Back
2023 Supreme(Online)(KER) 18865
HIGH COURT OF KERALA
C.S. DIAS, J
KADAYATH GRANITES, – Appellant
Versus
TATA MOTORS FINANCE LTD., – Respondent
OP(C) 222 2023
PAUL K.VARGHESE, FAZIL P SAJU THALIATH, JAYASREE MANOJ, JITHIN PAUL VARGHESE, C.PRABITHA, ANN MARY FRANCIS, R.SRUTHY
Parties must refer disputes to arbitration when a valid arbitration agreement exists, as affirmed in prevailing case law.
Headnote:
Arbitration - Injunction - Arbitration and Conciliation Act - Section 8 - The court upheld the validity of the arbitration clause, confirming that parties must refer any disputes to arbitration as per the agreement.
Fact of the Case:
The petitioner filed a suit for injunction against the respondents, who sought to refer the matter to arbitration under an agreement clause. The lower court allowed this referral, leading to the original petition challenging the order.
Finding of the Court:
The court found that the lower court's order referring the matter to arbitration was consistent with established legal principles, particularly that valid arbitration agreements must be honored.
Issues: Whether the lower court's order to refer the parties to arbitration under the Arbitration and Conciliation Act was legally sound.
Ratio Decidendi: The court reiterated that if an arbitration agreement is valid, the parties are obligated to resolve disputes through arbitration, per the Supreme Court's ruling in a relevant precedent.
Final Decision: The original petition was dismissed.
JUDGMENT
Aggrieved by Ext.P6 order passed in I.A.No.4 of 2022 in O.S.No.287 of 2022 of the Court of IInd Additional Munsiff, Ernakulam, the plaintiff in the suit has filed the original petition. The respondents are the defendants.
2. The relevant background facts leading to Ext.P6 order, are: the petitioner has filed the suit against the respondents for a decree of injunction. The respondents entered appearance and filed I.A No.4 of 2022 (Ext.P3), under Section 8 of the Arbitration and Conciliation Act , 1996 (in short, “the Act”) to refer the parties to arbitration in view of clause 21.1 of the agreement executed between the parties. The application was opposed by the petitioner through Ext.P4 counter affidavit on the strength of the law laid down by this Court inTML Financial Services Ltd. v. Vinod Kumar [ 2010 (1) KHC 115 ]. The court below, by the impugned Ext.P6 order, allowed Ext.P3 application and referred the parties to arbitration. Ext.P6 is manifestly erroneous and unsustainable in law. Hence, the original petition.
3. Heard; Sri.Paul.K.Varghese, the learned Counsel appearing for the petitioner and Sri.P.Fazil, the learned Counsel appearing for the respondents.
4. The short point is, whether there is any illegality in Ext.P6 order.
5. Ext.P1 plaint has been instituted by the petitioner against the respondents on the basis of a transaction that is covered by the agreement bearing No.5002821590 dated
28.09.2018 executed between the parties.
6. Immediately, on receipt of the summons in the suit, the respondents entered appearance and filed Ext.P3 application, inter-alia, contending that by virtue of clause 21.1 in the above agreement, the parties had agreed that all disputes and differences arising between them out of the agreement would be referred to arbitration under the Act.
7. The court below, by the impugned Ext.P6 order, has allowed Ext.P3 application.
8. The law with regard to referring parties to arbitration by virtue of Section 8 of the Act is no longer res-
integra in view of the emphatic declaration of law laid down by the Hon’ble Supreme Court inVidya Drolia and ors. Vs. Durga Trading Corporation [ 2021 (2) SCC 1 ], wherein the Hon’ble Supreme Court has held that if there is a valid arbitration agreement, the parties have to be imperatively referred to arbitration. It is upto the parties to canvass all their contentions before the Arbitrator, including the issue of non-arbitrability of the dispute.
In the light of the categoric exposition of law in the afore-cited decisions, I do not find any error or illegality in Ext.P6 order warranting interference by this Court under Article 226 of the Constitution of India. The original petition fails and is accordingly dismissed.
