Court rules strict compliance with Section 8 of Arbitration Act mandatory, dismissing application for non-conformity.
In a significant ruling, the Calcutta High Court has dismissed an application filed by M/s Sammaan Capital Limited seeking to refer a civil dispute to arbitration, emphasizing the necessity for strict compliance with Section 8 of the Arbitration and Conciliation Act, 1996. The case, titled Jagannath Heights Pvt Ltd v. M/s Sammaan Capital Limited, revolved around an arbitration clause in a contract between the two parties, which the defendant sought to invoke.
The court, presided over by Justice Aniruddha Roy, highlighted that an application under Section 8 must be a distinct and standalone request filed before or at the time of submitting the first statement on the substance of the dispute. It cannot be amalgamated with general prayers for dismissal or rejection of the suit under different legal provisions.
The defendant, represented by Advocate Mr. Shounak Mukhopadhyay, argued that the existence of an arbitration clause necessitated the referral of the dispute to arbitration. However, the court found that the defendant's Master's Summons primarily sought dismissal, rejection, and return of the plaint, which did not satisfy the specific requirements of Section 8.
The court underscored that liberal interpretation of Section 8 is impermissible, as it would undermine the legislative intent. The ruling also clarified that objections in a written statement regarding jurisdiction do not equate to an application for arbitration referral under Section 8.
The court cited several precedents, including the decision in Smt. Gitarani Maity v. Krishna Chakraborty, to reinforce the principle that statutory procedures must be strictly followed. The judgment concluded that the defendant's application did not qualify as a valid Section 8 application, leading to its dismissal.
This ruling reiterates the importance of adhering to procedural mandates in arbitration matters, ensuring that parties seeking arbitration must follow the prescribed legal framework meticulously.
Bottom Line:
Arbitration and Conciliation Act, 1996 - An application under Section 8 of the Arbitration Act must be filed specifically and separately, complying with the statutory provisions. A written statement or other applications not adhering to the specific requirements of Section 8 cannot be treated as an application for referring disputes to arbitration.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Section 8, Civil Procedure Code, 1908 Order VII Rule 10 & Rule 11
