CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT WATER PURIFICATION INC. AND ORS.

135Copy pinpoint135. The Corporate structure of the companies in the present case has already been stated by us in paragraph 7 which we need not refer here again in detail. Suffice it to note that Kocha group had floated a company and incorporated the same under the Indian laws, which was carrying on the business of manufacture of chlorination equipment under the name and style 'Chloro Control India Private Limited'. They were negotiating with Severn Trent Water Purification Inc. for an international joint venture agreement to deal with the manufacture, distribution and sale of gas chlorination equipment and electro-chlorination equipment, "Hypogen Series 3300" etc. On this basis, they had entered into a joint venture agreement which was signed between them. The joint venture agreement contemplated that the business shall be carried on under the name and style of Capital Controls India Ltd. Private Limited. The agreements gave 50 per cent shareholding to the foreign collaborators which were to be equally divided between Capital Control (Del) Company Inc. and Capital Control Company Inc. G These joint venture agreements were executed between the parties on 16th November, 1995 but the joint venture company had been incorporated on 14th November, 1995 itself. Severn Trent Services (Del) Inc. is the holding company of the companies which have entered into the joint venture agreement for floating both, the Capital Control India Ltd. as well as Severn H

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A Trent De Nora LLC. The disputes had arisen actually between the Kocha Group on the one hand and Severn Trent Water Purification Inc. on the other, and the disputes were mainly with regard to Capital Control (India) Pvt. Ltd. Inc. Now, we must note, even at the cost of repetition, the parties signatory to each of B these agreements and we must also note which of these agreements did not contain arbitration clause. Shareholders Agreement dated 16th November, 1995 was executed between the Capital Control (Delaware) Company Inc. and Chloro Control India Private Ltd. Capital Control Delaware Company c Inc. was a subsidiary of Severn Trent Services (Delaware) Inc. and was formed on 21st September, 1994. Capital Control Company Inc. came to be merged with Capital Control (Delaware) Company Inc. in March 1994. As a result the Capital Control Delaware Company was no more in existence. Thus, D the reference to Capital Control Company Inc. includes reference to Capital Control Company Inc. as well as Capital Control (Delaware) Company Inc.

136Copy pinpoint136. The corporate structure of the Companies involved in the present litigation clearly shows that name of Capital E Control Company Inc., incorporated in the year 1994, was changed to Severn Trent Water Purification Inc. with effect from April, 2002. Thus, both these companies together were subsidiaries of the holding company Severn Trent Services (Delaware) Inc. The joint venture agreement was executed between Chloro Control (India) Pvt. Ltd. and the erstwhile Capital Control Company Inc. resulting into creation of the joint venture company, Capital Control (India) Pvt. Ltd. This is the basic structure which one has to make clear before examining the agreements and their impact. The negotiations between the appellant and the respondent nos.1 and 2 or their holding companies were going on since 1990 and ultimately culminated into execution of the joint venture agreement. In terms of the Shareholders Agreement, the authorized share capital of the company was five million rupees consisting of equity shares of Rs.10/- each. Initially the parties had decided to issue equity H

CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT 501 WATER PURIFICATION INC. [SWATANTER KUMAR, J.] capital of 1,50,000 equity shares of Rs.10/- each with 50% of A the initial equity to Capital Controls and the remaining 50% to Chloro Controls. It is necessary to refer in some detail the relevant clauses of this Agreement as this agreement is the 'Principal or the Mother Agreement'. All other agreements were executed in furtherance to and for achieving the purpose of this B Agreement. This agreement notices that Capital Control was engaged in the design, manufacture, import, marketing, export etc. of gas and electro-chlorination equipments. The company was to be registered and as is evident, in furtherance to the negotiations, steps for registration of the said company had c been taken and finally it came to be incorporated on 14th November, 1995. The main object of the joint venture company was the manufacture, service and sale of the products. In terms of the Principal Agreement, establishment of a plant, management of the company, appointment of Directors, D implementation of decisions of the Board of Directors, appointment or re-appointment of the Managing Director, dividend policy, loans, financial information, trademarks, transfer of shares, sale-purchase of chlorination equipment, assets, government approvals, performance of Chloro Controls, trademark, service of notices, modifications, severability and arbitration, settlement of disputes by arbitration etc. were the matters specifically provided for under this agreement. A very significant feature of this contract was that the Kocha Group was put under an injunction to not engage directly or indirectly or be financially interested in the manufacture, sale or distribution of chlorination equipment and related products, which is similar to those manufactured or sold by the company during the term of the agreement. Similarly, a restriction was also placed upon Capital Controls and even its holding companies to not directly or indirectly engage in or to be financially interested in the manufacture, sale or distribution in India of products manufactured or sold by the company, during the term of the agreement.

137Copy pinpoint137. The Principal Agreement specifically referred to H

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A various agreements or even terms and conditions thereof. Clause 7 of the agreement provided for execution of the International Distributor Agreement which was Appendix II to this Agreement. The Financial and Technical Know-how Licence Agreement was executed in furtherance to clause 14 thereof. B Similarly, the Trademark Registered User License Agreement was required to be executed between the parties in terms of clause 15 of this Agreement. Other terms and conditions of the Principal Agreement referred to management of the company by appointment or reappointment of Directors or Managing c Directors inasmuch as Clause 8.6 contemplated execution of the agreement which was appended as Appendix Ill. Still, certain other clauses of the Principal Agreement specifically dealt with the sale of goods manufactured by the joint venture company, nationally and internationally. This resulted in signing D of the International Distribution and Export Sales Agreement between the parties.

138Copy pinpoint138. All the five agreements signed by the parties were primarily to fulfill their obligations and ensure performance of this Principal Agreement. The Supplementary Collaboration E Agreement executed in August 1997 was only to comply with the conditions of the Government Approval which were granted vide letter dated 11th October, 1996, as amended by letter dated 21st April, 1997. The companies which executed the various agreements were the companies signatory to the F Principal Agreement or their holding companies or the companies belonging to the respondent group in which they had got merged for the purposes of attaining effective designing, manufacturing, import, export and marketing of the agreed chlorinated products.

139Copy pinpoint139. All the subsequent agreements were, therefore, ancillary or incidental agreements to the Principal Agreement. Thus, the joint venture entered between the parties had different facets. Its foundation was provided under the Principal Agreement but all the agreed terms could only be fulfilled by performance of the ancillary agreements. If one segregates the

CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT 503 WATER PURIFICATION INC. [SWATANTER KUMAR, J.]

Principal Agreement from the rest, the subsequent agreements would be rendered ineffective. If the agreed goods were not manufactured in India with the technical know-how of the respondent No. 1 company and the joint venture company was not incorporated, the question of the Distribution Agreement, Managing Director Agreement, Financial and Technical Know- 8 How License Agreement or the Export Sales Agreement would not have even arisen, in any event. Conversely, if the ancillary agreements were not performed in a collective manner, the Principal Agreement would be of no consequence. In other words, it was one composite transaction for attaining the C purpose of business of the joint venture company. All these agreements are so intrinsically connected to each other that it is neither possible nor probable to imagine the execution and implementation of one without the collective performance of all the other agreements. The intention of the parties was clear that all these agreements were being executed as integral parts of 0 a composite transaction. It can safely be covered under the principle of 'agreements within an agreement'. For instance, the Financial and Technical Know-How License Agreement not only finds a specific mention in the Principal Agreement but its contents also are referable to the clauses of the Principal E Agreement. The Financial and Technical Know-How License Agreement was Appendix Ill to the Principal Agreement and the details of the goods which were contemplated to be manufactured, distributed and sold under the Principal Agreement had been specified in Appendix I of the Financial F and Technical Know-How Agreement. If the latter agreement was not there, the Principal Agreement between the parties would have remained incomplete and the parties would have been at a disadvantage to know as to what goods were to be manufactured and what goods could not have been G manufactured. The Principal Agreement referred either specifically or by necessary implication to all other agreements. They were inter-dependent for their performance and one could not be read and understood completely without the aid of the other. H

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140Copy pinpoint140. Having held that all these other agreements as well as the mother/ principal agreement were part of a composite transaction to facilitate implementation of the principal agreement and that was in reality the intention of the parties, now, we will deal with the question of parties to the principal 8 agreement. When the mother agreement dated 16th November, 1995 was executed between the parties, presumably the Certificate of Incorporation of Capital Control India Private Ltd. had not been issued to the parties though it had been incorporated on 14th November, 1995. If the company had been duly incorporated and the Certificate of Incorporation was available to the parties, then there could be no reason for the parties to propose in the Principal Agreement that the joint venture company would be in the name of Capital Controls India Private Ltd. or any other name which would be mutually agreed between the parties. The reference to joint venture company, thus, was not by a specific name. Both the parties have signed this agreement with the clear intention that the company, Capital Control India Pvt. Ltd., will be the joint venture company. Thus, non-mentioning of the name of the joint venture company in the principal agreement, though it had been incorporated on 14th November, 1995, is immaterial and inconsequential in face of intention of the parties appearing from the written documents on record. Once the Principal Agreement was signed, all other agreements had to be executed by or in favour of the joint venture company. That is how to all these other agreements the joint venture company i.e. Capital Control India Pvt. Ltd. is a party. It further completely supports the view that non-mentioning of the name of Capital Control India Pvt. Ltd. can hardly affect the findings of the Court. With regard to the management of the joint venture company and implementation of the Principal Agreement, the parties had entered into the Managing Director Agreement dated 16th November, 1995. This agreement was signed by each of the concerned partners i.e. by Capital Control India Pvt. Ltd., respondent No. 5 and the Kocha Group, respondent No. 9. This agreement provided as to how the Managing Directors were to be appointed or

CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT 505 WATER PURIFICATION INC. [SWATANTER KUMAR, J.]

reappointed and how the meeting of the Board of Directors of the company were to be conducted in accordance with law and the terms of the Mother Agreement. This agreement came to be signed between the joint venture company and the Kocha Group.

141Copy pinpoint141. Other aspect of performance of the Principal B Agreement was the Financial and Technical Know-How License Agreement. This agreement had been signed between the Capital Control Company Inc., subsequently known as Severn Trent Water Purification, respondent No. 1, one the one hand and the joint venture company, respondent No. 5. Severn C Trent Water Purification Inc. is the holding company of the joint venture to the extent of its share holding and is the company into which Capital Control (Del.) Co. Inc. had merged. Severn Trent Water Purification Inc. is thus, the resultant product of Capital Control {Del.) Company Inc. being merged into Capital D Control Company Inc. and its name was changed with effect from 1st April, 2002. All these three companies had at the relevant time been or when came into existence were and are subsidiaries of Severn Trent {Del.) Inc. The requisite technical know-how was possessed by these companies and was E agreed to be imparted in favour of the joint venture company, in furtherance to and as per the terms and conditions contained in the Principal Agreement.

142Copy pinpoint142. Similarly, Severn Trent Water Purification Inc. had entered into an International Distributor Agreement and an F Export Sales Agreement with the joint venture to facilitate the sale, marketing and export of goods, under these two different agreements. Thus, it is crystal clear that all the six material agreements had been signed by some parties or their holding companies or the companies into which the signatory company G had merged. None of these companies is either stranger to the transaction or not an appropriate party. The parties who have signed the agreements could alone give rights or benefits to the joint venture company and they, in turn, were the companies descendants in interest or the subsidiaries of Severn Trent H •

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A Services Del. Inc.

143Copy pinpoint143. May be all the parties to the lis are not signatory to all the agreements in question, but still they would be covered under the expression 'claiming through or under' the parties to the agr:eement. The interests of these companies are not B adverse to the interest of the principal company and/or the joint venture company. On the contrary, they derive their basic interest and enforceability from the Mother Agreement and performance of all the other agreements by respective parties had to fall in line with the contents of the Principal Agreement. C In view of the settled position of law that we have indic~ted above, we will have no hesitation in holding that these companies claim their interest and invoke the terms of the agreement or defend the action in the capacity of a 'party claiming through or under' the parties to the agreement. D ARBITRATION

144Copy pinpoint144. When we refer to all the six relevant agreements in relation to the arbitration clause, the Shareholders Agreement, the Financial and Technical Know-How License Agreement and the Export Sales Agreement contained the arbitration clause while the other three agreements, i.e., International Distributor Agreement, the Managing Director's Agreement and the Trademark Registered User License Agreement did not contain any such arbitration clause. The arbitration clause contained in the Principal Agreement in clause 30 has been reproduced above. It requires that any dispute or difference arising under or in connection with that agreement which could not be settled by friendly negotiation and agreement between the parties, would be finally settled by arbitration conducted in accordance with the Rules of ICC. This clause is widely worded. It is comprehensive enough to include the disputes arising 'under and in connection with' the agreement. The word 'connection' has been added by the parties to expand the scope of the disputes under the agreements. The intention to make it more comprehensive is writ large from the language of the agreement and particularly clause 30 of the Mother Agreement. It is useful

CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT 507 WATER PURIFICATION INC. [SWATANTER KUMAR, J.] to notice that the agreement has to be construed and interpreted in accordance with laws of the Union of India, as consented by the parties.

145Copy pinpoint145. The expression 'connection' means a link or relationship between people or things or the people with whom one has contact {Concise Oxford Dictionary {Indian Edition). B 'Connection' means act of uniting; state of being united; a relative; relation between things one of which is bound up with {Law Lexicon 2nd Edn. 1997).

146Copy pinpoint146. Thus, even the dictionary meaning of this expression is liberally worded. It implies expansion in its operation and effect both. Connection can be direct or remote but it should not be fanciful or marginal. In other words, there should be relevant connection between the dispute and the agreement by specific words or by necessary implication like reference to all other agreements in one (principal) agreement. The expression appearing in clause 30 has to be given a meaningful interpretation particularly when the Principal Agreement itself, by specific words or by necessary implication, refers to all other agreements. This would imply that the other agreements originate from the Principal Agreement and hence, its terms and conditions would be applicable to those agreements. There are three agreements, as already noticed, which do not contain any specific arbitration clause. Both the Managing Director Agreement and the International Distributor Agreement directly relate to the Principal Agreement stating the manner in which the affairs would be managed and the Managing Directors be appointed. At the same time, the International Distributor Agreement is executed between the Severn Trent Water Purification Inc. the erstwhile Capital Control Company Inc. and the Capital Control India Private Ltd., the joint venture company. G Firstly, the chances of dispute between the same group of companies were remote and secondly these were the companies which were held by the same management. The parties had also agreed to have relationship as that of seller and distributor to make the joint venture company a success. H

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A The interest of Capital Controls Company Inc. and that of the Capital Control India Private Ltd., to the extent of the former's share, were common. Furthermore, this being an integral part of the Principal Agreement would, in our opinion, be squarely covered by the arbitration clause contained in the Mother/ B Shareholders Agreement. This agreement has been specifically referred in clause 7 of the Mother/Shareholders Agreement. Not only that there is incorporation by reference of International Distribution Agreement in the Mother/Shareholders Agreement but, in fact, it is an integral part thereof.

147Copy pinpoint147. Another aspect of the case is that all these agreements were executed simultaneously on 16th November, 1995 which fact fully supports the view that the parties intended to have all these agreements as a composite transaction. Furthermore, when the parties signed the Supplementary D Collaboration Agreement in August 1997, by that time all these agreements had not only been signed and 'l.mderstood by the parties but, in fact, had also been acted upon.

148Copy pinpoint148. In the Supplementary Collaboration Agreement, the parties re-confirmed the existence of the joint venture E agreement dated 16th November, 1995 and made a specific stipulation that both the parties confirmed to adhere by the terms and conditions stipulated by the Government of India in its letters dated 11th October, 1996, amended on 21st April, 1997. This was signed by Madhusudan 8. Kocha, member of the F Kocha group on behalf of the joint venture company and Capital Controls (Delaware) Inc. The necessity for executing this agreement was in face of the condition of Government approval as well as the subsequent amendment of clause 2, 3 and 4 of the approval letter dated 11th October, 1996 i.e. items of G manufacture, proposed location and foreign equity.

149Copy pinpoint149. The conduct of the parties and even the subsequent events leave no doubt in the mind of the Court that the parties had executed, intended and actually implemented the composite transaction contained in the Principal Agreement. H The Courts have also applied the Group of Companies Doctrine

CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT 509 WATER PURIFICATION INC. [SWATANTER KUMAR, J.]

in such cases. As already noticed, this Court in the case of A Olympus Superstructure Pvt. Ltd. (supra) permitted reference to arbitration where there were multiple contracts between the parties, interpreting the words 'in connection with' and 'disputes relating to connected matters'.

150Copy pinpoint150. Besides making the reference, the Court also held that making of two awards which may be conflicting in relation to the items which are likely to overlap in two agreements could not be permitted. The courts have also accepted and more so in group company cases that the fact that a party being non- signatory to one or other agreement may not be of much significance, the performance of one may be quite irrelevant with the performance and fulfillment of the principal or the mother agreement. That, in fact, is the situation in the present case.

151Copy pinpoint151. One of the arguments advanced was that the D International Distributor Agreement had specifically provided for construction, interpretation and performance of the agreement and for the transaction under that agreement to be governed by and interpreted by the laws of State of Pennysylvania, USA and parties thereto agreed that any litigation thereunder shall be brought in any federal or state court in the Eastern District E of the Commonwealth of Pennysylvania which fact would oust the possibility of reference to arbitration in terms of clause 30 of the Principal Agreement, as the parties had chosen a specific forum of the court system. Discussion on this argument may not be greatly relevant in view of the above discussion in this judgment. This being a composite transaction, the parties could opt for any remedy.

152Copy pinpoint152. In the present case, we have already noticed, that some agreements contain the arbitration clause, while others don't. The Shareholders Agreement, Financial and Technical Knowhow Licence Agreement and Export Sales Agreement contain the arbitration clause, while the International Distributor Agreement, Managing Directors Agreement and Trade Mark Registered User Agreement do not contain the arbitration clause. The arbitration clause contained under clause 30 of the H

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A Shareholders Agreement and that under clause 26 of the Financial and Technical Knowhow Licence Agreement are identical. They both require the disputes to be referred to arbitration in London as per the ICC Rules. However, the arbitration clause contained in clause 18 of the Export Sales B Agreement provides for reference of the disputes to arbitration at Pennsylvania, USA, in accordance with rules of American Arbitration Association. It also provides thatlhe judgment upon the Award rendered could be entered in any court of competent jurisdiction. Still, clause 21 of the International Distributor c Agreement required the construction, interpretation and performance of the agreement to be governed by and interpreted under the laws of the State of Pennsylvania, USA. Any litigation thereunder was to be brought in any federal or State Court located in the Eastern District of the D Commonwealth of Pennsylvania, which_ was to be binding upon the parties.

153Copy pinpoint153. As already noticed, two of the agreements did not contain any arbitration clause, but they also did not subject the parties even for litigative jurisdiction. They are the Managing E Directory; ,Agn3ement and the Trademark Registered User Agreement. These two agreements had been executed in furtherance to and for compliance of the terms and conditions of the mother agreement which contained the arbitration clause. They were, thus, intrinsically inter-connected with the mother agreement.

154Copy pinpoint154. All these agreements were signed on the same day and in furtherance to the mother agreement. None of the parties have invoked the jurisdiction of the Court at Pennsylvania, USA. Thus, it was an alternative remedy that too restricted to the disputes, if any arising from that agreement. Where different agreements between the parties provide for alternative remedies, it does not necessarily mean that the other remedy or jurisdiction stands ousted. Where the parties to such composite transaction provide for different alternative forums, including arbitration, it has to be taken that real intention of the

CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT 511 WATER PURIFICATION INC. [SWATANTER KUMAR, J.]

parties was to give effect to the purpose of agreement and refer the entire subject matter to arbitration and not to frustrate the remedy in law. It was for the parties to chose either to institute a suit qua the International Distributor Agreement at Pennsylvania or to invoke the arbitration agreement in terms of clause 30 of the mother agreement. They have chosen the latter remedy. The question, therefore, does not arise as to which law would apply since the only litigation taken out by the parties is the suit instituted by the appellant before the original side of the Bombay High Court and the subsequent application for reference to arbitration filed by the Respondent No. 1 under c Section 45 of the 1996 Act.

155Copy pinpoint155. The effect of execution of multiple agreements has been discussed by us in some elaboration above. The real intention of the parties was not only to refer all their disputes arising under the agreement which could not be settled despite friendly negotiations to arbitration, but even the disputes which arose in connection with the shareholder/mother agreement to arbitration.

156Copy pinpoint156. Thus, a composite reference was well within the comprehension of the parties to various agreements which were executed on the same day and for the same purpose. There cannot be any doubt to the contention that in terms of Section 9 of the CPC, the courts in India shall have jurisdiction to try all suits of civil nature. Further, this section gives a right to a person to institute a suit before the court of competent jurisdiction. F However, the language of Section 9 itself makes it clear that the civil courts have jurisdiction to try all suits of civil nature except the suits of which taking cognizance is either expressly or impliedly barred. In other words, the jurisdiction of the court and the right to a party emerging from Section 9 of the CPC is G not an absolute right, but contains inbuilt restrictions. It is an accepted principle that jurisdiction of the court can be excluded. In the case of Dhwabhai v. State of M.P. and Anr. [AIR 1969 SC 78), this Court. has settled the principle that jurisdiction of the Civil Court is all embracing, except to the extent it is H

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A excluded by law or by clear intendment arising from such law. In Nahar Industrial Enterprises Ltd. v. Hong Kong & Shanghai Banking Corporation [(2009) 8 SCC 646], this Court has even stated the conditions for exclusion of jurisdiction. They are, (a) whether the legislative intent to exclude is expressed explicitly or by necessary implication, and (b) whether the statute in question provides for an adequate and satisfactory alternative remedy to a party aggrieved by an order made under it.

157Copy pinpoint157. The provisions of Section 45 of the 1996 Act are to prevail over the provisions of the CPC and when the Court is satisfied that an agreement is enforceable, operative and is not null and void, it is obligatory upon the court to make a reference to arbitration and pass appropriate orders in relation to the legal proceedings before the court, in exercise of its. inherent powers.

158Copy pinpoint158. In the present case, the court can safely gather definite intention on behalf of the parties to have their disputes collectively resolved by the process of arbitration. Even if different forums are provided, recourse to one of them which is capable of resolving all their issues should be preferred over E a refusal of ~eference to arbitration. There appears to be no uncertainty in the minds of the parties in that regard, rather the intention of the parties is fortified and clearly referable to the mother agreement.

159Copy pinpoint159. It is not the case of any of the parties before us that F any of the parties to the present litigation had taken steps before that Court or had invoked the jurisdiction of that court under that system. There is no apparent conflict of interest as of now. The arbitration clause would stand incorporated into the International Distributor Agreement as this agreement itself was Appendix G II to the Principal Agreement. This Court in the case of M.R. Engineers and Contractors Pvt. Ltd. v. Som Datt BuUders Ltd. [(2009) 7 sec 696] has stated that firstly the subject of reference be enacted by mutual intention, secondly a mere reference to a document may not be sufficient and the reference should be sufficient to bring out the terms and conditions of the

CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT 513 WATER PURlrlCATION INC. [SWATANTER KUMAR, J.) referred document and also that the arbitration clause should be capable of application in respect of a dispute under the contract and not repugnant to any term thereof. All these three conditions are satisfied in the present case.

160Copy pinpoint160. The terms and conditions of the International Distribution Agreement were an integral part of the Principal B Agreement as Appendix II and the Principal Agreement had an arbitration clause which was wide enough to cover disputes in all the ancillary agreements. It is not necessary for us to examine the choice of forum or legal enforceability of legal system in the present case, as we find no repugnancy even C where the main contract is governed by law of some other country and the arbitration clause by Indian law. They both could be invoked, neither party having invoked the former will be no bar for invocation of the latter in view of arbitration clause 30 of the mother agreement. o

161Copy pinpoint161. Reliance was also placed on the judgment of this Court in the case of Deutsche Post Bank Home Finance Ltd. v. Taduri Sridhar [AIR 2011 SC 1899] where the Court had declined reference of multiple and multi party agreement. That case is of no help to the appellant before us. In that case, there were four parties, the seller of the land, the builder, purchaser of the flat and the bank. The bank had signed an agreement with the purchaser of the flat to finance the flat, but it referred to other agreement stating that it would provide funds directly to the builder. There was an agreement between the builder and the owner of the land and the purchaser of the land to sell the undivided share and that contained an arbitration clause. The question before the Court was whether while referring the disputes to the arbitration, the disputes between the bank on the one hand, and the purchaser of the flat on the other could be referred to arbitration. The Court, in reference to Section 8 of the 1996 Act, held that the bank was a non-party to the arbitration agreement, therefore, neither the reference was permissible nor they could be impleaded at a subsequent stage. This judgment on facts has no application. The distinction H

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A between Section 8 and Section 45 has elaborately been dealt with by us above and in view of that, we have no hesitation in holding that this judgment, on facts and law, is not applicable to the present case.

162Copy pinpoint162. Thus, in view of the above, we hold that the disputes referred to and arising from the multi-party agreements are capable of being referred to arbitral tribunal in accordance with the agreement between the parties.

163Copy pinpoint163. Another argument advanced with some vehemence on behalf of the appellant was that respondent Nos.3 and 4 were not party to any of the agreements entered into between the parties and their cause of action is totally different and distinct, and their rights were controlled by the agreement of distribution executed by respondent Nos.1 and 2 in their favour for distribution of products of gas and electro-chlorination. It was 0 contended that there cannot be splitting of parties, splitting of cause of action and remedy by the Court.

164Copy pinpoint164. On the other hand, it was contended on behalf of the respondent No.1 that it is permissible to split cause of action, parties and disputes. The mater referable to arbitration could be segregated from the civil action. The court could pass appropriate orders referring the disputes covered under the arbitration agreement between the signatory party to arbitration and proceed with the claim of respondent Nos. 3 and 4 in accordance with law.

165Copy pinpoint165. As far as this question of law is concerned, we have already answered the same. On facts, there is no occasion for us to deliberate on this issue, because respondent Nos. 3 and 4 had already consented for arbitration. In light of that fact, we do not wish to decide this question on the facts of the present case.

166Copy pinpoint166. Having dealt with all the relevant issues in law, now we would provide answer to the questions framed by us in the beginning of the judgment as follows : H

CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT 515 WATER PURIFICATION INC. Answer A

167Copy pinpoint167. Section 45 is a provision falling under Chapter I of Part II of the 1996 Act which is a self-contained Code. The expression 'person claiming through or unde~ would mean and take within its ambit multiple and multi-party agreements, though in exceptional case. Even non-signatory parties to some of the B agreements can pray and be referred to arbitration provided they satisfy the pre-requisites under Sections 44 and 45 read with Schedule I. Reference of non-signatory parties is neither unknown to arbitration jurisprudence nor is it impermissible.

168Copy pinpoint168. In the facts of a given case, the Court is always c vested with the power to delete the name of the parties who are neither necessary nor proper to the proceedings before the Court. In the cases of group companies or where various agreements constitute a composite transaction like mother agreement and all other agreements being ancillary to and for 0 effective and complete implementation of the Mother Agreement, the court may have to make reference to arbitration even of the disputes existing between signatory or even non- signatory parties. However, the discretion of the Court has to be exercised in exceptional, limiting, befitting and cases of necessity and very cautiously.

169Copy pinpoint169. Having answered these questions, we do not see any reason to interfere with the judgment of the Division Bench of the Bombay High Court under appeal. We direct all the disputes arise in the suit and from the agreement between the parties to be referred to arbitral tribunal and be decided in accordance with the Rules of ICC.

170Copy pinpoint170. The appeals are dismissed. However, in the facts and circumstances of the present case, we do not award costs. G ORDER

1. Upon pronouncement of the judgment Mr. F.S. Nariman, learned senior counsel appearing for the petitioner, mentioned H

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A that the petitioner had filed an application for injunction in the suit before the High Court. The same was dismissed. Appeal against the order dismissing the application had been filed before this Court and was ordered to be listed along with SLP (C) No. 8950 of 2010 (which is an appeal against the order of B the High Court making reference to arbitral tribunal). However, the Court had not heard arguments on that appeal.

2. Learned senior counsel appearing fcir the respondents, Mr. K.V. Vishwanathan, submitted that the special leave petitions were listed but they were not admitted. c 3. In view of the common stand taken by the counsel for the parties, we permit the petitioner to move an independent application praying for hearing for those special leave petitions i.e. SLP(C)Nos.26514-26515 of 2011 (listed along with SLP(C)No. 8950/2010) pending for admission. 0 K.K.T. Appeals dismissed.