Continuing To Contest The Suit Does Not Waive The Right To Arbitration When A Section 8 Objection Was Raised In Written Submissions And Arguments: Delhi High Court.
The High Court of Delhi has held that a party cannot be deemed to have waived off its right to arbitration merely because it continued to contest the suit when it had specifically raised objection to the maintainability of the suit due to the presence of the arbitration agreement. The bench of Justice C. Hari Shankar held that when a party takes a specific objection predicated on Section 8 in the application under Order XXXVII Rule 3 seeking leave to defend the suit and that objection, thereafter, is reiterated in the written statement and arguments. The appellants contended that they raised a Section 8 objection, both in the written statement filed after the Division Bench's order and in their initial application for leave to defend the suit. The Court held that an objection regarding non-maintainability of the suit due to the presence of the arbitration agreement cannot be considered to be raised belatedly in terms of Section 8 of the A&C Act when it was taken in the application under Order XXXVII Rule 3 for grant of leave to defend the suit. The Court held that once a party has duly taken objection to the jurisdiction of the Court to entertain the suit due to the presence of the arbitration clause between the parties in its written statement, it would be sufficient compliance of Section 8 of the A&C Act and there is no need for a separate application.
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