Sec 8 Arbitration Act - Court Can't Adjudicate Bifurcability Of Causes Of Action Or Presence Of Necessary Parties After 2015 Amendment: Calcutta HC
3 years, 1 month ago

Sec 8 Arbitration Act - Court Can't Adjudicate Bifurcability Of Causes Of Action Or Presence Of Necessary Parties After 2015 Amendment: Calcutta HC

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The Calcutta High Court on Friday had the opportunity to expound on the issue as to whether Courts should consider the dictum of the Supreme Court as laid down in Sukanya Holdings Ltd. v. Jayesh H. Pandya regarding non-permissibility of bifurcation of subject-matter or causes of action in a suit while adjudicating upon an application filed under section 8 of the Arbitration and. The Calcutta High Court on Friday had the opportunity to expound on the issue as to whether Courts should consider the dictum of the Supreme Court as laid down in Sukanya Holdings Ltd. v. Jayesh H. Pandya regarding non-permissibility of bifurcation of subject-matter or causes of action in a suit while adjudicating upon an application filed under section 8 of the Arbitration and Conciliation Act, 1996. Observations Parties must be referred to arbitration if a valid arbitration agreement exists in suits filed post-2015 amendment The Court noted that Section 8 of the Arbitration Act mandates a judicial authority before which an action is brought to refer a matter which is the subject matter of an arbitration agreement to arbitration. Furthermore, Justice Bhattacharya noted that the 2015 amendment to Section 8 was recommended by the Law Commission Report No.246 in the wake of the verdict of the Supreme Court in Sukanya Holdings Pvt Ltd 5 SCC 531 which held that arbitration reference was not maintainable against parties not covered by the arbitration agreement. In this regard, the Court clarified, "However, this recommendation did not find place in the final amendment which instead brought '…notwithstanding any judgment, decree or order of the Supreme Court or any Court…' in section 8" Pursuant to a reference to a host of Supreme Court judgments in this regard, Justice Bhattacharya ruled, "The only conclusion which emerges from the above interpretations and decisions is this: a Court must keep a hands-off approach – as opposed to a face-off with the arbitration process − and give a decisive push to the arbitral process once the court is satisfied, prima facie, that a valid arbitration agreement exists in a matter which is arbitrable.

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