Non-Filing of Application U - S 8 Arbitration Act Before Civil Court Does Not Debar Party From Seeking Appointment of Arbitrator - J&K&L High Court

02/07/2022, 17:12 Non-Filing Of Application U/S 8 Arbitration Act Before Civil Court Does Not Debar Party From
rty From Seeking Appointment Of Arbitrator: J&…
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NEWS UPDATES
Non-Filing Of Application U/S 8 Arbitration Act

Before Civil Court Does Not Debar Party From
Seeking Appointment Of Arbitrator: J&K&L
High Court
Basit Amin Makhdoomi 1 July 2022 6:15 PM
https://www.livelaw.in/news-updates/jammu-and-kashmir-and-ladakh-high-court-appointment-arbitrator-section-8-arbitration-act-202751 1/17
02/07/2022, 17:12 Non-Filing Of Application U/S 8 Arbitration Act Before Civil Court Does Not Debar Party From Seeking Appointment Of Arbitrator: J&…
The Jammu and Kashmir and Ladakh High Court on Tuesday reiterated that non-filing
of an application under Section 8 of the Arbitration and Conciliation Act would not
mean that the petitioner has surrendered to the jurisdiction of the court and left the
right to get the disputes resolved through arbitration so as to debar the petitioner for
seeking appointment of an arbitrator through the intervention of the Court.
Also Read - Sale Of Corporate Debtor As A 'Going Concern' Includes Both Assets
And Liabilities: NCLT Mumbai
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A single bench of Chief Justice Pankaj Mithal was hearing a plea filed by the petitioner
under Section 11(6) of the Act seeking the appointment of an arbitrator to adjudicate

the matters of controversy between the parties.
Opposing the plea, the respondents through their counsel Senior Advocate ZA Shah
raised a preliminary objection that the petitioner is not entitled to seek appointment of
an arbitrator as they had waived their right in this regard by not moving an application
under Section 8 of the Act before the civil court.
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Accused Amounts To Misconduct, Interference With Justice? MP High Court Seeks
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However, the bench observed that the issue whether the petitioner has waived her
right to seek arbitration by not taking the plea of arbitrability in proceedings before the
civil court is beyond examination by the court at this stage and may be considered by
the arbitrator if any and if necessary. It observed,
"In view of Section 11(6A) of the Act, the Chief Justice or his designate in considering
a petition for appointment of an arbitrator under Section 11 of the Act is supposed to
only examine as to the existence of the arbitration agreement pertaining to the
disputes raised between the parties and that all other issues have to be left to be
adjudicated upon by the arbitrator."
Also Read - Karnataka High Court Monthly Digest: June 2022 [Citations 180 - 239]
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The bench also recorded the observations made by the Supreme Court in Uttarakhand
Purv Sainik Kalyan Nigam Limited v. Northern Coal Field Limited : (2020) wherein it
was held.
"The High Court erred in dismissing the petition for appointment of an arbitrator
on the ground that the claim was barred by limitation as such a preliminary
objection ought to have been left to be decided by the arbitrator and that the
court was only required to determine the existence of the arbitration agreement
and if it so existed, it was bound to appoint an arbitrator."
Also Read - Extended Period Of Limitation Can Be Invoked Only When 'Suppression
Of Facts' Is Wilful To Evade Tax :CESTAT
While dealing with the second contention of the respondents that as the petitioner has
failed to move under Section 8 of the Act and instead chose to contest the matter by
filing an application under Order 7 Rule 11 CPC and therefore the petitioner has waived
the right for the appointment of an arbitrator, the bench observed that a plain reading
of Section 8 of the Act reveals that in the event a suit is brought before a court in
respect of a matter which is subject matter of an arbitration agreement, if a party to
the agreement or any person claiming through him applies to the court on or before
the date of submitting his first statement on the substance of the dispute, the court is
under an obligation to refer the parties to the arbitration unless it finds that prima facie
no valid arbitration agreement exists.

Placing reliance on Supreme court judgement In Rashtriya Ispat Nigam Limited & anr.
v. M/s Verma Transport Company : (2006) 7 SCC 275, the Supreme Court held that the
expression "first statement on the substance of the dispute" contained in Section 8(1)
of the Act is different from the expression "written statement" and observed that
supplemental and incidental proceedings are not part of the main proceedings.
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The court recorded that an application for rejecting a plaint is distinct from the main
proceedings and the averments or the defence if any taken. The rejection of the plaint
is on the basis of the averments made in the plaint and no defence or any document
filed in defence is to be examined in deciding an application under Order 7 Rule 11
CPC or rejecting the plaint. The provisions of Order 7 Rule 11 CPC are simply
procedural in nature so as to prevent vexatious and frivolous litigation and an
application there under cannot be regarded as a written statement on the substance of
dispute since the defence even if setup in such an application is not supposed to be
treated as a defence and examined in deciding such an application and thus, it would
not fall within the expression "first statement on the substance of the dispute", the
bench underscored.
Thus allowing the application, the bench went on to appoint a retd Chief Justice of
Meghalaya High Court as a sole arbitrator in the matter.
Case Title : Anita Mehta v Gulkand Hues Private Ltd., & another
Click Here To Read/Download Judgment
TAGS JAMMU AND KASHMIR AND LADAKH HIGH COURT CHIEF JUSTICE PANKAJ MITHAL
APPOINTMENT OF ARBITRATOR SECTION 8 ARBITRATION ACT
ARBITRATION AND CONCILIATION ACT 1996 (A&C ACT)
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02/07/2022, 17:12 Non-Filing Of Application U/S 8 Arbitration Act Before Civil Court Does Not Debar Party From

rty From Seeking Appointment Of Arbitrator: J&…

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