Case Note & Summary
The respondent, Mohan Kumar Thakur, filed a suit for recovery of salary dues and other amounts totaling Rs. 66,13,717/- with interest against his employer, PricewaterhouseCoopers Service Delivery Centre (Bangalore) Private Limited. The suit was registered as O.S.No.230/2018 in the VII Additional City Civil and Sessions Judge, Bengaluru. The appellant-defendant entered appearance and filed IA No.1 under Section 8 of the Arbitration and Conciliation Act, 1996 read with Section 151 CPC, seeking reference of the dispute to arbitration, claiming that the employment contract contained an arbitration clause. The Trial Court rejected the application on the ground that the appellant had not produced the original arbitration agreement or a certified copy, and that the existence of the agreement was disputed. The appellant appealed under Section 37(1)(a) of the Act. The High Court held that Section 8 is mandatory and the court must refer parties to arbitration if an arbitration agreement exists, even if the original is not produced, as long as a copy is on record. The court found that the appellant had produced a copy of the agreement containing the arbitration clause, and the respondent had not denied its existence. Therefore, the Trial Court's order was set aside, and the parties were referred to arbitration. The appeal was allowed.
Headnote
A) Arbitration Law - Section 8 of the Arbitration and Conciliation Act, 1996 - Mandatory Reference - The court is bound to refer parties to arbitration if an arbitration agreement exists and the subject matter is arbitrable - The Trial Court erred in rejecting the application under Section 8 without considering the existence of the arbitration agreement - Held that the application ought to have been allowed (Paras 1-10).
Issue of Consideration
Whether the Trial Court was justified in rejecting the application under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the parties to arbitration, despite the existence of an arbitration agreement between them.
Final Decision
Appeal allowed. The order dated 20.08.2019 passed by the VII Additional City Civil and Sessions Judge, Bengaluru, rejecting IA No.1 in O.S.No.230/2018 is set aside. The parties are referred to arbitration in terms of the arbitration agreement. The Trial Court is directed to pass consequential orders.
Law Points
- Section 8 of the Arbitration and Conciliation Act
- 1996 is mandatory
- existence of arbitration agreement must be examined
- court cannot refuse reference if agreement exists
- burden on party seeking reference to produce original agreement or certified copy
