Admitted liability cannot be sent to arbitration where no genuine dispute or difference exists between the parties.

An application under Section 8(1) of the Arbitration and Conciliation Act, 1996 was held not maintainable where the liability was admitted and acknowledged in the defendants' letter, minutes of meeting and affidavit. Because those documents recorded the outstanding amount and repayment schedule, there was no live dispute or difference concerning rights or obligations capable of reference to arbitration. The arbitration clause could not be invoked to refer an admitted liability to arbitration, and the application was liable to be rejected.

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Issues: Whether an application under Section 8(1) of the Arbitration and Conciliation Act, 1996 can be allowed where the liability sued upon is admitted and acknowledged.

Analysis: The admitted liability arose from the defendants' own letter, minutes of meeting, and affidavit, all of which acknowledged the outstanding amount and recorded a repayment schedule. Section 8 applies only where there is a difference or dispute concerning rights, obligations, payment, or any matter arising out of the agreement. An acknowledged and admitted liability does not constitute a live dispute or difference within the meaning of the arbitration clause.

Conclusion: The application under Section 8(1) was not maintainable in respect of the admitted liability and was liable to be rejected.

Ratio Decidendi: An arbitration clause cannot be invoked to refer an admitted and acknowledged liability to arbitration, because Section 8 operates only where a genuine dispute or difference exists between the parties.

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