ANALYSIS OF SECTION 8
Section 8 of the Arbitration and Conciliation Act 1996 is a provision that provides for putting a limit in the intervention of judiciary in the process of arbitration. This amendment of 2015 makes it an obligation for the judicial authority that when an action is brought before it and the matter is of an arbitration agreement the judicial authority will have to refer the parties for the resolution of dispute through arbitration. However it may not refer the parties to arbitration if the arbitration agreement is found to be invalid.
Also, the sub section (2) is amended by the 2015 amendment and it now states that if the party that applying for arbitration does not have the original copy of the arbitration agreement but the other party has the original copy, then the party can reach to the court to make the other party to produce the original agreement.
Furthermore, any order that refuses the reference of the parties to arbitration can be challenged by way of appeal under section 37 of the Arbitration Act. This promotes the use of arbitration as a method of dispute resolution.
The 2015 amendment also provides that parties can be referred to arbitration notwithstanding any order or decree of any court.
Subsection (3) further provides that arbitration proceedings can be carried on even when the matter is pending before the court. It therefore provides for a provision according to which the arbitration proceeding and proceedings at the court can go on at the same time.
Effect of 2015 Amendment to Section 8
The 2015 Amendment therefore made it mandatory for the judicial authorities to refer the parties to a dispute to arbitration unless the court is satisfied that the arbitration agreement between the parties is invalid.
The 2015 Amendment increases the scope of Arbitration by providing that the parties can be referred to arbitration notwithstanding any order or decree of the Supreme Court of India or any other court when the court is of the view that there is valid arbitration agreement between the parties.
The section 8 of the Arbitration Act now is in a form of a command that once the conditions that are mentioned in section 8 are fulfilled it is mandatory for the courts to refer the partier to arbitration.
The intention for the enactment of section 8 is to avoid any conflict between the court and the private tribunals as it refers the party to arbitration as mentioned in the arbitration agreement and makes the agreement effective by not permitting a party to go for a courtroom litigation which would have been in contradiction to the agreement.