What is the procedure to be adopted by a Court when a petition is filed by one of the parties to the suit under section 8 of Arbitration & Conciliation Act, 1996. Is the Court to refer the parties to arbitration mechanically by looking into the agreement produced or is it for the court to consider and decide whether the agreement produced was executed by the parties. If it is found that the agreement was executed, is it for the court to decide whether the agreement is vitiated by fraud or misrepresentation.

2. Section 8 of Arbitration And Conciliation Act, 1996 (hereinafter referred to as the Act), deals with the power to refer parties to arbitration when there is an arbitration agreement. Under sub section (1), a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement and if a party applies not later than before submitting his first statement on the substance of the dispute, judicial authority shall refer the parties to arbitration. Sub section (2) provides that the application so filed shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. Section 16 of the Act deals with the competence of arbitral tribunal to rule on its own jurisdiction. Under sub section (1), the arbitral tribunal is competent to rule on its own jurisdiction including ruling on any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause, which forms part of a contract shall be treated as an agreement independent of the terms of the contract and a decision by the tribunal that the contract is null and void shall not entail ipso jure invalidity of the arbitration clause.

3. Section 8 of the Act reads:-

8. Power to refer parties to arbitration where there is an arbitration agreement:-

.(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in subsection (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made."

It cannot be said that as and when an application is filed by a party as provided under sub section

.(1) of Section 8 producing along with the application the original or the duly certified copy of an agreement which contains an arbitration clause, court shall refer the parties to arbitration. Court cannot act mechanically. Instead it has a duty to decide whether there is a valid agreement executed by the parties which contains an arbitration clause. Only if it is found that there is a valid agreement between the parties and that agreement contains an arbitration clause and along with the application the original of the agreement or its duly certified copy was filed and application is filed before submitting his first statement on the substance of the disputes, parties can be referred to arbitration as provided under section 8 of the Act.

4. Section2(1)(b) defines an arbitration agreement as means an agreement referred to in Section 7. Under section 7(3) an arbitration agreement shall be in writing. Under sub section (4) of Section 7, an arbitration agreement is in writing if it is contained in a document signed by the parties, or an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement or an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

5. It is well settled that Scheme of Arbitration And Con