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23/06/2022, 21:31 Order Terminating The Arbitration Not Challenged; Can't File Section 8 Application Later: Karnataka High

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Home / News Updates / Order Terminating The...

NEWS UPDATES

Order Terminating The Arbitration Not


Challenged; Can't File Section 8 Application
Later: Karnataka High Court
Ausaf Ayyub 18 June 2022 8:30 PM

https://www.livelaw.in/news-updates/karnataka-high-court-section-16-of-the-ac-act-arbitration-clause-terminating-the-arbitral-proceedings-201860 1/15
23/06/2022, 21:31 Order Terminating The Arbitration Not Challenged; Can't File Section 8 Application Later: Karnataka High Court

The High Court of Karnataka has held that a subsequent Section 8 application would

be non-maintainable when the order of the arbitrator accepting objection to its

jurisdiction was not challenged.

The Division Bench of Justice Alok Aradhe and Justice J.M. Khazi held that once the

order of the arbitrator terminating the arbitral proceedings has attained finality, it

would not be open for a party who did not lay any challenge to the order to contend

that the dispute once again be referred to arbitration.

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23/06/2022, 21:31 Order Terminating The Arbitration Not Challenged; Can't File Section 8 Application Later: Karnataka High Court

Facts

The parties entered into an agreement dated 25.06.2008. The agreement had an

arbitration clause. A dispute arose between the parties which was referred to a sole

arbitrator.

Thereafter, the respondent filed an application regarding under Section 16 of the A&C

Act. The arbitrator vide order dated 07.11.2016, accepted the respondent's objection to

its jurisdiction and permitted the respondent to take recourse to appropriate legal

remedy. The appellant did not challenge the order of the arbitrator.

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Consequently, the respondent filed a Civil Suit for recovery of the amount in question.

The appellant filed an application under Section 8 of the A&C Act to refer the parties to

arbitration. The trial court rejected the application on the ground that the appellant did

not challenge the order of the arbitrator, therefore, the parties cannot be referred to

arbitration.

The appellant filed an appeal against the order of the trial Court.

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23/06/2022, 21:31 Order Terminating The Arbitration Not Challenged; Can't File Section 8 Application Later: Karnataka High Court

The Grounds For Appeal

The appellant challenged the order of the trial court on the following grounds:

• The parties admittedly have an arbitration clause between themselves.

• The provisions of Section 8 are mandatory and the parties must be referred to
arbitration when there exists an arbitration agreement between them.

Analysis By The Court

The Court observed that the provisions of Section 8 of the A&C Act are mandatory and

make it obligatory for the Court to refer the parties to arbitration in terms of the

arbitration agreement.

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However, the appellant not having challenged the order of the arbitrator by which it has

held that it has no jurisdiction to adjudicate the dispute has waived its right to contend

that the dispute should be referred to arbitration.

The Court held that once the order of the arbitrator terminating the arbitral

proceedings has attained finality, it would not be open for a party who did not lay any

challenge to the order to contend that the dispute once again be referred to arbitration.

Accordingly, the Court dismissed the appeal.

Case Title: BEML Ltd. v. Prakash Parcel Services Ltd. M.F.A. No. 4180 of 2019 (AA).

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23/06/2022, 21:31 Order Terminating The Arbitration Not Challenged; Can't File Section 8 Application Later: Karnataka High Court

Citation : 2022 LiveLaw (Kar) 218

Date: 08.06.2022

Counsel for the Appellant: Mr. Sandesh J. Chouta, Sr. Advocate and Mr. Ismail M.

Musba Advocate

Counsel for the Respondent: Mr. A.S. Gupra, Advocate.

Click Here To Read/ Download Order

TAGS KARNATAKA HIGH COURT  SECTION 16 OF THE A&C ACT  ARBITRATION CLAUSE 

TERMINATING THE ARBITRAL PROCEEDINGS 

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