Case Note & Summary
The petitioner, M/S Alang Metal Exim Pvt. Ltd., filed a money suit (O.S.No.3749/2013) against the respondents, MSTC Limited and The Fertilizers & Chemicals Travancore Limited, before the XIV Additional City Civil Judge at Bangalore. The respondents entered appearance and filed a written statement. Subsequently, they filed applications under Section 8 of the Arbitration and Conciliation Act, 1996 (IA Nos. 1 and 2) seeking reference of the dispute to arbitration, alleging that the suit was barred by an arbitration agreement between the parties. The trial court allowed these applications by order dated 06.06.2014, directing the parties to arbitration. Aggrieved, the petitioner filed writ petitions under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka, challenging the trial court's order. The petitioner argued that by filing the written statement, the respondents had submitted to the jurisdiction of the civil court and thus waived their right to seek arbitration. The respondents contended that Section 8 does not prescribe any time limit for filing such an application and that the filing of a written statement does not constitute waiver. The High Court, after hearing both sides, dismissed the writ petitions, holding that Section 8 of the 1996 Act does not require the application to be made before filing the written statement. The court reasoned that the arbitration agreement is binding and the court's duty is to refer the parties to arbitration if the existence of the arbitration agreement is not disputed. The filing of a written statement is a procedural step and does not amount to a waiver of the right to seek arbitration. The court upheld the trial court's order, confirming the reference to arbitration.
Headnote
A) Arbitration Law - Reference to Arbitration - Section 8 of the Arbitration and Conciliation Act, 1996 - Time for Filing Application - The court held that Section 8 does not prescribe any time limit for filing an application for reference to arbitration, and the mere filing of a written statement does not constitute a waiver of the right to seek arbitration. The trial court's order allowing the applications under Section 8 was upheld. (Paras 1-5)
B) Civil Procedure - Written Statement - Effect on Right to Arbitration - Order VIII Rule 1 of CPC - The court observed that the filing of a written statement is a procedural step and does not amount to submission to the jurisdiction of the court for the purpose of waiving the right to arbitration. The defendants' applications under Section 8 were maintainable even after filing the written statement. (Paras 3-5)
Issue of Consideration
Whether the filing of a written statement by the defendants before applying under Section 8 of the Arbitration and Conciliation Act, 1996 for reference of the dispute to arbitration amounts to waiver of their right to seek arbitration, and whether the trial court was justified in allowing the applications under Section 8 despite the written statement having been filed.
Final Decision
The High Court dismissed the writ petitions, upholding the trial court's order dated 06.06.2014 allowing the applications under Section 8 of the Arbitration and Conciliation Act, 1996 and directing reference of the dispute to arbitration.
Law Points
- Section 8 of the Arbitration and Conciliation Act
- 1996 does not prescribe a time limit for filing an application for reference to arbitration
- filing of written statement does not constitute waiver of right to seek arbitration
- arbitration agreement is binding on parties and court must refer parties to arbitration if existence of arbitration agreement is not disputed
Case Details
2019 LawText (KAR) (06) 36
Writ Petition Nos. 2343-2344 of 2015 (GM-CPC)
Sri. P D Surana (for petitioner), Sri. Vishnu Vinayak C R and Sri. T Suryanarayana (for respondents)
M/S Alang Metal Exim Pvt. Ltd.
MSTC Limited and The Fertilizers & Chemicals Travancore Limited
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India challenging an order of the trial court allowing applications under Section 8 of the Arbitration and Conciliation Act, 1996 for reference of the dispute to arbitration.
Remedy Sought
The petitioner sought quashing of the trial court's order dated 06.06.2014 allowing IA Nos. 1 and 2 filed by the respondents under Section 8 of the Arbitration and Conciliation Act, 1996.
Filing Reason
The petitioner contended that the respondents, by filing a written statement, had submitted to the jurisdiction of the civil court and thus could not subsequently seek reference to arbitration.
Previous Decisions
The trial court (XIV Additional City Civil Judge at Bangalore) allowed the respondents' applications under Section 8 of the Arbitration and Conciliation Act, 1996, directing the parties to arbitration.
Issues
Whether the filing of a written statement by the defendants before applying under Section 8 of the Arbitration and Conciliation Act, 1996 amounts to waiver of the right to seek arbitration?
Whether the trial court was justified in allowing the applications under Section 8 of the Arbitration and Conciliation Act, 1996 despite the written statement having been filed?
Submissions/Arguments
Petitioner argued that the respondents, by filing the written statement, had subjected themselves to the jurisdiction of the court and therefore their applications under Section 8 could not be entertained.
Respondents argued that Section 8 does not prescribe any time limit for filing an application for reference to arbitration and that the filing of a written statement does not constitute waiver of the right to seek arbitration.
Ratio Decidendi
Section 8 of the Arbitration and Conciliation Act, 1996 does not prescribe any time limit for filing an application for reference to arbitration. The mere filing of a written statement does not constitute a waiver of the right to seek arbitration. The court must refer the parties to arbitration if the existence of an arbitration agreement is not disputed.
Judgment Excerpts
The petitioner being the plaintiff in a money suit in O.S.No.3749/2013 is invoking the writ jurisdiction of this Court for assailing the order dated 06.06.2014 made by the trial Court allowing the applications filed by the respondent-defendants in IA Nos. 1 and 2 under Section 8 of the Arbitration and Conciliation Act, 1996 seeking reference of the subject 'dispute' to the arbitration.
Learned counsel for the petitioner Mr. P.D. Surana vehemently argues: a) that the respondent-defendants having filed the Written Statement have subjected themselves to the jurisdiction of the Court for the purpose of the trial of the suit and therefore, their applications filed under Section 8 of the 1996 Act could not have been favoured;
Procedural History
The petitioner filed a money suit (O.S.No.3749/2013) before the XIV Additional City Civil Judge at Bangalore. The respondents entered appearance and filed a written statement. Thereafter, the respondents filed IA Nos. 1 and 2 under Section 8 of the Arbitration and Conciliation Act, 1996 seeking reference of the dispute to arbitration. The trial court allowed these applications by order dated 06.06.2014. The petitioner challenged this order by filing writ petitions under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka, which were dismissed on 03.06.2019.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 8
- Code of Civil Procedure, 1908: Order VIII Rule 1
