JUDGEMENT A.S. NAIDU, J. The order dated December 18, 2007 passed by the District Judge, Cuttack in Arbitration Petition No. 207 of 2007 is assailed in this appeal filed under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'). The appellant was the petitioner before the court below and it had filed a petition under Section 9 of the Act seeking an order of injunction restraining the respondent, which was opposite party before the court below, from interfering with or disturbing in the right of the appellant in carrying on its business, in terms of an agreement dated December 14, 2001 entered into between the parties, until adjudication of the dispute by an arbitral tribunal. Bereft of unnecessary details, the short facts necessary for appreciating the respective cases of the parties are as follows : The appellant, a private limited company, commonly known as M/s. Mitra S.K. Pvt. Ltd. (hereinafter referred to as "MSK"), was incorporated in the year 1956 and it carries on business of inspection, analysis, qualitative and quantitative survey of minerals, ores, coal and coke. On the other hand, the respondent is a company incorporated in the year 1993 for the purpose of carrying on business of highly specialized sophisticated technology and quality inspection of export commodities including imported raw materials and components used in the manufacture of such exportable commodities under the name and style as "Inspectorate Griffith (India) Private Limited". Similarly, Inspectorate International Limited is another company incorporated under the English Companies Act for the purpose of carrying on business in similar specialized field. A shareholders' agreement was entered into between the appellant, Inspectorate International Limited and one Visa Agro Industries Private Limited on August 24, 1993 to carry on business of inspection, analysis, qualitative and quantitative survey of minerals, ores, coal and coke and imported raw materials and components used in manufacture of exportable commodities. As per the said agreement, Inspectorate International Limited had 35% share, appellant had 10% share and Visa Agro Industries Private Limited had the balance 55% share. In the year 1996 (10.03.1996) Visa Agro Industries Private Limited transferred its share in favour of the appellant. Thus, the appellant became 65% shareholder. In March 1999, it is alleged, the appellant transferred 25% of its share in favour of Inspectorate International Limited. In the year 1996 (10.03.1996) Visa Agro Industries Private Limited transferred its share in favour of the appellant. Thus, the appellant became 65% shareholder. In March 1999, it is alleged, the appellant transferred 25% of its share in favour of Inspectorate International Limited. Consequently, the appellant held 40% share in the company and the rest 60% share was held by an English company. Out of seven directors of the company, three were nominees of the appellant and the rest four were the nominees of Inspectorate International Limited. The appellant averred that on December 14, 2001 the appellant and the respondent entered into a sub-contract in consonance with the provisions of the shareholders' agreement dated August 24, 1993 and it was agreed upon that the appellant would work as a sub-contractor to provide inspection service on behalf of the respondent company. It is stated that the appellant, as per the terms of the said agreement, had been providing inspection service at Paradip Port on behalf of the respondent company and receiving remuneration at rates agreed to by the parties. While matter stood thus, certain dissension cropped up between the parties. Consequently, the respondent - company, it is stated, moved the Principal Bench of Company Law Board, New Delhi, making certain allegations with regard to hindrances committed by the appellant in smooth management of the company and obtained an ex parte order restraining the appellant from participating in any tender in which the respondent would be participating. The said dispute is sub judice though it appears that the restraint order has been modified in the meanwhile. At this juncture, the respondent informed the appellant that the company desired to operate independently at Paradip for providing inspection service to its customers by dispensing with the service of the appellant. The said intimation/action once again sprang a dispute among the parties. As there was resistance for referring the dispute to an arbitral tribunal, the appellant filed a petition under Section 9 of the Act before the court below praying for interim injunction. According to the appellant, the shareholders' agreement which culminated in formation of the respondent company stipulated that all the decisions of the company would be taken unanimously. But then the decision of the respondent - company to perform inspection service only by itself was a unilateral decision and not unanimous. According to the appellant, the shareholders' agreement which culminated in formation of the respondent company stipulated that all the decisions of the company would be taken unanimously. But then the decision of the respondent - company to perform inspection service only by itself was a unilateral decision and not unanimous. The said decision was taken without the consent or approval of the directors nominated by the appellant and, as such, the same being illegal could not be enforced. It is further averred that as to whether such a decision could be taken unilaterally, as well as some other disputes which cropped up in the meanwhile between the parties inter se, are required to be resolved by arbitration in terms of the shareholders' agreement and the sub-contract agreement. According to the appellant, it had proposed the names of Mr. Justice Subas Chandra Sen, a former judge of the Supreme Court of India, to function as the arbitrator, but then the respondent did not agree to refer the dispute to arbitration and tried to avoid the sub-contract agreement. By the aforesaid illegal act the appellant is subjected to great prejudice, harassment and loss. Hence, the appellant prayed to restrain the respondent from implementing the decision taken by it unilaterally to perform the work at Paradip by itself. The respondent resisted the application of the appellant filed before the court below by filing its objection. Apart from denying some of the factual averments, it was specifically averred that the sub-contract agreement dated December 14, 2001 had not been entered into in accordance with the provisions of the shareholders' agreement dated 24.08.1993. The earlier agreement was separate and distinct and the respondent was not a party thereto. Thus, the respondent was not bound by the terms of the said agreement. Further, there was no dispute between the parties which required arbitration as per the terms of the sub-contract agreement and, therefore, the petition filed under Section 9 of the Act was not maintainable. According to the respondent, as the appellant tried to compete with it in the business of inspection service and submitted its tenders quoting prices for the purpose of procuring the contracts thereby causing huge loss to it, it had no other alternative but to issue termination letter on 30th July, 2007. Issuance of that letter was neither illegal, bad or contrary to the terms of the agreement dated December 14, 2001. Issuance of that letter was neither illegal, bad or contrary to the terms of the agreement dated December 14, 2001. Further, the sub-contract agreement was terminable by its very nature even without consent of the appellant or its nominee directors as the said agreement contained provisions for termination of the same by giving three months' notice to the appellant and as the agreement itself was terminable, its specific performance could not be enforced. After hearing the learned counsel for the parties and perusing the agreements and other materials, by the impugned order the court below came to the conclusion that, as the respondent was not a party to the shareholders' agreement, it was not bound by the terms thereof and that the three basic ingredients for seeking an order of injunction had not been satisfied and rejected the petition. Being aggrieved, the present appeal was filed. Mr. Parija, learned counsel appearing for the appellant, reiterated the stand taken by the appellant before the court below and forcefully submitted that a unilateral decision taken by the respondent was a nullity in the eye of law and was contrary to the terms of the shareholders' agreement, which mandatorily required that any decision taken by the company should be unanimous. He further submitted that if the appellant is prevented from running its inspection service and on the other hand the respondent carries on the same that would cause irreparable loss and injury to the appellant and, as such, it was a fit case, where the court below ought to have granted interim protection to the appellant pending adjudication of the dispute by an arbitral tribunal. In support of the aforesaid submission, Mr. Parija took this court through different agreements annexed to the Memorandum of Appeal, which had been filed before the court below, and tried to convince this court that in consonance with Clause 9 of the shareholders' agreement (Annexure 2) it was agreed that the shareholders would exercise voting rights and other powers of control as available to them in relation to the company, and no decision could be taken relating to the matters more fully described in the agreement without unanimous approval of the shareholders. It is submitted that in consonance with the said agreement, a unilateral decision taken by the respondent was unjustified and illegal, and that it is a fit case where the appellant may be protected. Mr. It is submitted that in consonance with the said agreement, a unilateral decision taken by the respondent was unjustified and illegal, and that it is a fit case where the appellant may be protected. Mr. Parija further submitted that while there is apparent violation of the terms of the shareholders' agreement, if the respondent prevents the appellant from rendering its inspection service, the appellant would be put to irreparable financial loss and it is a fit case where this court may interfere in the matter specially in view of the fact that the respondent is adopting dilly-dally tactics in referring the dispute to arbitration. Learned counsel for the respondent, on the other hand, submitted that as the dispute is pending before the Company Law Board, reference of the same to arbitration was not called for. According to him, the respondent being not a party to the shareholders' agreement is not bound by the terms thereof. Referring to Clause 3.3 of the sub-contract agreement dated December 14, 2001 he further submitted that the said agreement itself could be cancelled or withdrawn with prior notice and, as such, the petition filed by the appellant before the court below seeking injunction was not maintainable. Referring to different clauses of the said agreement Mr. Mitra submitted that the respondent had reserved its right to appoint any sub-contractor in India for carrying on its business of inspection service on its behalf and that the relationship among the appellant and the respondent was strictly on arm's length basis. Relying on Clauses 9.3 and 9.4 he submitted that if there was breach of any terms and conditions of the agreement, it was open to the aggrieved party to ask for damages and penalty from the other and, as such, it was not a fit case where the appellant would have sought interim injunction under Section 9 of the Act. In short, according to Mr. Mitra, the basic ingredients for grant of interim injunction have not been made out and the court below rightly rejected such prayer and, therefore, the findings of fact as well as the order of the court below may not be interfered with. This court heard learned counsel for the parties patiently, perused the pleadings and documents of the parties meticulously and considered the submissions diligently. This court heard learned counsel for the parties patiently, perused the pleadings and documents of the parties meticulously and considered the submissions diligently. So far as reference of the dispute to arbitration is concerned, after hearing the learned counsel for the parties this court is satisfied that the dispute in fact exists among the parties arising out of the sub-contract agreement executed among them. Thus, the submission that the dispute was not arbitrable due to pendency of a proceeding before the Company Law Board at New Delhi cannot be accepted. That apart, the court below has come to the clear finding that the dispute is arbitrable. The respondent having not assailed the said finding, cannot take a stand before this court that the dispute cannot be referred to arbitration. Though initially an objection was raised with regard to maintainability of the petition filed under Section 9 of the Act before the District Judge on the ground of lack of territorial jurisdiction, in course of hearing the same was given up as the place of work is at Paradip. The other question that needs consideration of this court is as to whether the action taken by the respondent unilaterally terminating the sub-contract agreement with the appellant so far as the business at Paradip was concerned was justified and legal. According to Mr. Parija, in view of the shareholders' agreement, the said action of the respondent being unjust and illegal needs to be set aside. Countenancing such submission of Mr. Parija, Mr. Mitra submitted that the respondent being not a party to the shareholders' agreement, the terms and conditions embodied in that agreement are not binding on the respondent. Considering the rival contentions of the learned counsel for the parties, this court feels that the sole dispute is as to whether cancellation of the sub-contract agreement by the respondent was justified or not, and if such step was taken by the respondent in consonance with the terms embodied in the sub-contract agreement among the parties inter se as well as the shareholders' agreement. Such a dispute has to be adjudicated by arbitration in consonance with the terms of the agreement. This court, therefore, feels it not prudent to delve into the said question at this stage lest it may prejudice either party. Such a dispute has to be adjudicated by arbitration in consonance with the terms of the agreement. This court, therefore, feels it not prudent to delve into the said question at this stage lest it may prejudice either party. The only other question that needs consideration of this court is as to whether it is a fit case where interim injunction can be granted in consonance with Section 9 of the Act. The principles governing grant of ad interim injunction in an arbitration matter are the same as in any other civil matter. A plaintiff in a civil matter is required to prove its prima facie case, to prove that balance of convenience leans in its favour and that without an order of interim injunction it is likely to suffer irreparable injury [Dorstener Maschinenfabrik AG vs. Sand Plast India Limited, 1995 (1) Arb. LR 282 (Del.)]. Prima facie case does not always mean that in all probabilities a party seeking injunction would succeed. It would be sufficient if it can establish that it has a fair question to raise as to existence of rights it claims and that it is necessary in the interest of justice to preserve the said rights until the dispute is resolved. Balance of convenience, on the other hand, is an essential ingredient, and it is required to be considered as to whether the party seeking injunction would suffer irreparable damage if no injunction is granted. So far as irreparable injury is concerned, the court must be satisfied that unless the interest of the party seeking injunction is protected, its legal rights would be at stake and the loss that may be sustained by it cannot be remedied at a later stage. Law is well settled that if a court is satisfied that there is a prima facie case but then arrives at the conclusion that the party seeking interim injunction has failed to satisfy the court that balance of convenience leans in its favour as also irreparable loss likely to be caused to it, interim injunction cannot be granted [Achyutananda Misra and others vs. Pramila Misra and others 1992 (11) OLR 633]. Considering the present case in the touchstone of the aforesaid principle of law, it appears that admittedly by letter dated 30th July, 2007 the respondent invoked Clause 3.3 of the agreement of December 14, 2001 and intimated that the services of the appellant as sub-contractor were not required at Paradip Port. The said agreement of December 14, 2001 in its Clause 3.3 stipulates as follows : "In any event of cancellation or withdrawal of any sub-contract, Inspectorate will give at least seven (7) clear days' notice to MSK and for the cancellation or withdrawal of continuous inspection service contract which requires MSK to set up infrastructure Inspectorate will give notice to MSK three (3) clear calendar months prior to such cancellation or withdrawal." Thus, the agreement basing upon which the appellant seeks order of restraint provides cancellation of sub-contract. The consequence of such cancellation is also stipulated in the aforesaid agreement in its Clause 9.4 to the effect that if there would be any breach of conditions, the aggrieved party will be entitled to get damages and penalty from the other party to that agreement, as may be determined by arbitration. According to Mr. Parija, the cancellation of sub-contract was illegal, unjust and contrary to the provisions of the shareholders' agreement as no decision for such cancellation could be taken unilaterally, the agreement having stipulated that all decisions to be taken should be unanimous. This submission is strongly repudiated by Mr. Mitra mainly on the ground that the respondent not being a party to the shareholders' agreement the terms of the said agreement were not binding on it. Such a dispute as has been agreed by the parties to the agreement has to be adjudicated by arbitration. In view of the fact that any loss or damage caused to the appellant due to cancellation of the sub-contract agreement as per Clause 9.4 of the agreement of December 14, 2001 has to be adjudicated by arbitration, this court finds that balance of convenience leans in favour of the respondent, more so because the remedy has been stipulated in the agreement itself. According to the agreement any loss or damage suffered by the appellant can be determined on adjudication by an arbitrator. According to the agreement any loss or damage suffered by the appellant can be determined on adjudication by an arbitrator. After going through the impugned order this court finds that the court below rightly held that it was not a fit case where all the three essential ingredients had been satisfied so as to grant an interim injunction. This court, therefore, finds no reason to interfere with the impugned order and dismisses the miscellaneous appeal with an observation that the respondent shall take immediate steps for referring the dispute to arbitration, failing which it will be open to the appellant to work out its remedy in accordance with the provisions of the Arbitration and Conciliation Act, 1996. It is further directed that the respondent shall meticulously maintain the accounts with regard to the income derived from the work at Paradip Port and deposit the same in a separate account in bank until the dispute is decided in accordance with law.