LexM/S YOUNG ACHIEVERS versus IMS LEARNING RESOURCES PVT. LTD.
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A 8 [2013] 2 S.C.R. 252 MIS YOUNG ACHIEVERS v. IMS LEARNING RESOURCES PVT. LTD. (Civil Appeal No. 6997 of 2013) AUGUST 22, 2013 [K.S. RADHAKRISHNAN AND A.K. SIKRI, JJ.] Arbitration - Contract containing arbitration clause, superseded by another contract not containing any arbitration C clause - Effect of, on arbitration clause contained in the earlier contract - Held: Arbitration clause contained in the earlier contract did not survive once such contract was superseded I novated by the later contract - Arbitration and Conciliation Act, 1996 - s.8, rlw s.5. D The respondent filed suit in the High Court for a permanent injunction restraining infringement of a registered trademark, infringement of copyright, passing off of damages, rendition of accounts of profits and also E for other consequential reliefs against the appellant. Appellant preferred IA under Section 8, read with Section 5 of the Arbitration and Conciliation Act, 1996 for rejecting the plaint and referring the dispute to arbitration and also for other consequential reliefs. Respondent-plaintiff F raised objection to the said application stating that the suit was perfectly maintainable. The High Court rejected the application holding that the earlier agreements dated 01.04.2007 and 01.04.2010 between the parties which contained arbitration clause G stood superseded by a new contract dated 01.02.2011 arrived at between the parties by mutual consent, and therefore the present appeal. Dismissing the appeal, the Court H 252 YOUNG ACHIEVERS v. IMS LEARNING RESOURCES 253 PVT. LTD. HELD: 1.1. Survival of the arbitration clause, as A sought by the appellant in the agreements dated 01.04.2007 and 01.04.2010 has to be seen in the light of the terms and conditions of the new agreement dated 01.02.2011. An arbitration clause in an agreement cannot survive if the agreement containing arbitration clause has B been superseded/novated by a later agreement. [Para 6] (257-D-E] 1.2. It is the common case of the parties that the subsequent agreement titled "Exit paper/agreement" C dated 01.02.2011 entered into between the parties does not contain any arbitration clause. The Exit paper would clearly indicate that it is a mutually agreed document containing comprehensive terms and conditions which admittedly does not contain an arbitration clause. The High Court is right in taking the view that the case on D hand, is not a case involving assertion by the respondent of according a satisfaction in respect of the earlier contracts dated 01.04.2007 and 01.04.2010. If that be so, it could have referred to arbitrator in terms of those two agreements going by the dictum in the case Kishorilal E Gupta. This Court in Kishorilal Gupta's case laid down the principle that if the contract is superseded by another, the arbitration clause, being a component part of the earlier contract, falls with it. But where the dispute is whether such contract is void ab intio, the arbitration clause F cannot operate on those disputes, for its operative force depends upon the existence of the contract and its validity. [Paras 7, 8] [258-A-B; 259-H; 260-A-D] 1.3. So far as the present case is concerned, parties G have entered into a fresh contract contained in the Exit paper which does not even indicate any disputes arising under the original contract or about the settlement thereof, it is nothing but a pure and simple novation of the original contract by mutual consent. Above being the H 254 SUPREME COURT REPORTS [2013] 8 S.C.R. A factual and legal position, no error is found in the view taken by the High Court. [Para 9] [260-F-H] Union of India v. Kishorilal Gupta and Bros. AIR 1959 SC 1362: 1960 SCR 493; Branch Manager, Is Magma Leasing 8 & Finance Limited and another v. Potluri Madhavilata and another (2009) 10 SCC 103; National Agricultural Cooperative Marketing Federation India Ltd. V. Gains Trading Ltd. (2007) 5 sec 692 - referred to. Nolde Bros., Inc. v. Bakery Workers 430 US 243 and C Heyman v. Darwins Limited 1942 (1) All. E.R 337 - referred to. D E Case Law Reference: (2009) 10 sec 103 referred to Para 3 c2001) s sec 692 referred to Para 3 430 us 243 referred to Para 4 1960 SCR 493 referred to Para 8 1942 (1) All. E.R 337 referred to Para 8 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6997 of 2013. F From the Judgment and Order dated 10.07.2012 of the High Court of Delhi at Ne
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