In the impugned Judgment, the learned Single Judge has
applied the Division Bench Judgment in Spentex as also the
Single Judge decision in Roshan Lal Gupta v. Parasram
Holdings Pvt. Ltd., 2009 (157) DLT 712. The first feature to be
noted is that Roshan Lal deals with a domestic arbitration and,
therefore, Section 45 of the A & C Act was not in
contemplation. The learned Single Judge, inter alia, concluded
that the word „party‟ in Section 8 of the A & C Act refers to a
party to the suit in contradistinction to a party to the
arbitration agreement. The learned Single Judge, in the
impugned Judgment, has dismissed the applications seeking
interim relief but inexplicably has kept the Suit alive for further
consideration. The learned Single Judge was statutorily bound
to return a finding with regard to whether or not the action or
suit was the subject, matter of an arbitration agreement. In the
facts of the case before us, since we are dealing with an
international commercial arbitration, Section 45 of the A & C
CS(COMM) 286/2020 Page 58 of 60 Signature Not Verified Digitally Signed By:JUSTICE MUKTA GUPTA Signing Date:24.11.2020 12:04:34
Act comes into play. After considering all the complexities in
the case, one of us had concluded in Bharti that a formal
application under Section 45 of the A & C Act was not
necessary, since it is incumbent for a Court seised of an action
in a matter in respect of which the parties have made an
arbitration agreement as envisaged in Section 44, to refer the
parties to arbitration except if the Court finds that the said
agreement is null and void, inoperative and incapable of being
performed. The dismissal of the Suit or the rejection of the
application for interim relief under Order XXXIX Rules 1 and 2
of the Code of Civil Procedure, 1908 (CPC) has the effect of
referring the parties to arbitration. By sagaciously not making
a statement under Section 8 of the A & C Act, the Defendant
has achieved indirectly what he could not have achieved
directly, namely, making it inevitable for the Plaintiff to join
arbitral proceedings without any consideration or adjudication
of its plea that no arbitration agreement exists between the
parties. It is for this reason that it seems to us essential that the
Court should have proceeded under Section 8 or Section 45 of
the A & C Act, as the case may be and with a view to return a
finding on the existence of an arbitration agreement between
the parties. If the prima facie finding is in favour of the
existence of an arbitration agreement, the Court would rightly
leave it to the Arbitral Tribunal to go into and determine the
details and the minute objections raised by the Plaintiff. The
Court ought not to skirt this issue, as it would tantamount to
running counter to the decisions of the Supreme Court in I
vaerner, SBP and Sukanya."
D. G.K.C. Projects Ltd. Vs. Unitech Machines Ltd.
MANU/DE/0146/2014 where, following Roshan Lal Gupta supra,
a plea of Section 8 contained in the written statement was held
to be tenable.
(i) The suit is barred by Section 5 of the Arbitration and
Conciliation Act, 1996 („the Act‟ for short). Defendant no. 2 has
contended that the plaintiff has sought to challenge the arbitration
clause in the sales contract and not the entire contract and a
CS (OS) No. 1392/2009 Page 4 of 25
declaration to the effect that the arbitration clause in an agreement is
null and void cannot be challenged by way of a civil suit as the Civil
Court‟s jurisdiction is very limited as laid out in Section 5 of the
Act. While arguing that the limited scope for action under Section 5
of the Act does not allow this Court to interfere in the present
matter, learned counsel for the defendants referred to the judgment
titled Roshan Lal Gupta Vs. Parasram Holdings Pvt. Ltd. & Anr.
Defendant no. 2 has contended that the plaintiff has
sought to challenge the arbitration clause in the sales
contract and not the entire contract and a declaration to
the effect that the arbitration clause in an agreement is
null and void cannot be challenged by way of a civil suit
as the Civil Court‟s jurisdiction is very limited as laid
CS (OS) No.2589/2010 Page 29 of 36
out in Section 5 of the Act. While arguing that the
limited scope for action under Section 5 of the Act does
not allow this Court to interfere in the present matter,
learned counsel for the defendants referred to the
judgment titled Roshan Lal Gupta Vs. Parasram
Holdings Pvt. Ltd. & Anr. reported as 157 (2009) DLT
712 which can be read as under :
9. Considering the mandate given by the Apex Court in Maharshi
Dayanand (supra) and the decision of this Court in Roshan Lal (supra),
and Shakti Bhog Foods (supra), I hold that though the Arbitral
Tribunal, may in its discretion, treat the plea referred to in sub-section
(2) or (3) of Section 16 as a preliminary issue, it is not obligatory for the
said Tribunal to do, in every case.