Arbitration Agreement and The Court

The court, under section 8 of the Act of 1996, is obliged to refer the parties to arbitration if seized with the claim on the same subject matter unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed, if a party so applies with the original arbitration agreement or certified copies thereof, not later than when submitting his first statement on the substance of the dispute. While the issue is pending before the court under sub-sections (1) and (2) of section 8 of the Act, the arbitral proceedings under section 8(3) may nevertheless be commenced or continued and an award may be made.

Almost a similar situation existed under the Arbitration Act, 1940 Act which provided that the judicial authority may make an order staying any legal proceedings pending before it against a party, on an application by that party to stay the said proceedings, if the said judicial authority is satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement between the parties and the applicant is ready and willing to do the things necessary for the conduct of arbitration.