2000 (3) TMI 1068

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....nd meets the requirements of Section 7 of the Arbitration and Conciliation Act, 1996 (new Act). The question that arises for consideration is whether this Court in appeal can refer the parties to arbitration under the new Act. The Arbitration Act, 1940 expressly provided for the parties to a suit to apply for an order of reference of the subject matter of the suit (see Sections 21 to 25, Chapter IV relating to arbitration in suits). There is also authority for the proposition under the 1940 Act that with the reference of the disputes, the suit itself may stand disposed of. Part I of the new Act deals with domestic arbitrations. Section 5, which is contained in Part I of the new Act, defines the extent of judicial intervention in arbitration....

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.... an action in the Court against the other party; (3) subject matter of the action is the same as the subject matter of the arbitration agreement; (4) the other party moves the Court for referring the parties to arbitration before it submits his first statement on the substance of the dispute. This last provision creates a right in the person bringing the action to have the dispute adjudicated by Court, once the other party has submitted his first statement of defence. But if the party, who wants the matter to be referred to arbitration applies to the Court after submission of his statement and the party who has brought the action does not object, as is the case before us, there is no bar on the Court referring the parties to arbitration. In....