Arbitration: Supreme Court Upholds Rejection Of S. 8 Application Since Cause Of Action Went Beyond Transaction Containing Arbitration Agreement

The Supreme Court has upheld the decision of the Gujarat High Court where it had upheld the rejection of an application filed under Section 8 of the Arbitration and Conciliation Act, 1996 in a commercial civil suit, noting that the cause of action of the suit went beyond the transaction containing the arbitration agreement. Referring to the facts of the case, the court observed that the matter involved multiple transactions, involving different contracting parties and agreements, all of which did not contain an arbitration clause, except for the license agreement between the 1st respondent, A Infrastructure, and the appellant, Gujarat Composite. The present one cannot be said to be a case involving any “doubt” about non-existence of arbitration agreement in relation to the dispute in question.” The court further said: “There being no doubt about non-existence of arbitration agreement in relation to the entire subject-matter of the suit, and when the substantive reliefs claimed in the suits fall outside the arbitration clause in the original licence agreement, the view taken by the High Court does not appear to be suffering from any infirmity or against any principle laid down by this Court.” While considering the memo filed by respondents 3-5 before the Commercial Court, the court held that the consent of the said respondents for reference to arbitration could not have infused an arbitration clause in the tripartite agreement. Arbitration and Conciliation Act, 1996: Section 8- The Supreme Court has upheld the decision of the Gujarat High Court where it had upheld the rejection of an application filed under Section 8 of the Act in a commercial civil suit, noting that the cause of action of the suit went beyond the transaction containing the arbitration agreement.