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"Stay of proceedings in respect of matters to be refer-
871
red to arbitration:-Notwithstanding anything contained in the Arbitration Act, 1940, or in the Code of Civil Procedure, 1908, if any party to an agreement to which Article II of the Convention set forth in the Schedule applies, or any person claiming through or under him commences any legal proceedings in any Court against any other party to the agreement or any person claiming through or under him in respect of any matter agreed to be referred to arbitration in such agreement, any party to such legal proceedings may, at any time after appearance and before filing a written statement or taking any other step in the proceedings, apply to the Court to stay the proceedings and the Court, unless satis- fied that the agreement is null and void, inoperative or incapable of being performed or that there is not, in fact, any dispute be- tween the parties with regard to the matter agreed to be referred, shall make an order staying the proceedings."

Section 3 of the Foreign Awards (Recogni-

tion & Enforcement) Act is analogous to s. 34 of the Indian Arbitration Act which is as follows:-

"Agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceed- ings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and will- ing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings."

It may be straightaway noticed that while s. 34 of the Indian Arbitration Act vests in the Court the discretion to stay or not to stay the proceedings, s. 3 of the Foreign Awards (Recognition & Enforcement) Act vests no such discre- tion in the Court. Under the Foreign Awards (Recognition & Enforcement) Act it is mandatory that the proceedings could be stayed if the conditions prescribed are fulfilled. But, whether it is a defendant who invokes the discretion of the Court under s. 34 of the Indian Arbitration Act or whether it is a defendant who seeks to enforce the right under s. 3 of the Foreign Awards (Recognition & Enforcement) Act, it is neces- sary that he should not have disentitled himself, from doing so either by filing a written statement or by taking any other step in the proceedings. His application to the Court, be it under s. 34 of the Indian Arbitration Act. or s. 3 of the Foreign Awards (Recognition & Enforcement) Act may be filed "before filing a written statement or taking any other step in the proceedings." It is competent then only and not thereafter. The question is when may a written statement said to have been filed or when may any other step said to have been taken in the proceedings?

Posing next the question what other steps the legislature contemplated as disentitling a party from obtaining stay of the proceedings, the learned Judges applied the principle of ejusdem generis and held:

"That some other step must indis-
putably be such step as would manifestly display an unequivocal intention to proceed with the suit and to give up the right to have the matter disposed of by arbitration. Each and every step taken in the proceedings cannot come in the way of the party seeking to en- force the arbitration agreement by obtaining stay of proceedings but the step taken by the party must be such step as would clearly and unmistakably indicate an intention on the part of such party to give up the benefit of arbi- tration agreement and to acquiesce in the proceedings commenced against the party and to get the dispute resolved by the court. A step taken in the suit which would disentitle the party from obtaining stay of proceeding must be such step as would display an unequivocal intention to proceed with the suit and to abandon the benefit of the arbitration agree- ment or the right to get the dispute resolved by arbitration."