The main legal point established is that disputes covered by arbitration clauses in an agreement should be referred to arbitration as mandated by the Arbitration and Conciliation Act, 1996, to efficiently resolve technical disputes.

G. RAJASURIA, J.

A ‘resume’ of facts, which are absolutely necessary for the disposal of this application would run thus:

The respondent/Plaintiff filed the suit seeking the following reliefs: -to direct the defendant to pay the plaintiff a sum of Rs.1,62,47,706/- inclusive of interest at 18% till the date of the suit with future interest at the rate of 6% till the date of realization.

-for costs.

Whereupon the applicant/defendant filed this Application No.2635 of 2008 under Order 14 Rule 8 of Original Side Rules read with Section 8 of the Arbitration and Conciliation Act, 1996, with the following prayer:

“To refer the dispute to arbitration and dismiss the above suit as not maintainable.”

2. For convenience sake, the parties are referred to here under according to their litigative status in the suit.

3. The learned senior counsel for the defendant drawing the attention of this Court to the averments as found set out in the affidavit accompanying the application as well as the averments in the plaint and the typed set of papers filed on either side, would set forth and put forth his argument to the effect that under Clauses 58 and 59 of the agreement, which emerged between the plaintiff and the defendant Arbitration clauses are contemplated and the plaintiff was not justified in filing the suit straight away. The Architect earlier issued the certificate on 16. 2007. Whereupon alone the plaintiff made his claim, as against which the defendant raised its objection that there are lot of defects to be remedied by the plaintiff in the construction made by him and as such, the retention money cannot be released as demanded by the plaintiff and instead of going for Arbitration, straight away the suit has been filed, which is liable to be dismissed.

4. Whereas in an attempt to torpedo and pulverize the argument put forth on the side of the defendant the learned counsel for the plaintiff would submit that the subject matter of the present suit is nothing to do with the Arbitration clauses as contained in Clauses 58 and 59 of the agreement. The Architect issued certificate in favour of the plaintiff and thereby the plaintiff being the contractor, was not in any way, under any necessity to invoke the Arbitration Clauses 58 and 59. There are laches on the part of the defendant in ‘Impeaching or disputing, impugning or challenging the certificate dated 16. 2007 issued by the Architect. During the pendency of the suit, the defendant’s caused the architect to revoke the earlier certificate issued by him; under Clauses 58 as well as 59; if at all the decision of the Architect is challenged by the contractor, the question of himself going for arbitration would arise and not under any other circumstances; within 14 days of receipt of the certificate issued by the Architect, the defendant should have released the amount, but it had not been doe so; and hence, for the purpose of recovering the said amount alone, this suit has been correctly filed, warranting no dismissal of the suit of referring the matter under Section 8 of the Arbitration and Conciliation Act for arbitral proceedings.

5. At this juncture, the point for consideration as to whether as per Section 8 of the Arbitration and Conciliation Act, the matter should be referred to arbitration by dismissing the suit?

6. Both the sides cited precedent.

.(a) On the defendant’s side the following decision are cited.

.(i) Executive director, Hindustan Petroleum Corporation Ltd., Mumbai and Others V. Sri Prabh Transport represented by P. Chokalinga Prabhu, Madurai (2001) 2 MLJ 719. Certain excerpts from it would run thus at P. 721 of MLJ:

“5…………………..

The Supreme Court further in that matter held as follows:

8. In the matter before us the arbitration agreement covers all the disputes between the parties in the proceedings before us and even more than that. As already noted, the arbitration agreement satisfies the requirements of Section 7 of the new Act. The language of Section 8