An agreement must contain the attributes required for an arbitration agreement, including the consensus of the parties to refer the dispute to arbitration, to be considered as an arbitration agreement under the Arbitration and Conciliation Act, 1996.

ORDER :

1. The captioned writ petition is filed by the plaintiff feeling aggrieved by the order dated 05.02.2016 passed by the learned Judge on I.A.No.2 filed under Section 8 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') wherein the learned Judge has ordered for return of plaint and the same is under challenge.

2. For the sake of brevity, the parties are referred to as per their rank before the Court below.

3. The plaintiff has instituted a suit for recovery of sum of Rs.1,66,99,728/-along with interest at the rate of 18% per annum. The plaintiff claims that it has entered into a project management and construction management agreement with defendant No.2, the owner, and defendant No.1 who appears to be the developer. The plaintiff claims that this agreement was entered into on 30.05.2012. The plaintiff claims that in terms of clause 4.1 of the agreement, he is entitled for a sum of Rs.5,05,00,000/-plus service tax as per the agreement. The plaintiff has specifically pleaded that in terms of the agreement, he has rendered service as enumerated under the agreement and accordingly invoices are raised in terms of payment schedule under clause 4.1 of the agreement. On these set of pleadings, the suit for recovery is instituted by the present plaintiff herein seeking recovery of the above said amount.

4. The defendants, on receipt of summons, tendered appearance requesting the Court to refer the dispute to arbitration by invoking arbitration clause as provided in clause 12 of the agreement. The said contention was strongly resisted by the plaintiff by filing detailed objections. The present plaintiff specifically pleaded at para 5 of the objection that the arbitration contemplated under the agreement is a non-binding arbitration and contrary to the provisions of the Act. The plaintiff further claims that in absence of valid arbitration agreement between the parties, neither parties are obligated to commence arbitration under the Act in order to resolve the disputes arising out of or in connection with the agreement. Referring to clause 12.2 of the agreement, plaintiff specifically contended that the said clause clearly indicates that parties intended to refer the disputes to a nonbinding arbitration. Therefore, contended that a non-binding arbitration is not a valid arbitration agreement in terms of the Act.

5. The learned Judge having examined the rival contentions has proceeded to allow the application filed under Section 8 of the Act and consequently, plaint is returned. The learned Judge while allowing the application was of the view that clause 12 in the agreement clearly provides alternate dispute resolution mechanism and therefore, plaintiff has to take recourse in terms of clause 12 of the agreement. It is in this background, learned Judge was of the view that the plaintiff without invoking clause 12 of the agreement has approached this Court and therefore, the learned Judge found that it was necessary to refer the matter to the dispute resolution mechanism relegating the parties to seek redressal of their dispute in terms of agreement dated 30.05.2012. It is this order which is under challenge.

6. Shri Aditya Vikram Bhat, learned counsel appearing for the petitioner/plaintiff reiterating the grounds urged in the writ petition would vehemently argue and contend before this Court that the order of the learned Judge is contrary to law and also contrary to the material placed before the learned Judge. Referring to the relevant clause 12.2 of the agreement, he would contend that the learned Judge has virtually misread the relevant clause incorporated in the agreement. Referring to clause 12.2, he would contend that agreement to refer the dispute to non-binding arbitration is not an arbitration for the purpose of Section 7 of the Act and therefore, he would contend that the defendants are not entitled to invoke Section 8 of the Act at all.

7. To buttress his arguments, he has referred to the meaning of "non-