The theory of separability for arbitration agreements has been
developed over time. It has been well recognized in India and other
jurisdictions that an arbitration clause in a contract is an
agreement independent of the contract executed between the parties.
This theory of separability of an arbitration agreement has well
elucidated by the Supreme Court of India in the case of M/S Sms
Tea Estates P.Ltd v. M/S Chandmari Tea Co. P.Ltd1
which summarized this theory of separability as follows:
"When a contract contains an arbitration agreement, it
is a collateral term relating to the resolution of disputes,
unrelated to the performance of the contract. It is as if two
contracts — one in regard to the substantive terms of the
main contract and the other relating to resolution of disputes
— had been rolled into one, for purposes of
convenience."
