Arbitration agreement and privity of contract are essential before invoking arbitration under the Act; working arrangements are not enough.

An arbitration application under sections 8 and 11 of the Arbitration and Conciliation Act, 1996 requires an arbitration agreement between the parties. Here, the record showed that the original works contract remained with GEL, while the applicant acted under a working arrangement and received payments on behalf of GEL. The correspondence, agreement, power of attorney, and payment certificate indicated authority to act for GEL, but not an assignment of contractual rights or acceptance of the applicant as a sub-contractor under the contract. In the absence of a concluded transfer of rights or any arbitration agreement with the respondent, privity of contract and the arbitral nexus were not established, and the application was held not maintainable.

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Issues: Whether the applicant established privity of contract and the existence of an arbitration agreement with the respondent so as to maintain an application under sections 8 and 11 of the Arbitration and Conciliation Act, 1996.

Analysis: Existence of an arbitration agreement between the parties is a condition precedent to invoking sections 8 or 11 of the Arbitration and Conciliation Act, 1996. The documents on record showed that the original works contract continued with GEL, while the applicant was engaged as a piece-rate worker and later dealt with the respondent for and on behalf of GEL under a working arrangement. The correspondence, agreement, power of attorney, and payment certificate indicated direct payment arrangements and authority to act on behalf of GEL, but not an assignment of the contract or acceptance of the applicant as a sub-contractor under the contract. In the absence of a concluded transfer of contractual rights or any arbitration agreement between the applicant and the respondent, the contractual relationship required for invoking arbitration was not made out.

Conclusion: The applicant failed to establish privity of contract or an arbitration agreement with the respondent, and the application under sections 8 and 11 was not maintainable.

Ratio Decidendi: A party can invoke sections 8 or 11 of the Arbitration and Conciliation Act, 1996 only if an arbitration agreement exists between the parties, and a mere payment or working arrangement without assignment of the contract does not create such privity or arbitral nexus.

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