Case Reference
:
Civil Appeal No.5251 of 1993, decided on March, 28,
2000.
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.
Judges :
Justice D.P.Wadhwa and Justice Ruma Pal.
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Parties :
P.Anand Gajapathi Raju and others (Appellants)Vs.
P.V.G.Raju (Dead) and others (Respondents).
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Question of Law :
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| Whether court in appeal can refer the
parties to arbitration under Section 8 of the Act of 1996 even
where arbitration agreement is entered into during pendency
of the appeal. |
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Gist of the Case:
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| The parties entered into an arbitration
agreement during the pendency of the appeal in the court and
agreed to refer their disputes to an arbitrator. The conditions
which are to be satisfied under sub-sections (1) and (2) of
Section 8 of the Act of 1996 before the court can exercise
its powers are:
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| 1) |
there is an arbitration agreement
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| 2) |
a party to the agreement brings 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. |
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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 it is in the present case, there is no bar on
the court referring the parties to arbitration. The learned
Judges held that the phrase “which is the subject of an
arbitration agreement” does not, in the context, necessarily
require that the agreement must be already in existence before
the action is brought in the court. The phrase also connotes
an arbitration agreement being brought into existence while
the action is pending.
The language of Section 8 of the Act of 1996 is peremptory.
It is therefore, obligatory for the court to refer parties to
arbitration in terms of their arbitration agreement. All the
rights, obligations and remedies of the parties would be governed
by the Act of 1996 including the right to challenge the award.
The court to which the party shall have recourse to challenge
the award would be the court as defined in clause (e) Section
2 of the Act of 1996 and not the court to which the an application
under Section 8 of the Act of 1996 is made.
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Citation :
(2000) 4 SCC 539.
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