be adversely affected. He submitted that having
 regard to the magnitude of fraud alleged in the present case,
 the disputes were incapable of being arbitrated. Relying on
 Booz ~lien & Hamilton v. SB/ Home Finance [(2011) 5 SCC E
 532], Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd.
 (Supra), India Household and Healthcare Ltd. v. LG
 Household and Healthcare Ltd. [(2007) 5 SCC 510] and N.
 Radhakrishnan v. Maestro Engineers & Ors. (supra), he ·
 submitted that such allegations of fraud can only be inquired F
 into by the court and not by the arbitrator.
 Findings of the Court:
      19. The question that we have to decide is whether the
 Division Bench of the Bombay High Court could have passed ·G
 the order of injunction restraining the arbitration at Singapore
 between the parties. As various contentions have been raised
 by Mr. Venugopal, learned counsel for the appellant, in support
 of the case of the appellant that the Division Bench of the
 Bombay High Court could not have passed the order of · H
    820       SUPREME COURT REPORTS                   [2014] 1 S.C.R.

A injunction restraining the arbitration at Singapore, we may deal
  with each of these contentions separately and record our
  findings. While recording our findings, we will also deal with the
  submissions made by Mr. Gopal Subramanium on behalf of
  respondent in reply to the contentions of Mr. Venugopal. We
B will also consider the correctness of the findings of the Division
  Bench of the Bombay High Court separately.

       20. We are unable to accept the first contention of Mr.
  Venugopal that as Clause 9 of the Facilitation Deed provides
  that any party may seek equitable relief in a court of competent
C jurisdiction in Singapore, or such other court that may have
  jurisdiction over the parties, the Bombay High Court had no
  jurisdiction to entertain the suit and restrain the arbitration
  proceedings at Singapore because of the principle of Comity
  of Courts. In Black's Law Dictionary, 5th Edition, Judicial
D Comity, has been explained in the following words:
          •Judicial comity. The principle in accordance with which the
          courts of one state or jurisdiction will give effect to the laws
          and judicial decisions of another, not as a matter of ,
E         obligation, but out of deference and respect.·
  Thus, what is meant by the principle of "comity" is that courts
  of one state or jurisdiction will give effect to the laws and judicial
  decisions of another state or jurisdiction, not as a matter of
  obligation but out of deference and mutual respect. In the
F present case no decision of a court of foreign country or no law
  of a foreign country has been cited on behalf of the appellant
  to contend that the courts in lndi·a out of deference to such
  decision of the foreign court or foreign law must not assume
  jurisdiction to restrain arbitration proceedings at Singapore. On
G the other hand, as has been rightly submitted by Mr.
  Subramanium, under Section 9 of the CPC, the courts in India
  have jurisdiction to try all suits of a civil nature excepting suits
  of which cognizance is either expressly or impliedly barred.
  Thus, the appropriate civil court in India has jurisdiction to
H entertain the suit and pass appropriate orders in the suit by
   WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM         821
  SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]

 virtue of Section 9 of the CPC and Clause 9 of the Facilitation        A
 Deed providing that courts in Singapore or any other court
 having jurisdiction over the parties can be approached for
 equitable relief could not oust the jurisdiction of the appropriate
 civil court conferred by Section 9 of the CPC. We find that·in
 para 64 of the plaint in Suit No.1828 of 2010 filed before the         B
 Bombay High Court by the respondent, it is stated that the
 Facilitation Deed in which the arbitration clause is incorporated
 came to be executed by the defendant at Mumbai and the
 fraudulent inducement on the part of the defendant resulting in
 the plaintiff entering into the Facilitation Deed took place in        c
 Mumbai and the rescission of the Facilitation Deed on the
 ground that it was induced by fraud of defendant has also been
 issued from Mumbai. Thus, the cause of action for filing the suit
 arose within the jurisdiction of the Bombay High Court and the
 Bombay High Court had territorial jurisdiction to entertain the        D
 suit under Section 20 of the CPC.

       21. Any civil court in India which entertains a suit, however,
. has to follow the mandate of the legislature in Sections 44 and
  45 in Chapter I of Part II of the Act, which are quoted
  hereinbelow:                                                          E

                            "CHAPTER I

               NEW YORK CONVENTION AWARDS

      44. Definition. In this Chapter, unless the context               F
      otherwise requires, "foreign award" means an arbitral
      award on differences between persons arising out of legal
      relationships, whether contractual or not, considered as
      commercial 'under the law in force in India, made on or after
      the 11th day of October, 1960 -                                   G

       ,{fil   in pursuance of an agreement in writing for
               arbitration to which the Convention set forth in the
               First Schedule applies, and
                                                                        H
    822       SUPREME COURT REPORTS                  [2014] 1 S.C.R.


A          ill   in one of such territories as the Central Government,
                 being satisfied that reciprocal provisions have
                 been made may, by notification in the Official
                 Gazette, declare to be territories to which the said
                 Convention applies.
B
          45. Power of judicial authority to refer parties to
          arbitration.- Notwithstanding anything contained in Part I
          or in the Code of Civil Procedure, a judicial authority, when
          seized of an action in a matter in respect of which the
c         parties have made an agreement referred to in section 44,
          shall, at the request of one of the parties or any person
          claiming through or under him, refer the parties to
          arbitration, unless it finds that the said agreement is null
          and void, inoperative or incapable of being performed."
D The language of Section 45 of the Act quoted above makes it
  clear that notwithstanding anything contained in Part I or in the
  Code of Civil Procedure, a judicial authority, when seized of
  an action in a matter in respect of which the parties have made
  an agreement referred to in Section 44,'Shall, at the request of
E one of the parties or any person claiming through or under him,
  refer the parties to arbitration, unless it finds that the said
  agreement is null and void, inoperative or incapable of being
  performed. Thus, even if, under Section 9 read with Section 20
  of the CPC, the Bombay High Court had the jurisdiction to
F entertain the suit, once a request is made by one of the parties
  or any person claiming through or under him to refer the parties
  to arbitration, the Bombay High Court was obliged to refer the
  parties to arbitration unless it found that the agreement referred
  to in Section 44 of the Act was null and void, inoperative or
G incapable of being performed. In the present case, the appellant
  may not have made an application to refer the parties to
  arbitration, but Section 45 of the Act does not refer to any
  application as such. Instead, it refers to the request of one of
  the parties or any person claiming through or under him to refer
H the parties to arbitration. In this case, the appellant may not have
   WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 823
  SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]
 made an application to refer the parties to arbitration at           A
 Singapore but has filed an affidavit in reply to the notice of
 motion and has stated in paragraphs 3, 4 and 5 of this affidavit
 that the defendant had already invoked the arbitration
 agreement in the Facilitation Deed and the arbitration
 proceedings have commenced and that the suit was an abuse            B
 of the process of court. The appellant had thus made a request
 to refer the parties to arbitration at Singapore which had already
 commenced.
       22. Section 45 of the Act quoted above also makes it clear
  that even where such request is made by a party, it will not refer C
  the parties to arbitration, if it finds that the agreement is null and
  void, inoperative or incapable of being performed. As the very
  language of Section 45 of the Act clarifies the word "agreemenf'
  would mean the agreement referred to in Section 44 of the Act.
  Clause (a) of Section 44 of the Act refers to "an agreement in D
  writing for·arbitration to which the Convention set forth in the
, First Schedule applies.· The First Schedule of the Act sets out
  the different Articles of the New York Convention on the
  Recognition and Enforcement of Foreign Arbitral Awards,
  1958. Article II of the New York Convention is extracted E
  herein below:
      "1. Each Contracting State shall recognize an agreement
      in writing under which the parties undertake to submit to
      arbitration all or any differences which have arisen or which   F
      may arise between them in respect of defined legal
      relationship, whether contractual or not, concerning a
      subject-matter capable of settlement by arbitration.
      2. The term "agreement in writing" shall include an arbitral
      clause in a contract or an arbitration agreement, signed G
      by the parties or contained in an exchange of letters or
      telegrams.
      3. The court of a Contracting State, when seized of an
      action in. a matter in respect of which the parties have        H
    824       SUPREME COURT REPORTS                    [2014] 1 S.C.R.


A         made an agreement within the meaning of this article, shall,
          at the request of one of the parties, refer the parties to
          arbitration, unless it finds that the said agreement is null
          and void, inoperative or incapable of being performed."
  It will be clear from clauses 1, 2 and 3 of the New York
8
  Convention as set out in the First Schedule of the Act that the
  agreement referred to in Section 44 of the Act is an agreement
  in writing under which the parties undertake to submit to
  arbitration all or any differences which have arisen or which may
  arise between them. Thus, the court will decline to refer the
C parties to arbitration only if it finds that the arbitration agreement
  is null and void, inoperative or incapable of being performed.

        23. According to Mr. Subramanium, however, as the main
  agreement is voidable on account of fraud and
D misrepresentation by the appellant, clause 9 of the main
  agreement which contains the arbitration agreement in writing
  is also null and void. In support of his submission, he cited the
  decision of this Court in SMS Tea Estates (P) Ltd. v.
  Chandmari Tea Co. (P) Ltd. (supra). Paragraphs 12 and 13
E of the judgment of this Court in SMS Tea Estates (P) Ltd. v.
  Chandmari Tea Co. (P) Ltd. (supra) are quoted hereinbelow:
          "12. When a contract contains an arbitration agreement,
          it is a collateral term relating to the resolution of disputes,
          unrelated to the performance of the contract. It is as if two
F         contracts-one in regard to the substantive terms of the
          main contract and the other relating to resolution of
          disputes-had been rolled into one, for purposes of
          convenience. An arbitration clause is therefore an
          agreement independent of the other terms of the contract
G         or the instrument. Resultantly, even if the contract or its
          performance is terminated or comes to an end on account
          of repudiation, frustration or breach of contract, the
          arbitration agreement would survive for the purpose of
          resolution of disputes arising under or in connection with
H         the contract.
  WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 825
 SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]
    13. Similarly, when an instrument or deed of transfer (or a      A
    document affecting immovable property) contains an
    arbitration agreement, it is a collateral term relating to
    resolution of disputes, unrelated to the transfer or
    transaction affecting the immovable property. It is as if two
    documents-one affecting the immovable property                   B
    requiring registration and the other relating to resolution of
    disputes which is not compulsorily registerable-are rolled
    into a single instrument. Therefore, even if a deed of
    transfer of immovable property is challenged as not valid
    or enforceable, the arbitration agreement would remain           c
    unaffected for the purpose of resolution of disputes arising
    with reference to the deed of transfer."

In the aforesaid case, this Court has held that if the document
containing the main agreement is not found to be duly stamped,
even if it contains arbitration clause, it cannot be acted upon      D
because Section 35 of the Stamp Act bars the said document
from being acted upon, but if the document is found to be duly
stamped but not registered though required to be compulsorily
registered, the court can act upon the arbitration agreement
which is a collateral term of the main agreement and is saved        E
by the proviso to Section 49 of the Registration Act. Thus, as
per the aforesaid decision of this Court in SMS Tea Estates
(P) Ltd. v. Chandmari Tea Co. (P) Ltd. (supra), the court will
have to see in each case whether the arbitration agreement is
also void, unenforceable or inoperative along with the main          F
agreement or whether the arbitration agreement stands apart
from the main agreement and is not null and void.
    24. The House of Lords has explained this principle of
separability in Premium Nafta Products Ltd. v. Fili Shipping G
Company Ltd. & Ors. (supra) thus:
    "17. The principle of separability enacted in section 7
    means that the invalidity or rescission of the main contract
    does not necessarily entail the invalidity or rescission of
    the arbitration agreement. The arbitration agreement must        H
    826       SUPREME COURT REPORTS                  [2014] 1 S.C.R.

A         be treated as a "distinct agreemenr and can be void or
          voidable only on grounds which relate directly to the
          arbitration agreement. Of course there may be cases in
          which the ground upon which the main agreement is invalid
          is identical with the ground upon which the arbitration
B         agreement is invalid. For example, if the main agreement
          and the arbitration agreement are contained in the same
          document and one of the parties claims that he never
          agreed to anything in the document and that his signature
          was forged, that will be an attack on the validity of the
c         arbitration agreement. But the ground of attack is not that
          the main agreement was invalid. It is that the signature to
          the arbitration agreement, as a "distinct agreement•, was
          forged. Similarly, if a party alleges that someone who
          purported to sign as agent on his behalf had no authority
          whatever to conclude any agreement on his behalf, that is
D
          an attack on both the main agreement and the arbitration
          agreement.

          18. On the other hand, if (as in this case) the allegation is
          that the agent exceeded his authority by entering into a
E         main agreement in terms which were not authorized or for
          improper reasons, that is not necessarily an attack on the
          arbitration agreement. It would have to be shown that
          whatever the terms of the main agreement or the reasons
          for which the agent concluded it, he would have had no
F         authority to enter into an arbitration agreement. Even if the
          allegation is that there was no concluded agreement (for
          example, that terms of the main agreement remained to
          be agreed) that is not necessarily an attack on the
          arbitration agreement. If the arbitration clause has been
G         agreed, the patties will be presumed to have intended the
          question of whether there was a concluded main
          agreement to be decided by arbitration."

      25. Applying the principle of separability to the facts of this
H case, the respondent rescinded the Facilitation Deed by notice
 WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM         827
SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]

dated 25.06.2010 to the appellant on the following grounds           A
stated in the said notice by its lawyers:

    "1. Reference is made to the Deed for the Provison of
    Facilitation Services dated March 25, 2009 (the "Deed")
    between World Sport Group (Mauritius) Limited ("WSGM")
                                                                     8
    and our client. Under the Deed, which is styled as a
    facilitation agreement, our client agreed to pay WSGM
    "facilitation" fees for the "facilitation" services stated
    thereunder to have been provided by WSGM. The
    underlying consideration for the payments by our client to       C
    WSGM, in fact were the representation made by WSGM
    that : (a) WSGM, had executed in India ("BCCI")
    whereunder WSGM had been unfettered Global Media
    Rights ("the said rights"), including the Indian Subcontinent
    (implying thereby as natural corollary that the earlier Media
    Rights agreement dated March 15, 2009 between WSGM               D
    and BCCI along with its restrictive conditions had been
    mutually terminated); (b) WSGM could thereafter relinquish
    the Media Rights for the Indian Subcontinent in favour of
    our client for said valuable consideration to enable our
    client to enter into a direct agreement with BCCI; (c) the       E
    said rights were subsisting with WSGM at the time of
    execution of the Deed, i.e, March 25, 2009; and (d)
    WSGM had relinquished those rights in favour of BCCI to
    enable BCCI and our client to execute a direct Media
    Rights License Agreement for the Indian Subcontinent.            F

    2. BCCI has recently brought to the attention of our client
    that the Global Media Rights agreement between WSGM
    and BCCI dated March 23, 2009 does not exist and in
    terms of Clause 13.5 of the agreement dated March 15,            G
    2009, after expiry of the 2nd extension the media rights
    had automatically reverted to BCCI at 3 a.m. on March 24,
    2009 and thus at the time of execution of the Deed, WSGM
    did not have any rights to relinquish and/or to facilitate the
    procurement of India Subcontinent media rights for the IPL       H
    828       SUPREME COURT REPORTS                   [2014] 1 S.C.R.


A         from BCCI and thus no facilitation services could have been
          provided by WSGM.
          3. In view of the above, it is evident that the representation
          by WSGM that WSGM relinquished its Indian
          Subcontinent media rights for the IPL in favour of our client
B
          to pay the "facilitation" fees under the Deed.
          4. Taking cognizance of the same, BCCl's Governing
          council at its meeting held at Mumbai, India on June 25,
          201 O appropriately executed an amendment to Media
c         Rights License Agreement dated March 25, 2009 between
          BCCI and our client by deleting, inter alia, clause 10.4
          thereof.

          5. On its part, and in view of the false representations and
D         fraud played by WSGM, the Deed is voidable at the option
          of our client and thus our client rescinds the Deed with
          immediate effect.·
  The ground taken by respondent to rescind the Facilitation Deed
  thus is that the appellant did not have any right to relinquish and/
E or to facilitate the procurement of Indian subcontinent media
  rights for the IPL from BCCI and no facilitation services could
  have been provided by the appellant and therefore the
  representation by the appellant that the appellant relinquished
  its Indian subcontinent media rights for the IPL in favour of the
F respondent for which the appellant had to be paid the facilitation
  fee under the deed was false and accordingly the Facilitation
   Deed was voidable at the option of the respondent on account
   of false representation and fraud. This ground of challenge to
  the Facilitation Deed does not in any manner affect the
G arbitration agreement contained in Clause 9 of the Facilitation
   Deed, which is independent of and separate from the main
   Facilitation Deed and does not get rescinded as void by the
   letter dated 25.06.2010 of the respondent. The Division Bench
   of the Bombay High Court, therefore, could not have refused
H to refer the parties to arbitration on the ground that the
  WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 829
 SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]

arbitration agreement was also void along with the main                A
agreement.

     26. Mr. Gopal Subramanium's contention, however, is also
that the arbitration agreement was inoperative or incapable of
being performed as allegations of fraud could be enquired into         B
by the court and not by the arbitrator. The authorities on the
meaning of the words "inoperative or incapable of being
performed" do not support this contention of Mr. Subramanium.
The words "inoperative or incapable of being performed" in
Section 45 of the Act have been taken from Article II (3) of the       C
New York Convention as set out in para 22 of this judgment.
Redfern and Hunter on International Arbitration (Fifth Edition)
published by the Oxford University Press has explained the
meaning of these words "inoperative or incapable of being
performed" used in the New York Convention at page 148, thus:
                                                                       D
    "At first sight it is difficult to see a distinction between the
    terms 'inoperative' and 'incapable of being performed'.
    However, an arbitration clause is inoperative where it has
    ceased to have effect as a result, for example, of a failure
    by the parties to comply with a time limit, or where the           E
    parties have by their conduct impliedly revoked the
    arbitration agreement. By contrast, the expression
    'incapable of being performed' appears to refer to more
    practical aspects of the prospective arbitration
    proceedings. It applies, for example, if for some reason it        F
    is impossible to establish the arbitral tribunal."

     27. Albert Jan Van Den Berg in an article titled "The New
York Convention, 1958 -An Overview" published in the website
of ICCA [www.arbitration-icca.org/media/0/12125884227980/
new_york_convention_of-1958_overview.pdf], referring to                G
Article 11(3) of the New York Convention, states:

    "The words "null and void' may be interpreted as referring
    to those cases where the arbitration agreement is affected
    by some invalidity right from the beginning, such as lack          H
    830       SUPREME COURT REPORTS                    [2014] 1 S.C.R.

A         of consent due to misrepresentation, duress, fraud or
          undue influence.

          The word "inoperative" can be said to cover those cases
          where the arbitration agreement has ceased to have
          effect, such as revocation by the parties.
B
          The words "incapable of being performec!' would seem
          to apply to those cases where the arbitration cannot be
          effectively set into motion. This may happen ·where the
          arbitration clause is too vaguely worded, or other terms of
c         the contract contradict the parties' intention to arbitrate, as
          in the case of the so-called co-equal forum selection
          clauses. Even in these cases, the courts interpret the
          contract provisions in favour of arbitration."

D       28. The book 'Recognition and Conferment of Foreign
    Arbitral Awards: A Global Commentary on the New York
    Convention' by Kronke, Nacimiento, et al.(ed.) (2010) at page
    82 says:

          "Most authorities hold that the same schools of thought
E         and approaches regarding the term null and void also
          apply to the terms inoperative and incapable of being
          performed. Consequently, the majority of authorities do not
          interpret these terms uniformly, resulting in an unfortunate
          lack of uniformity. With that caveat, we shall give an
F         overview of typical examples where arbitration agreements
          were held to be (or not to be) inoperative or incapable of
          being performed.

         The terms inoperative refers to cases where the arbitration
G        agreement has ceased to have effect by the time the court
         is asked to refer the parties to arbitration. For example,
         the arbitration agreement ceases to have effect if there has
         already been an arbitral award or a court decision with res
        judicata effect concerning the same subject matter and
         parties. However, the mere existence of multiple
H
 WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 831
SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]

    proceedings is not sufficient to render the arbitration              A
    agreement inoperative. Additionally, the arbitration
    agreement can cease to have effect if the time limit for
    initiating the arbitration or rendering the award has expired,
    provided that it was the parties' intent no longer to be bound
    by the arbitration agreement due to the expiration of this           B
    time limit.

    Finally, several authorities have held that the arbitration
    agreement ceases to have effect if the parties waive
    arbitration. There are many possible ways of waiving a               C
    right to arbitrate. Most commonly, a party will waive the
    right to arbitrate if, in a court proceeding, it fails to properly
    invoke the arbitration agreement or if it actively pursues
    claims covered by the arbitration agreement."

      29. Thus, the arbitration agreement does not become                D
"inoperative or incapable of being performed" where allegations
of fraud have to be inquired into and the court cannot refuse to
refer the parties to arbitration as provided in Section 45 of the
Act on the ground that allegations of fraud have been made by
the party which can only be inquired into by the court and not           E
by the arbitrator. N. Radhakrishnan v. Maestro Engineers &
Ors. (supra) and Abdul Kadir Shamsuddin Bubere v. Madhav
Prabhakar Oak (supra) were decisions rendered in the context
of domestic arbitration and not in the context of arbitrations
under the New York Convention to which Section 45 of the Act             F
applies. In the case of such arbitrations covered by the New
York Convention, the Court can decline to make a reference
of a dispute covered by the arbitration agreement only if it
comes to the conclusion that the arbitration agreement is null
and void, inoperative or incapable of being performed, and not           G
on the ground that allegations of fraud or misrepresentation
have to be inquired into while deciding the disputes between
the parties.

     30. We may now consider the correctness of the findings
of the Division Bench of the High Court in the impugned                  H
    832      SUPREME COURT REPORTS                  [2014] 1 S.C.R.


A judgment. The Division Bench of the High Court has held that
  the Facilitation Deed was part of several agreements entered
  into amongst different parties commencing from 25.03.2009
  and, therefore, cannot be considered as stand apart agreement
  between the appellant and the respondent and so considered
B the Facilitation Deed as contrary to public policy of India
  because it is linked with the finances, funds and rights of the
  BCCI, which is a public body. This approach of the Division
  Bench of the High Court is not in consonance with the provisions
  of Section 45 of the Act, which mandates that in the case of
c arbitration agreements covered by the New York Convention,
  the Court which is seized of the matter will refer the parties to
  arbitration unless the arbitration agreement is null and void,
  inoperative or incapable of being performed. In view of the
  provisions of Section 45 of the Act, the Division Bench of the
  High Court was required to only consider in this case whether
D Clause 9 of the Facilitation Deed which contained the arbitration
  agreement was null and void, inoperative or incapable of being
  performed.

         31. The Division Bench of the High Court has further held
E   that Clause 9 of the Facilitation Deed insofar as it restricted
    the right of the parties to move the courts for appropriate relief
    and also barred the right to trial by a jury was void for being
    opposed to public policy as provided in Section 23 of the
    Indian Contract Act, 1872 and was also void for being an
F   agreement in restraint of the legal proceedings in view of
    Section 28 of the said Act. Parliament has made the
    Arbitration and Conciliation Act, 1996 providing domestic
    arbitration and international arbitration as a mode of resolution
    of disputes between the parties and Exception 1 to Section 28
G   of the Indian Contract Act, 1872 clearly states that Section 28
    shall not render illegal a contract, by which two or more persons
    agree that any dispute which may arise between them in
    respect of any subject or class of subjects shall be referred to
    arbitration and that only the amount awarded in such arbitration
H   shall be recoverable in respect of the dispute so referred.
   WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM 833
  SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]

 Clause 9 of the Facilitation Deed is consistent with this policy       A
 of the legislature as reflected in the Arbitration and Conciliation
 Act, 1996 and is saved by Exception 1 to Section 28 of the
 Indian Contract Act, 1872. The right to jury trial is not available
 under Indian laws. The finding of the Division Bench of the High
 Court, therefore, that Clause 9 of the Facilitation Deed is            B
 opposed to public policy and is void under Sections 23 and
 28 of the Indian Contract Act, 1872 is clearly erroneous.

       32. The Division Bench of the High Court has also held
 that as allegations of fraud and serious malpractices on the part
 of the appellant are in issue, it is only the court which can decide   C
 these issues through furtherance of judicial evidence by either
 party and these issues cannot be properly gone into by the
 arbitrator. As we have already held, Section 45 of the Act does
 not provide that the court will not refer the parties to arbitration
 if the allegations of fraud have to be inquired into. Section 45       D
 provides that only if the court finds that the arbitration agreement
 is null and void, inoperative or incapable of being performed,
 it will decline to refer the parties to arbitration.

       33. The Division Bench of the High court has further held        E
  that since the earlier suit (Suit No.1869 of 2010) was pending
  in court since 25.06.2010 and that suit was inter-connected and
  inter-related with the second suit (Suit No.1828 of 2010), the
, court could not allow splitting of the matters and disputes to be
  decided by the court in India in the first suit and by arbitration    F
  abroad in regard to the second suit and invite conflicting verdicts
  on the issues which are inter-related. This reasoning adopted
  by the Division Bench of the Bombay High· Court in the
  impugned judgment is alien to the provisions of Section 45 of
  the Act which does not empower the court to decline a reference       G
  to arbitration on the ground that another suit on the same issue
  is pending in the Indian court.

     34. We make it clear that we have not expressed any
 opinion on the dispute between the appellant and the
 respondent as to whether the Facilitation Deed was voidable            H
    834        SUPREME COURT REPORTS                    [2014) 1 S.C.R.

A or not on account of fraud and misrepresentation. Clause 9 of
  the Facilitation Deed states inter alia that all actions or
  proceedings arising in connection with, touching upon or relating
  to the Facilitation Deed, the breach thereof and/or the scope
  of the provisions of the Section shall be submitted to the ICC
B for final and binding arbitration under its Rules of Arbitration.
  This arbitration agreement in Clause 9 is wide enough to bring
  this dispute within the scope of arbitration. To quote Redfern
  And Hunter On International Arbitration (Fifth Edition page 134
  para 2.141)
c          "Where allegations of fraud in the procurement or
           performance of a contract are alleged, there appears to
           be no reason for the arbitral tribunal to decline jurisdiction."

       Hence, it has been rightly held by the learned Single Judge
D of the Bombay High Court that it is for the arbitrator to decide
  this dispute in accordance with the arbitration agreement.

       35. For the aforesaid reasons, we allow the appeal, set
  aside the impugned judgment of the Division Bench of the High
E Court and restore the order of the learned Single Judge. The
  parties shall bear their own costs.

    D.G.                                                Appeal allowed.