Arbitration and Conciliation Act, 1996
Section 8 of Arbitration Act: Reference of Parties to Arbitration
Section 8 of the Arbitration and Conciliation Act, 1996 requires a judicial authority to refer parties to arbitration where an action concerns a matter covered by an arbitration agreement and the statutory conditions are satisfied. The provision also sets out filing requirements and clarifies that arbitration may proceed even while the reference application is pending.
Section 8 - Power to Refer Parties to Arbitration Where There Is an Arbitration Agreement
(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof:
Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.
Amendment note: Sub-section (1) was substituted and the proviso to sub-section (2) was inserted by Act 3 of 2016, section 4, with effect from 23-10-2015.
Meaning and Purpose of Section 8
Section 8 gives effect to the parties' agreement to arbitrate when a dispute covered by that agreement is brought before a judicial authority. Where the statutory requirements are met, the judicial authority is required to refer the parties to arbitration unless it finds that, on a prima facie examination, no valid arbitration agreement exists.
The provision therefore supports the enforceability of arbitration agreements and limits continuation of court proceedings on matters the parties have agreed to submit to arbitration.
Conditions for Reference to Arbitration
Prima Facie Test Under Section 8
Section 8(1) uses the expression "unless it finds that prima facie no valid arbitration agreement exists". The statutory focus at the referral stage is therefore on a preliminary examination of whether a valid arbitration agreement exists.
Original Arbitration Agreement or Certified Copy
Section 8(2) requires the application to be accompanied by the original arbitration agreement or a duly certified copy. The proviso addresses the situation where the original or certified copy is held by the other party.
In that situation, the applicant may file a copy of the arbitration agreement together with a petition requesting the Court to direct the other party to produce the original agreement or its duly certified copy.
Arbitration Can Continue While Section 8 Application Is Pending
Section 8(3) expressly provides that an arbitration may be commenced or continued and an arbitral award may be made even though a Section 8 application has been filed and the issue remains pending before the judicial authority.
This provision prevents the mere pendency of the reference application from automatically stopping the arbitral process.
Jammu and Kashmir and Ladakh Adaptations
Section 8A - Mediation or Conciliation in Petitions Under Sections 9 or 11
For the Union Territories of Jammu and Kashmir and Ladakh, the adaptation orders inserted Section 8A. Where a petition under Section 9 or Section 11 is pending and the Court considers that elements of settlement exist, the Court may, with the consent of the parties, refer the dispute to mediation or conciliation.
Where mediation succeeds, the mediated settlement is forwarded to the referral Court. The Court is required to apply its judicial mind and satisfy itself that the settlement is genuine, lawful and voluntary, and is not affected by coercion, undue influence, fraud or misrepresentation. The Court may thereafter pass an order in terms of the settlement.
The adapted provision further states that such a mediated settlement has the same status and effect as an arbitral award and may be enforced in the manner specified under Section 36.
Section 8B - Mediation or Conciliation in Proceedings Under Sections 34 or 37
The adaptation orders also inserted Section 8B. During the pendency of a petition under Section 34 or an appeal under Section 37, the Court may, with the consent of the parties, refer the dispute to mediation or conciliation where it appears that elements of settlement exist.
If mediation succeeds and the statutory safeguards are satisfied, the Court may pass an order in terms of the settlement. The adapted provision states that the mediated settlement shall have the status of a modified arbitral award and may be enforced under Section 36.
Adaptation references: Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Order, 2020, notification No. S.O. 1123(E), dated 18-3-2020, and Union Territory of Ladakh Reorganisation (Adaptation of Central Laws) Order, 2020, notification No. S.O. 3774(E), dated 23-10-2020.
Relationship With Section 7
Section 8 operates on the basis that an arbitration agreement exists. The meaning and statutory requirements of an arbitration agreement are contained in Section 7 of the Arbitration and Conciliation Act, 1996.
Accordingly, questions concerning the form, writing requirement, electronic communications or incorporation of an arbitration clause may need to be examined under Section 7 when a reference under Section 8 is sought.
Official Source
India Code is the Government of India's official digital repository for Central legislation and related legal materials. The Arbitration and Conciliation Act, 1996 is Act No. 26 of 1996.
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