1999 (8) TMI 999 - HC - Indian Laws

High Court Upholds Arbitration Agreement Despite Technical Non-Compliance

The Punjab and Haryana High Court dismissed an appeal challenging a lower court's decision to stay a suit and refer the matter to arbitration. The main ... Requirement to accompany Section 8 application with original or duly certified copy of the arbitration agreement - Power to refer parties to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 - Doctrine that technical non-compliance will not defeat referral where arbitration agreement is already on recordRequirement to accompany Section 8 application with original or duly certified copy of the arbitration agreement - Doctrine that technical non-compliance will not defeat referral where arbitration agreement is already on record - Whether the application for referring the suit to arbitration could be entertained despite not being accompanied by the original arbitration agreement or a duly certified copy, when a copy of the agreement was already on the court record. - HELD THAT: - The Court found that subsection (2) of Section 8 requires that an application to refer parties to arbitration be accompanied by the original arbitration agreement or a duly certified copy. However, that requirement is directed to ensuring the agreement is before the judicial authority and cannot be construed so rigidly as to mandate dismissal where, as here, a copy of the arbitration agreement (Ex. P1) was already on the record having been produced earlier by the plaintiffs with the plaint. The Court reasoned by analogy that where the agreement is present on the record-whether produced earlier by the same or the other party-the object of subsection (2) is satisfied and a technical non-compliance by the party filing the Section 8 application should not defeat the referral. Applying that principle to the facts, the presence of Ex. P1 on record cured the defect in the respondents' earlier omission and justified the trial court's order referring the matter to arbitration. [Paras 3]The objection based on non-production of the original or a duly certified copy with the Section 8 application was rejected and the referral to arbitration was upheld; the appeal is dismissed.Final Conclusion: The High Court dismissed the appeal and upheld the trial court's order referring the suit to arbitration, holding that the presence of a copy of the arbitration agreement on the record satisfied the requirement of subsection (2) of Section 8 and that a technical lapse in accompaniment of the application did not disentitle the respondents to referral. Issues:1. Compliance with the provisions of the Arbitration and Conciliation Act, 1996 regarding the production of the arbitration agreement along with the application for referring the matter to the Arbitrator.Analysis:The judgment delivered by Justice S.S. Sudhalkar of the Punjab and Haryana High Court pertains to an appeal filed against an order by the Additional Civil Judge staying a suit and referring the matter to an Arbitrator. The main contention raised was the non-production of the certified copy of the Arbitration agreement by the respondents along with the application for reference, as required by Section 8 of the Arbitration and Conciliation Act, 1996. The appellants argued that since the application was not accompanied by the original agreement or a certified copy, it should not have been entertained. However, the respondents pointed out that a copy of the agreement had been produced by the appellants themselves along with the plaint, which was on record as Exhibit P1. The court noted that although the application for reference was given earlier, the copy of the agreement was produced by the respondents later. The judge emphasized that the provision of the Act should not be interpreted to dismiss an application if the copy of the agreement was produced earlier by the other party, as long as it is on record. Therefore, the technical plea of non-compliance with Section 8(2) of the Act was not valid in this case.The learned counsel for the appellants did not press for other contentions raised, leading to the conclusion that the appeal lacked merit and deserved to be dismissed. Consequently, the appeal was indeed dismissed by the High Court, upholding the decision of the lower court to stay the suit and refer the matter to arbitration.