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Monday, March 15, 2010

Language of S.8 is peremptory in nature

2010(1) LAW HERALD (P&H) 319
IN THE HIGH COURT OF PUNJAB AND HARYANA
Before
The Hon’ble Mr. Justice Sham Sunder
Civil Revision No. 4773 of 2008
M/s Magma Leasing Limited & Ors.
v.
Inder Pal Singh & Ors.
{Decided on 07/08/2009}
For the Petitioner: Mr. Yashwinder Paul Singh, Advocate.
For the Respondent: Ex-parte.
IMPORTANT POINT
Arbitration--Agreement--Once the execution of agreement between the parties containing agreement clause was admitted by trial Court, it was required to refer the matter to Arbitrator--Trial Court not required to go into the legality or otherwise of the same.
(A) Arbitration and Conciliation Act, 1996, S.8--Arbitration agreement--Jurisdiction of Civil Court--Once the execution of the agreement between the parties containing the arbitration clause was admitted by trial Court it was required to refer the matter to the arbitrator--Trial Court not required to go into the legality or otherwise of the same--Trial Court, went into the legality or otherwise of agreement and recorded observations that at the time of execution of such an agreement once of the parties being in a greater bargaining position, generally drafts the terms which suit most, and go against other party which is in a weaker bargaining position--Held, these observations were not warranted while deciding application as to whether the matter was to be referred to Arbitrator or not--Order impugned liable to set aside.
(B) Arbitration and Conciliation Act, 1996, S.8--Language of S.8 is peremptory in nature--In cases where there is an arbitration clause in agreement, it is obligatory for Court to refer parties to arbitration in terms of their arbitration agreement and nothing to be decided in the original action after such application is made except to refer the dispute to an arbitrator--The language of S.8 is clear that if there was any objection as to the applicability to facts of the case, the same will have to be raised before concerned arbitral tribunal--Civil Court should not embark upon an enquiry in regard to the application of arbitration clause to facts of the case. (P.8)

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