Supreme Court: While interpreting the Section 16 of the Arbitration and Conciliation Act, 1996(Act) as to whether an arbitration clause which forms part of a contract is to be treated as an agreement independent of the other terms of the contract or not, a single bench of S.S Nijjar, J. held that under Section 16 of the Act, the legislature makes it clear that while considering any objection with regard to the existence or validity of the arbitration agreement, the arbitration clause, which forms part of the contract, has to be treated as an agreement independent of the other terms of the contract and the parties can not be permitted to avoid arbitration, without satisfying the Court that it will be just and in the interest of all the parties not to proceed with the arbitration .
In the present case, the defendant had defaulted in making payments to the petitioner for it’s services provided in the Commonwealth Games, 2010 organized in Delhi. The Court rejected the contention of the defendants that the Court had no jurisdiction to make reference to arbitration in the present case as criminal proceedings were instituted against its Chairman and some officials of the petitioner and further ruled that void/voidable contracts can be referred to arbitration and also emphasized that it was their function to support arbitration process. Swiss Timing Limited v. Organising Committee Commonwealth Games 2010, Delhi, Arbitration Petition No. 34 of 2013, decided on May 28, 2014
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