Judgments and Awards

PT Tirtamas Comexindo Vs. Delhi International Ltd.

The question that arose in this case was whether a fax message confirming the agreement can in law amount to an arbitration agreement. The court also discussed the underlying requirements of an arbitration agreement.

It was held that an arbitration agreement shall be in writing and may be made by exchange of letters, telex messages and other means of telecommunications which shall provide the record of such agreement. In this case, the respondent could not satisfy the court on any evidence that the fax message had been sent and received by the other party and the court was compelled to conclude that the fax message containing the arbitration clause was in fact not sent by the respondent.

The court, however, stated that there cannot be any inflexible or strict formula as to how an agreement would legally be construed as per the provisions of Section 7. the agreement may be made by several means including fax messages in writing, but it should be confirmed by any other mode of telecommunications.

Premlaxmi and Co Vs Trafalgar House Construction India Ltd.

The facts surrounding the case is that there was a reference in a contract to a document containing an arbitration clause and the question whether it can be treated as part of the contract was answered in the positive. It was held that the reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause a part of the contract.

Wankanner Jain Social Welfare Society Vs. Jugal Kishore Sapani

The respondent had filed a suit for interim injunction. The petitioner, after receiving the notice, entered appearance and filed counter and argued the matter. Thereafter the petitioner moved an application under Section 8.

The court held that filing of the counter by the petitioner was clearly the first statement on the substance of the dispute and an application, after submitting the first statement on the substance of the dispute, was not maintainable. It was further held that filing of the counter by the petitioner points to the petitioner subjecting itself to the jurisdiction of the Civil Court and accordingly, dismissal of the application under Section 8 is in accordance with law.

2002(2) RAJ 313 (Del)
Trans World Finance & Real Estate Co Pvt Ltd Vs. Union of India

This case considered the effect and scope of a dispute arising out of an invalid lease deed. The counsel for the petitioner urged that lease deed was unstamped and unregistered and therefore the arbitration agreement contained therein did not constitute a valid arbitration agreement.

The court held that it was a well established proposition of law that even if the said agreement entered into between the parties could not be treated as a valid lease agreement for lack of registration, it could certainly be looked into for the collateral purpose. Existence of an arbitration agreement or otherwise is one such purpose for which such an agreement can be looked into and relied upon.

AK Jaju Vs Avni Kumar

There were 2 agreements of which the 2nd one did not contain an arbitration agreement but was alleged to be in continuation of the first agreement. The plaintiff argued that the 2nd agreement was executed in supersession of the first one and thus no reference of dispute could be made to an arbitral tribunal.

The court held that the hand written endorsement at the top of the agreement implied that the same was in continuation to the earlier agreement and was to be treated as part and parcel of the earlier agreement. The 2nd agreement was necessitated to modify certain terms and conditions in the first agreement and not to override it.

NEPC-MICON Ltd Vs Perfect Engineering (Mysore) Works

The party had made an application under Section 8 for a direction to appoint an arbitration in terms of the arbitration clause, before the Principal District Judge. The issue that arose was whether the court can entertain such a prayer and it was held no.

The court stated that it is of utmost importance to note that under the scheme of the 1996 Act, an application simplicitor for referring the matter to an arbitrator is entertainable only by the concerned Chief Justice of the High Court or any person or institution designated by him, as has been specifically contemplated under Section 11. In the court's opinion, the lower court had erred in assuming jurisdiction under Section 8 for entertaining the application.

P. Anand Gajapathi Raju Vs. PVG Raju

In the instant case, during the pendency of the appeal before Supreme Court, all the parties entered into an arbitration agreement and agreed to refer their dispute to a retired Supreme Court Judge as sole arbitrator. The agreement was in the form of an application and had been signed by all the parties.

It was held that the agreement need not already be in existence; the phrase 'which is the subject of an arbitration agreement' does not necessarily require that the agreement must already be in existence before the action is brought in the Court- the phrase also connotes an arbitration agreement being brought into existence while the action is pending.

The court further stated that the arbitration agreement satisfied the requirements of section 7 and that the language of section 8 is peremptory. It is therefore obligatory for the court to refer the parties to arbitration in terms of their agreement. An application under section 8 merely brings to the court's notice that the subject matter of the action before it is the subject matter of an arbitration agreement.

Jagdish Raj & Brothers Vs Jagdish Raj

The petitioners had filed a suit for declaration praying for relief of permanent injunction and in the said suit they filed an application for ad interim injunction under Order 39 CPC. In the said suit, the respondents moved an application for referring the matter in dispute to arbitration as there was an arbitration agreement between the parties.

It was held that it is obligatory for the court to refer the matter to the arbitrator in terms of the arbitration agreement. Once an application is made by the opposite party in a civil suit for referring the matter to arbitration in terms of the arbitration agreement, then the court has to refer the matter to the arbitrator and the court is required to do nothing further ie. The court thereafter cannot decide the application under Order 39 CPC. Under the new Act, an arbitrator to whom the matter is referred, can pass appropriate interim orders to preserve property.

Sunil Kumar Vs AAKAR

This case considered the issue of limitation for petition for appointment of arbitrator. The right to invoke the arbitration clause accrued to the petitioner in 1996 who filed this instant petition in 2000. In view of the given facts and circumstances, it was held that the right to file the application arose on the date when the petitioner intimated to the resoindent that he was no longer interested in the partnership and sought dissolution and not from the date of the notice given 3 years later. Therefore the petition is barred by time and dismissed.

The court further elucidated that the right to invoke the arbitration clause accrues to a party the moment differences or disputes arise and are brought to each other's notice. No party can be allowed to sleep over or continue for years as in the present case where the petitioner had waited for 3 years to invoke the clause. It is not the date on which the notice is sent for invoking the arbitration clause which is relevant but the moment differences arise and are brought to each other's notice.

Sunair Hotels Ltd Vs Union of India

The issue was whether a formal application was necessary under section 8(1) and it was held in the affirmative.

The court held that section 8(1) specifically speaks about the party applying to the Judicial Authority for referring the parties to arbitration. Section 8(2) states that the application will not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. In view of the clear provisions of Section8, it cannot be said that a formal application is not required.

Considering the whole scheme of the Act, the option available to the party to subject himself to the jurisdiction of the Judicial Authority without resorting to arbitration, the stipulation of time when the application for reference should be filed and the specific condition that the application should be accompanied by the original arbitration agreement or a duly certified copy thereof, there is no doubt that the application under section 8(1) is a formal application.