In Brief
A family sought to enforce an arbitration clause in a 1996 Memorandum of Understanding regarding inter-family shareholding rights in a company. The respondents argued the MoU was superseded by a 1996 Shareholders' Agreement with Reuters. The High Court held the arbitration clause was no longer enforceable. The Supreme Court reversed, holding that whether one contract has novated another is a complex factual and legal question for the arbitral tribunal, not the court. At the referral stage under Section 11(6A) of the Arbitration Act, courts must conduct only a prima facie review and refer matters to arbitration unless an arbitration agreement is manifestly non-existent or invalid. The Court remitted the dispute to a retired Supreme Court judge for arbitration.
The lawyer headnote and full judgment text are available to registered users.