DAMODAR VALLEY CORPORATION vs K. K. KAR

The Supreme Court ruled that an arbitration clause in a contract remains valid even after one party repudiates the contract and claims a full and final settlement. The Court held that disputes regarding the existence of a settlement or the performance of the contract are still 'in relation to' the contract and thus can be referred to arbitration under the Arbitration Act, 1940. The High Court's dismissal of the appellant's petition was found to be erroneous, as the arbitration clause survives despite unilateral repudiation.