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        Case ID :

        2008 (1) TMI 949 - SC - Indian Laws

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        Arbitration referral under Section 8 requires binding agreement and strict filing of the original or certified copy. Section 8 of the Arbitration and Conciliation Act, 1996 applies only where the parties to the dispute are bound by an existing arbitration agreement. ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                            Arbitration referral under Section 8 requires binding agreement and strict filing of the original or certified copy.

                            Section 8 of the Arbitration and Conciliation Act, 1996 applies only where the parties to the dispute are bound by an existing arbitration agreement. Because the plaintiffs and their predecessor were not parties to the partnership deed and there was no material showing assent to its arbitration clause, a civil court alone could decide the challenge to the deed's validity; the related claim for accounts and profits was also dependent on that issue. An application under Section 8 was further non-maintainable because the original arbitration agreement or a duly certified copy was not filed, and a mere copy of the deed on record did not satisfy the statutory condition. The reference to arbitration was therefore unsustainable.




                            Issues: (i) whether a dispute challenging the validity of a partnership deed to which the plaintiffs and their predecessor were not parties could be referred to arbitration under the arbitration clause in that deed; (ii) whether an application under Section 8 of the Arbitration and Conciliation Act, 1996 was maintainable without annexing the original arbitration agreement or a duly certified copy thereof.

                            Issue (i): whether a dispute challenging the validity of a partnership deed to which the plaintiffs and their predecessor were not parties could be referred to arbitration under the arbitration clause in that deed.

                            Analysis: Section 8 of the Arbitration and Conciliation Act, 1996 applies only where there is an arbitration agreement between the parties to the lis. The plaintiffs and their predecessor were not parties to the partnership deed dated 17.2.1992, and there was no material showing that they had signed, assented to, or were otherwise bound by the arbitration clause contained in that deed. The principal relief sought was a declaration that the later deed was illegal, void, and inoperative, and such a declaration could be granted only by a civil court. The claim for accounts and profits depended upon first establishing the invalidity of the later deed.

                            Conclusion: The dispute was not referable to arbitration and the civil court alone had jurisdiction to decide the issue.

                            Issue (ii): whether an application under Section 8 of the Arbitration and Conciliation Act, 1996 was maintainable without annexing the original arbitration agreement or a duly certified copy thereof.

                            Analysis: Section 8(2) makes the filing of the original arbitration agreement or a duly certified copy thereof a mandatory requirement for entertainment of the application. The application ultimately pressed before the court was not accompanied by either document, and the omission was not cured by the mere presence of a copy of the partnership deed on the record. The statutory condition precedent for seeking a reference to arbitration was therefore not satisfied.

                            Conclusion: The application under Section 8 was not maintainable.

                            Final Conclusion: The order of the High Court referring the matter to arbitration could not stand, and the trial court's refusal to refer the dispute was restored in effect.

                            Ratio Decidendi: A dispute can be referred under Section 8 only where all parties to the litigation are bound by an existing arbitration agreement, and the application must strictly comply with the mandatory requirement of filing the original agreement or a duly certified copy.


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                            ActsIncome Tax
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