Young achievers v. IMS Learning Resources private Ltd
The respondent IMS learning resources filed a CS in the delhi high court for the “permanent injunction, restraining infringement of a registered trademark, infringement of copyrights, passing of damage, rendition of accounts of profits and also for other consequential reliefs against the appellant. The appellant found “IA No. 18 of 2012 under section 8, read along with section 5 of the arbitration and conciliation act, 1996, fit for the rejection of maintainability of the plea raised by the respondent. Over this the respondent objected and argued that the plea is perfectly maintainable. The application was rejected by high court on 16.04.2012 stating that the previous agreements of the arbitration clause are superseded by the new contract on 02.02.2011, which was mutually consented by the parties.
The counsel Mr. Manu T. Ramachandran, taking case for the appellant, raised a few questions relating to law:-
? “Whether an arbitration clause is a collateral term in the contract, which relates to resolution of disputes, and not performance of the contract comes to an end on account of repudiation, frustration of breach of contract, the arbitration agreement would survive for the purpose of resolution of the disputes arising under or in connection with the contract?”
? "Whether the impugned judgment is contrary to the law settled by this Hon’ble Court of branch – Manager, M/s Magma Leasing and Finance Limited and Another V. Potluri Madhavilata and another (2009) 10 SCC 103 and National Agricultural Cooperative Marketing Federation India Ltd v. gains trading ltd (2007) 5 SCC 692?"
? "Whether the Hon’ble high court is correct in holding that the law settled by this Hon’ble court in the Branch Manager, M/s Magma Leasing and Finance Limited and Another V. Potluri Madhavilata and Another (2009) 20 SCC 103 and National Agricultural Cooperative Marketing Federation India Ltd. V. Gains Trading Ltd. (2007) 5 SCC 692 is applicable in case of unilateral termination of agreement by one of the parties and not in mutual termination of accord and satisfaction of the earlier contract?"
The principle laid down in the case is that “if a contract is superseded by another of which an arbitration clause is a part, the earlier one will fall with it”, but if the question is of the dispute that “whether the contract is void ab initio and the arbitration clause cannot work on such disputes for this operative purpose the question comes to the existence of contract and its validity”
Many observations were made by the court in settlement of disputes arising under original contract including the disputes as to the breach of contract and its consequences.”
Above being the factual and legal position the high court is correct with its decision and therefore no error could be found in it but still the appeal lacks merit and stands dismissed.