An amendment preserving unchanged terms carries forward the original agreement’s arbitration clause.

The parties entered into a Memorandum of Understanding (MoU) concerning the purchase and development of land at Padappai.

Following an amendment, the applicant claimed that the respondent was obliged to convey further land, including 39 acres discussed during insolvency proceedings before the NCLT, Chennai. The applicant alleged that the respondent had refused to execute the sale deed and sought an injunction restraining dealings with the scheduled properties pending arbitration.

The respondent disputed the enforceability of the agreements and the existence of an arbitration agreement, and opposed interim relief on other grounds.

The Court considered whether the arbitration clause continued to apply under the amended agreement and whether an injunction was warranted.

Whether the arbitration clause in the original MoU continued to bind the parties after the amendment agreement.

Whether an interim injunction restraining dealings with the scheduled properties should be granted pending arbitral proceedings.

The Court applied the terms of the parties’ agreements, particularly the amendment’s provisions that it would be read as part of the original MoU and that the original terms would remain unchanged except for specified matters; accordingly, the original arbitration clause remained operative.

The Court also applied the interim-protection principle that relief may be warranted to preserve the applicant’s ability to enforce a future arbitral award where third-party interests might otherwise arise.

No statute or judicial precedent was expressly relied upon in the Court’s reasoning.

The amendment changed the land extent and related commercial terms but stated that the other MoU conditions remained in force. The Court therefore rejected the respondent’s objection that no arbitration agreement existed.

It also took account of the NCLT’s record of concluded commercial discussions concerning the sale of 39 acres and the subsequent withdrawal of the insolvency proceedings.

In the Court’s view, without an injunction, third-party rights could arise and impair the applicant’s ability to enforce any arbitral award; interim protection was therefore justified.

The applicant was directed to initiate arbitration within eight weeks of receiving the order; failing that, the injunction would stand vacated. There was no order as to costs.