The main legal point established in the judgment is the mandatory requirement of filing the original arbitration agreement or a certified copy thereof along with the application under Section 8 of the Arbitration and Conciliation Act, 1996.

Deepak Gupta, J. (Oral)

1. The question of law which arises for decision in this case is whether an application for referring a dispute to Arbitration Under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) must be accompanied by the original or certified true copy of the arbitration agreement or not?

2. The present petition is directed against the order dated 19.11.2010 passed by the learned Civil Judge, Junior Division, Kasauli whereby she rejected the application filed by the petitioners (here-in-after referred to as the defendants) for referring the dispute to arbitration. It is not necessary to either give detailed facts or go into the other aspects of the matter since one of the grounds on which the application was rejected was that the present petitioners did not alongwith the application file the original arbitration agreement or a certified copy thereof.

3. The facts necessary for disposal of the case are that an agreement was entered between the parties whereby the petitioner-Company agreed to take on lease certain property of the plaintiff and the said lease agreement contained an arbitration agreement. The plaintiff-respondent filed a suit claiming the lease money, whereas the case of the defendants is that it never took possession of the leased property. The defendants filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 before the learned trial Court praying that the lease agreement itself contained an arbitration clause and therefore, the matter be referred to arbitration.

4. I am not going into the merits of the case and I am deciding the case solely on the issue as to whether the application under Section 8 of the Act was maintainable without filing the original arbitration agreement or a certified copy thereof.

5. Shri Narender Sharma, learned counsel for the petitioner-Company submits that the case of the plaintiff itself is based on the lease agreement which itself contained the arbitration clause and therefore, mere non-filing of the original agreement or a certified copy thereof would not affect the rights of the petitioners-defendants to claim that the dispute should be referred to arbitration.

6. At the outset, it may be submitted that the mere existence of an arbitration clause does not oust the jurisdiction of the Civil Court. A party can file a suit on the basis of an agreement containing an arbitration clause. The defendant may not object to the dispute being decided by the Civil Court and may not file an application under Section 8 of the Act. In case, it wants that the dispute should be referred to arbitration he must follow the procedure laid down in Section 8 of the Act, which reads as follows:-

“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 sub-section (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.”

7. Sub-section (1) of the Act clearly provides that before the party who wants the matter to be referred to arbitration files his first statement it must move the application for referring the dispute to the arbitration. In case, a written statement is filed then the defendant looses his right to have the matter referred to arbitration. Sub-section (2) of Section 8 clearly provides that an application under sub-section (1) shall not be entertained unless it is accompanied by the original arbitratio