BOEING COMPANY Vs. R M INVESTMENT AND TRADING

JUDGEMENT

(1.) Gone are the days when the Courts used to view arbitration with jealous suspicion as it took away the jurisdiction of the Courts of the land. Now that our Courts are so overloaded in their jurisdiction that anything which would affect some amount of load shedding is generally welcome. The tendency of the modern Courts towards arbitration agreements and awards is to uphold them wherever and whenever possible and to upset them only when the Courts cannot but. The modern approach of the Courts towards arbitration is, to use a Latin maxim, ut res magis valeat quam pereat, i.e., to allow them to flourish, as far as possible, and not to perish. As pointed but by the Supreme Court in V/O Tractoroexport (AIR 1971 SC 1 at page 12), a modern Court shall ordinarily refuse its assistance to a party who has entered into an agreement of which an arbitral clause forms an integral part and then seeks to resile from such contract except for cogent and compelling reasons. The change in approach is appreciably perceptible in later Legislations. While under the Arbitration Act of 1940, the Court is given a discretion to stay or not to stay a suit in view of an existing arbitration agreement between the parties covering the matters in dispute in the suit, under section 3 of the Foreign Awards (Recognition and Enforcement) Act of 1961, the Court is under a mandatory obligation to stay a suit in the event of a voluntary operative agreement between the parties.

(2.) There was an agreement, labelled as "Consultant Services Agreement" between the appellant Boeing Company (hereinafter referred to as Boeing) and the respondent R. M. Investment and Trading Company Private Limited (hereinafter referred to as RMI) whereunder RMI was to promote sales of the commercial Aircrafts of the Boeing to parties within the territory of India. The remuneration payable to RMI by Boeing for rendering its services was to consist of :

(3.) Admittedly, the fixed retainer was duly paid by Boeing to RML But it is the case of RMI that it was not paid any remuneration at the rate of 5% on the purchase price of two commercial aircrafts sold by Boeing to Air India through the negotiations of RMI. RMI has now filed a suit for-the recovery of the said amount of remuneration along with incidental reliefs against Boeing. There is also a claim for the said amount on a quantum meruit basis.