Section 8 arbitration reference must be sought before the first substantive statement, including merit-based affidavits.

Section 5 of the Arbitration and Conciliation Act, 1996 does not bar judicial intervention where the Act itself permits it, including reference under Section 8. A party seeking arbitration must apply no later than the filing of its first statement on the substance of the dispute, and that statement may be found in affidavits or interlocutory pleadings that address the merits. Here, the applicant had already participated in the company law proceedings and filed an affidavit dealing with the controversy before seeking reference. The Section 8 request was therefore not made in time and was not maintainable.

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Issues: Whether the application for reference of the dispute to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 was maintainable after the applicant had already filed affidavits and taken a stand on the merits in the pending proceedings under sections 397 and 398 of the Companies Act, 1956.

Analysis: Section 5 of the Arbitration and Conciliation Act, 1996 does not create an absolute bar on judicial intervention in all matters touching arbitration, because the Act itself contemplates judicial action in specified situations, including Section 8. The controlling requirement under Section 8 is that the party seeking reference must apply not later than the date of submitting its first statement on the substance of the dispute. The term is not confined to a written statement in the main proceeding; it may be ascertained from affidavits and other interlocutory pleadings if they deal with the merits of the controversy. On the facts, the applicant had knowledge of the agreement from the outset, participated in the proceedings, filed an affidavit dealing extensively with the substance of the allegations, and only much later sought reference to arbitration. The application was therefore not made at the stage required by Section 8.

Conclusion: The request for reference to arbitration was not maintainable and was rightly rejected.

Final Conclusion: The dispute was allowed to proceed before the Company Law Board, and the attempt to shift the matter to arbitration failed because the statutory threshold under Section 8 had already been crossed.

Ratio Decidendi: An application under Section 8 of the Arbitration and Conciliation Act, 1996 must be made before the party seeking arbitration files its first statement on the substance of the dispute, and such statement may be gathered from affidavits or interlocutory pleadings that address the merits.

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