An agreement between a contractor and a group of apartment owners regarding a TAMA 38 buildings refurbishing plan included an exclusive arbitration clause and a condition precedent under which the agreement enters into force only after the contractor receives building permits. The contractor did not receive building permits and the owners sought to cancel the agreement.
The Court held that although it is one agreement the arbitration clause should be deemed separated from the rest of the agreement and in fact it is an arbitration agreement separate from the general agreement, where the meaning of the parties' consent to transfer any dispute between them to arbitrator also includes disputes as to the validity or invalidity of the agreement. For that reason, the dispute as to the cancellation of the agreement is to be heard in arbitration and not at the Court.