Back
2023 Supreme(Online)(KER) 6529
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 to a valid arbitration agreement must be referred to arbitration, and all disputes, including non-arbitrability, are for arbitrators to resolve.
Headnote:
Arbitration - Suit - Arbitration and Conciliation Act - Section 8 - The court reaffirmed that valid arbitration agreements necessitate parties' referral to arbitration, reinforcing the autonomy of arbitrators to resolve disputes, including non-arbitrability contentions.
Fact of the Case:
The petitioner filed a suit seeking an injunction against the respondents, who requested referral to arbitration based on an agreement clause. The trial court allowed this request, prompting the petitioner to challenge the decision as legally erroneous.
Finding of the Court:
The court found no illegality in the trial court's order, confirming that valid arbitration agreements compel referral to arbitration, aligning with established legal precedents.
Issues: Whether the trial court's order to refer the matter to arbitration was legally erroneous.
Ratio Decidendi: The court upheld the principle that a valid arbitration agreement requires referral to arbitration, emphasizing that all disputes, including those regarding non-arbitrability, can be addressed by arbitrators.
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.
