If existence of agreement not disputed, non availability of original agreement immaterial: Allahabad High Court

If existence of agreement not disputed, non availability of original agreement immaterial: Allahabad High Court

If the parties do not dispute the existence of the agreement, an application under Section 8 of the Arbitration and Conciliation Act (A&C Act) cannot be rejected merely because the original agreement or its certified copy was not on record, as held by the Allahabad High Court.

The Court held that Section 8 read with Section 7(4) of the A&C Act leads to the conclusion that requirement of filing the original agreement or its certified copy as provided under Section 8(2) is not mandatory and the judicial authority shall decide the application if the existence of the arbitration agreement is alleged by one party and not denied by the other.

The Court further held that the photo copy of the agreement would suffice the requirement of Section 8(2) of the A&C Act if there is no dispute as to the existence of original agreement between the parties.

The facts of the case are that the parties entered into an agreement dated 06.07.2004 whereby the respondent was appointed as a teacher respondent school. Upon a dispute between the parties, the respondent filed a suit for permanent prohibitory injunction restraining the petitioner from obstructing it from doing his duties in the institution.

It was asserted by the respondent that the parties have an arbitration agreement between themselves, however, the petitioner has failed to appoint an arbitrator despite several requests from it. In that suit, the petitioner filed an application under Section 8 of the A&C Act for referring the dispute to arbitrator. The application was dismissed on the ground that the original agreement or its certified copy is not available on record. Consequently, the petitioner preferred an appeal against the order of trial court, however, the appellate court also dismissed the appeal on the same ground.

Aggrieved by the rejection of the application and the consequent appeal, the petitioner preferred a writ petition.

The Court observed that in terms of Section 7(4)(c) of the A&C Act, an arbitration agreement is in writing if it is contained in an exchange of statements of claim and defence in which existence of the agreement is alleged by one party and not denied by the other, therefore, an arbitration agreement is existing between the parties as the petitioner has asserted the existence and the respondent has not denied such existence.

As a result, it was held that an application under Section 8 of the A&C Act cannot be rejected merely because the original agreement or its certified copy was not on record when the parties do not dispute the existence of the agreement.

Accordingly, the application was allowed and the Court set aside the order of the lower court with a direction to consider the application on its merit.