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        2016 (11) TMI 544 - SC - Indian Laws

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        Section 8 arbitration reference upheld where the agreement was produced later, and non-signatory status or unregistered partnership did not bar it. An application under Section 8 is not defeated by initial non-filing of the original or certified copy of the arbitration agreement if the document is on ...
                      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.

                            Section 8 arbitration reference upheld where the agreement was produced later, and non-signatory status or unregistered partnership did not bar it.

                            An application under Section 8 is not defeated by initial non-filing of the original or certified copy of the arbitration agreement if the document is on record when the court considers the application. The phrase "shall not be entertained" was read as barring merits review only until the agreement is produced, so the objection failed once the deeds were before the court. A non-signatory defendant did not prevent reference to arbitration where the dispute substantially arose from deeds containing arbitration clauses. The dispute was also arbitrable despite the alleged unregistered status of the partnership, because the parties had agreed to arbitrate disputes arising from the partnership arrangements.




                            Issues: (i) Whether non-filing of the original or certified copy of the retirement deed and partnership deed along with the Section 8 application required rejection of the application. (ii) Whether the presence of a non-signatory defendant prevented reference of the dispute to arbitration. (iii) Whether a dispute concerning an unregistered partnership could still be referred to arbitration when the deeds contained arbitration clauses.

                            Issue (i): Whether non-filing of the original or certified copy of the retirement deed and partnership deed along with the Section 8 application required rejection of the application.

                            Analysis: The application under Section 8(1) was initially filed without the deeds, but the originals were brought on record before the court took up the matter for decision. The expression "shall not be entertained" in Section 8(2) was construed to mean that the court cannot proceed to consider the application on merits unless the original agreement or certified copy is on record at the time of consideration. Since the relevant documents were already on record when the application was decided, and the plaintiffs themselves had relied on the deeds, the objection based on initial non-filing did not survive.

                            Conclusion: The objection under Section 8(2) failed and the reference to arbitration was upheld.

                            Issue (ii): Whether the presence of a non-signatory defendant prevented reference of the dispute to arbitration.

                            Analysis: The dispute substantially arose out of the retirement deed and partnership deed, to which the plaintiffs were parties directly or through persons from whom they derived title. Only one defendant was not shown to be a party to those deeds, but that circumstance did not alter the character of the dispute or require bifurcation of causes of action. The essential controversy remained one covered by the arbitration clauses contained in the deeds.

                            Conclusion: The absence of one defendant as a signatory did not bar reference of the dispute to arbitration.

                            Issue (iii): Whether a dispute concerning an unregistered partnership could still be referred to arbitration when the deeds contained arbitration clauses.

                            Analysis: Both the retirement deed and the partnership deed contained express clauses providing for arbitration of disputes and differences arising out of the deeds or partnership affairs. No statutory bar was shown to prevent arbitration merely because the partnership was unregistered. Where the parties and those claiming through them had agreed to arbitration, the dispute remained arbitrable.

                            Conclusion: The dispute was capable of being referred to arbitration notwithstanding the alleged unregistered status of the partnership.

                            Final Conclusion: The appeal did not disclose any infirmity in the orders below, and the direction to refer the parties to arbitration was maintained.

                            Ratio Decidendi: An application under Section 8 is not to be rejected for initial non-filing of the arbitration agreement if the original or certified copy is on record when the court considers the application, and the existence of a valid arbitration clause permits reference even where one party is a non-signatory or the partnership is said to be unregistered.


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                            ActsIncome Tax
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