Certified Copy Sufficient Under Section 8(2) of Arbitration Act; Calcutta HC Sets Aside Trial Court's Refusal for Arbitration Referral

The High Court of Calcutta, in a significant judgment, held that the refusal of the trial court to refer a dispute to arbitration was erroneous, emphasizing the mandatory nature of Section 8 of the Arbitration and Conciliation Act, 1996.

The crux of the judgment pertains to the interpretation of Section 8 of the Arbitration and Conciliation Act, 1996. The petitioner, M/S Fullerton India Credit Company Limited, challenged the jurisdiction of the civil court citing an arbitration clause in the agreement with Ms. Manju Khati, the respondent. The trial court had rejected this application for failure to produce the original or a duly certified copy of the agreement. The High Court, however, found this refusal inappropriate, underscoring the mandatory directive of Section 8 when certain prerequisites are met.

The core issue revolved around the existence of an arbitration agreement and the timely application by a party under Section 8 of the Arbitration Act. The petitioner argued that a certified copy of the agreement, attested by a Notary Public, was provided, meeting the statutory requirements. Conversely, the trial court had rejected this application, leading to the present revisional application under Article 227 of the Constitution.

Justice Prasenjit Biswas, meticulously analyzing the provisions of the Arbitration Act, observed that the conditions under Section 8 were evidently met. The Court referenced several Apex Court judgments, including ‘Sundaram Finance Limited Vs. T. Thankam’, to bolster its reasoning. The Court stressed that once the conditions under Section 8 are satisfied, the Court is left with no discretion but to refer the parties to arbitration.

Mandatory Nature of Section 8: The High Court emphasized that upon the fulfilment of prerequisites under Section 8, the Court must refer the dispute to arbitration, indicating the absence of judicial discretion in such scenarios.

Prima Facie Validity of Arbitration Clause: The Court asserted that a detailed analysis of the agreement’s terms is unnecessary; rather, the focus should be on the prima facie validity of the arbitration clause.

Compliance with Section 8(2): The Court found that the submission of the certified copy of the agreement, duly attested by a Notary Public, satisfied the requirements under Section 8(2) of the Act.

Decision: The Court allowed the revisional application, setting aside the trial court’s order and directing the matter to be referred to an arbitrator within one month.

Date of Decision: April 2, 2024

M/S Fullerton India Credit Company Limited v. Ms. Manju Khati