Section 8 arbitration request must precede the first substantive statement; participation in proceedings can waive the right to arbitrate.

Section 8 of the Arbitration and Conciliation Act, 1996 requires an application for reference to arbitration before the applicant submits its first statement on the substance of the dispute, and a first statement may include an interlocutory reply or other substantive step, not only a formal written statement. Participation before the Company Law Board, seeking time, filing replies and later pursuing civil proceedings amounted to waiver, acquiescence and abandonment of the arbitration clause, so the petitioners lost the right to arbitrate. The court also found no basis for writ interference under Articles 226 and 227 because the impugned order was reasoned, within jurisdiction and not perverse, and the company, not being a party to the arbitration agreement, could not be referred to arbitration.

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Issues: Whether the petitioners were entitled to a writ quashing the Company Law Board's order declining reference of the dispute to arbitration under section 8 of the Arbitration and Conciliation Act, 1996, and whether the petitioners had applied for arbitration before submitting their first statement on the substance of the dispute.

Analysis: The dispute turned on the requirements of section 8 of the Arbitration and Conciliation Act, 1996, namely the existence of an arbitration agreement, a timely application before the first statement on the substance of the dispute, and a subject matter covered by that agreement. The petitioners participated in the proceedings before the Company Law Board, sought and obtained time, filed interlocutory replies and other applications, and did not invoke arbitration at the threshold. The Court held that the first statement on the substance of the dispute is not confined to a formal written statement and may be constituted by an interlocutory reply or other step showing submission to the forum. The petitioners' conduct, including later resort to civil proceedings, showed waiver, acquiescence, and abandonment of the arbitration clause. The Court also held that the writ jurisdiction under Articles 226 and 227 did not warrant interference because the impugned order was reasoned, within jurisdiction, and not perverse. Additionally, the company itself was not a party to the arbitration agreement and could not be referred to arbitration.

Conclusion: The petitioners were not entitled to a reference to arbitration under section 8, and the Company Law Board's refusal to refer the matter was upheld.

Final Conclusion: The writ petition failed because the petitioners had lost the right to invoke arbitration by their conduct and no ground for supervisory interference was made out.

Ratio Decidendi: An application under section 8 of the Arbitration and Conciliation Act, 1996 must be made before the applicant submits its first statement on the substance of the dispute, and participation in the proceedings by taking substantive steps may amount to waiver of the right to arbitrate.

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