Explicit arbitration agreement required under Section 8; mediation clause insufficient to refer disputes to arbitrator.

JUDGMENT

This revision petition is filed against the Order in I.A. No. 2694 of 2016 of the III^rd Addl. Sub Court, Kozhikode, by which the Sub Court, Kozhikode, refused to refer the dispute in the suit to an Arbitrator.

2. The respondent/plaintiff filed a suit for realization of a sum of Rs. 45,81,000/-. The petitioners entered appearance and filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, pointing out that as per the agreement dated 24.07.2015, any further dispute shall be subject to the decision of the Arbitrator and, therefore, the suit cannot be maintainable. The plaintiff on the other hand contended that there is no agreement between the parties to refer the dispute to Arbitrator. It was also pointed out that the original agreement between the parties on 20.01.2012 did not contain a clause for arbitration and the arbitration clause was subsequently inserted in the measurement book. Even assuming that the said agreement was valid, inasmuch as the agreement did not mention that the dispute could be decided by the Arbitrator, the dispute cannot be referred to the Arbitrator.

2.1. The Trial Court, on appreciation of the rival submissions, found that the contention of the defendants is justifiable. That apart, the Trial Court also found that since the 2^nd defendant is not a signatory to the Arbitration clause agreement, the dispute between the plaintiff and the defendants being inseparable cannot be referred to the Arbitrator. Accordingly, the application was dismissed and hence the present revision petition.

3. Heard Sri. Ajith (Palakkad), the learned Counsel appearing for the appellants and Sri. Sethumadhavan, the learned Senior Counsel instructed by Sri. P. V. Anoop, the learned Counsel for the respondent. 4. On considering the submissions raised across the Bar and also the perusal of the agreement dated 20.01.2012 and also the subsequent agreement wherein it is alleged that the parties had agreed to refer the dispute to arbitration, this Court is of the considered view that the findings rendered by the Courts below are perfectly correct.

5. It is pertinent to mention that the original agreement dated 20.01.2012 did not contain a clause for arbitration. What is projected is a subsequent agreement on 24.07.2015. A copy of the agreement containing the arbitration clause is made available before this Court. On a perusal of the same, it is seen that what is agreed between the parties is the acknowledgment of Rs. 1,60,00,000/- and the balance amount to be decided after measurement of the work done by the plaintiff through a mediator. Therefore, it passes one’s comprehension as to how the aforesaid clause could be made use to refer the parties to the mediation.

6. It is now settled law that in order to invoke the provisions of the Arbitration and Conciliation Act, 1996, there should be an explicit intention between the parties to refer the dispute to an Arbitrator. Section 8 of the , no doubt, surpasses the jurisdiction of a Civil Court when there exists an agreement for arbitration. In the present case, however, the existence of the arbitration agreement itself is disputed. Though one of the reasons stated by the Trial Court is that the 2nd defendant is a non-signatory to the agreement and, therefore, cannot be referred to an Arbitrator, this Court cannot subscribe to the aforesaid views. But then, since from the agreement, which is under dispute, no explicit intention of the parties to refer the dispute to a Arbitrator is made out, the Trial Court is justified in rejecting the application. Accordingly, sustaining the Order impugned in the revision on other grounds, this Court finds that there is no merit in this revision petition. Accordingly, this revision petition fails and the same is hereby dismissed.