{"id":224355,"date":"2020-01-22T09:30:20","date_gmt":"2020-01-22T04:00:20","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=224355"},"modified":"2020-01-28T11:36:04","modified_gmt":"2020-01-28T06:06:04","slug":"bom-hc-salutary-object-of-arbitration-conciliation-act-cannot-be-defeated-by-adding-a-claim-over-and-above-the-claim-squarely-covered-by-arbitration-agreement","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2020\/01\/22\/bom-hc-salutary-object-of-arbitration-conciliation-act-cannot-be-defeated-by-adding-a-claim-over-and-above-the-claim-squarely-covered-by-arbitration-agreement\/","title":{"rendered":"Bom HC | Salutary object of Arbitration & Conciliation Act cannot be defeated by adding a claim over and above the claim squarely covered by arbitration agreement"},"content":{"rendered":"

Bombay High Court:<\/b> N.J. Jamadar, J., while disposing of an interim application filed by the defendants in a commercial division summary suit, held that the salutary object of the Arbitration and Conciliation Act, 1996,\u00a0<\/span>cannot be defeated by adding a claim over and above the claim in respect of the matter which is squarely covered by arbitration agreement.\u00a0<\/span><\/p>\n

The suit was filed by the plaintiffs for recovery of a sum of over Rs 1. 24 crores on the basis of a memorandum of understating (“MoU”) entered into with the defendants and multiple negotiable instruments issued by the defendants in favour of the plaintiffs. The defendants filed the instant interim application seeking the reference of the dispute to arbitration in view of an arbitration clause in the MoU. The plaintiffs resisted the application averring that there was a series of transactions between them and the defendants. Their claim consisted of two parts, the first part based on cheques issued by the defendants and the second part based on bills of exchange. It was submitted that the arbitration clause in the MoU covered only the first part, whereas the second part was out of its purview.\u00a0<\/span><\/p>\n

Narayan Sahu, counsel for the plaintiffs, submitted that the subject-matter of the suit cannot be bifurcated and, therefore, the application under Section 8 of the Arbitration and Conciliation Act became untenable. While on the other hand, Saurab Oka, counsel for the defendants insisted on allowing their application under Section 8 and refer the dispute for arbitration.\u00a0<\/span><\/p>\n

According to the High Court, the crucial question which wrenches to the fore was: whether the effect and force of the arbitration clause gets diluted on account of inclusion in the suit, of a claim in respect of a dispute which is not governed the arbitration clause?<\/i><\/p>\n

The Court thought it fit to consider the question from the perspective of the legislative object contained in Section 8. Referring to Order 2 Rules 3 and 6 CPC and relying on the Supreme Court decisions in Sundaram Finance Ltd.<\/i> v. T. Thankam<\/i>, (2015) 14 SCC 444<\/a>, it was held by the High Court that if the submission of plaintiff as aforementioned is readily accepted, it has the propensity to give a long leash to the plaintiff to circumvent the arbitration agreement by uniting a cause of action which is beyond the purview of the arbitration agreement. It would have the effect of denuding Section 8 of its force and vigour. Such an interpretation would also derogate from the object which the Arbitration and Conciliation Act, 1996 is intended to achieve: of minimum judicial intervention where parties have agreed to arbitrate the dispute<\/b>.<\/p>\n

In the peculiar facts of the case, the Court referred the dispute to arbitration in respect of the first transaction which was squarely covered by the arbitration clause and exercised its power under Order 2 Rule 6 CPC to direct the plaintiffs to institute a separate suit in respect of the second transaction not covered by the arbitration clause. [Taru Meghani v. Shree Tirupati Greenfield, 2020 SCC OnLine Bom 110<\/b><\/a>, decided on 10-01-2020]\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Bombay High Court: N.J. Jamadar, J., while disposing of an interim application filed by the defendants in a commercial division summary suit, <\/p>\n","protected":false},"author":8808,"featured_media":74381,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[23334,10111,23324,39270,37100],"class_list":["post-224355","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-arbitration-conciliation-act","tag-arbitration-agreement","tag-arbitration-clause","tag-order-2-rule-6-cpc","tag-summary-suit"],"yoast_head":"\nBom HC | Salutary object of Arbitration & Conciliation Act cannot be defeated by adding a claim over and above the claim squarely covered by arbitration agreement | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2020\/01\/22\/bom-hc-salutary-object-of-arbitration-conciliation-act-cannot-be-defeated-by-adding-a-claim-over-and-above-the-claim-squarely-covered-by-arbitration-agreement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bom HC | Salutary object of Arbitration & Conciliation Act cannot be defeated by adding a claim over and above the claim squarely covered by arbitration agreement\" \/>\n<meta property=\"og:description\" content=\"Bombay High Court: N.J. 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The instant petition was filed by the petitioner company under Section 11(6) of the Arbitration and Conciliation Act, 1996 wherein it seeks resolution of disputes with the\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":257179,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/11\/17\/relief-under-s-9-of-the-arbitration-and-conciliation-act\/","url_meta":{"origin":224355,"position":3},"title":"Relief under S. 9 of the Arbitration and Conciliation Act: Can it be granted to a party who is not party to arbitration agreement? Read Utt HC\u2019s ruling","author":"Bhumika Indulia","date":"November 17, 2021","format":false,"excerpt":"Uttaranchal High Court: Emphasizing on the purpose and object of Section 9 of the Arbitration and Conciliation Act, 1996, Division bench of Raghvendra Singh Chauhan, CJ and Alok Kumar Verma, J., held that, A person not a party to an arbitration agreement cannot invoke jurisdiction of the Court for interim\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":44551,"url":"https:\/\/www.scconline.com\/blog\/post\/2016\/04\/21\/all-civil-disputes-are-by-definition-arbitrable-except-those-that-are-specifically-excluded\/","url_meta":{"origin":224355,"position":4},"title":"All civil disputes are, by definition, arbitrable except those that are specifically excluded","author":"Sucheta","date":"April 21, 2016","format":false,"excerpt":"Bombay High Court: The present Notice of Motion is the Defendant No. 1\u2019s Application under Section 8 of the Arbitration and Conciliation Act, 1996, in which the prayer was made in order to refer to Arbitration for resolving all disputes between Plaintiff and Defendant in terms of the Arbitration Agreement\u2026","rel":"","context":"In "Alternate Dispute Resolution"","block_context":{"text":"Alternate Dispute Resolution","link":"https:\/\/www.scconline.com\/blog\/post\/category\/alternate_dispute_resolution\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":244925,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/03\/03\/arbitration\/","url_meta":{"origin":224355,"position":5},"title":"Del HC | What is the scope of Court’s jurisdiction while examining application under S. 8, Arbitration and Conciliation Act. What is effect of ‘Chalk & Cheese’ case of non-arbitrability? HC examines in “Hero” electric bikes dispute","author":"Bhumika Indulia","date":"March 3, 2021","format":false,"excerpt":"Delhi High Court: C. Hari Shankar, J., expressed while addressing a dispute that: \u201cWhere a valid arbitration agreement exists, the decision also underscores the position that, ordinarily, the disputes between the parties ought to be referred to arbitration, and it is only where a clear \u201cchalk and cheese\u201d case of\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/224355","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/8808"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=224355"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/224355\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/74381"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=224355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=224355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=224355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}