ORIENT POWER COMPANY (PRIVATE) LIMITED vs SUI NORTHERN GAS PIPELINES LIMITED Contract

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ORIENT POWER COMPANY (PRIVATE) LIMITED VS SUI NORTHERN GAS PIPELINES LIMITED Contract--- Inter-connected or inter-dependent contracts---Arbitration clause in one agreement deemed to be incorporated into another agreement---Scope---Gas Supply Agreement ('GSA') between a power generation facility and distributor of natural gas---Dispute over payment for gas---After determination by an expert ('expert determination') a separate "Payment Agreement" was executed between parties for payment of disputed amount---Plea of power generation facility that had the arbitration clause in the GSA did not cover the Payment Agreement, and thus the Sole Arbitrator exceeded his jurisdiction by deciding the issues arising out of the Payment Agreement---Held, that the arbitration clause in the GSA covered disputes, disagreements or default of the seller and buyer "in connection with or arising out of" the GSA---Dispute under the Payment Agreement was inarguably a dispute connected to the GSA, and also arose out of the obligations under the GSA---Controversy arising out of Payment Agreement was a progeny of the GSA and could not be divorced from the parent GSA---Arbitration clause contained in the GSA would therefore be the "centre of gravity" and would be deemed to be anchored in the Payment Agreement which itself was merely an implementation of the GSA---Disputes "arising out of" the GSA were thus wide enough to cover the Payment Agreement --- Neither was it commercially sensible nor realistic to hold that both the agreements were to be decided by separate forums--- Had this been the case, the parties, as rational businessmen, would have been prudent in expressly excluding the arbitration clause from the Payment Agreement---Appeal was dismissed.

ORIENT POWER COMPANY (PRIVATE) LIMITED vs SUI NORTHERN GAS PIPELINES LIMITED Contract — 2021 SCMR 1728 SUPREME-COURT

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