M/S. DHANRAJAMAL GOBINDRAM vs M/S. SHAMJI KALIDAS AND CO.

The Supreme Court upheld the validity of an arbitration agreement under Section 20 of the Indian Arbitration Act, 1940, in a dispute over a contract for the purchase of African cotton. The Court rejected the buyers' arguments that the contract was void due to alleged vagueness and illegality under the Foreign Exchange Regulation Act, 1947, specifically Section 5. The Court clarified that the provisions of the Foreign Exchange Regulation Act did not render the contract illegal, and thus the arbitration clause was enforceable, allowing the sellers to invoke arbitration for their claims.