Supreme Court of India
H. SRINIVAS PAI & ANR.versusH.V. PAI (D) THR. LRS. & ORS.
- Citation
- 2010 INSC 400
- Decided
- 9 July 2010
- Disposal
- Disposed off
Holding
The Arbitration and Conciliation Act, 1996 applies to civil disputes as well as commercial ones, but the dismissal of the Section 8 application stands because the earlier Section 34 order had become final.
Summary
In a suit for partition of joint family property filed in 1991, the appellants sought a stay of proceedings under Section 34 of the Arbitration Act, 1940, which was dismissed in 1995 and affirmed on appeal. The suit continued, and the appellants later filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, which was also dismissed by the trial court and the Karnataka High Court, the latter observing that the 1996 Act applies only to commercial or international commercial disputes and not to civil disputes. The appellants challenged this observation before the Supreme Court. The Court held that the Arbitration and Conciliation Act, 1996 applies to all arbitrations, irrespective of whether the underlying dispute is civil or commercial, and that the existence of an arbitration agreement determines arbitability. However, the Court affirmed that the earlier dismissal of the Section 34 application had become final, and therefore the subsequent Section 8 application could rightly be rejected. The High Court’s observation that the Act does not apply to civil disputes was set aside, while the dismissal of the Section 8 application was upheld, and the trial court was directed to dispose of the partition suit within three months.
Issues considered
- What is the scope of applicability of the Arbitration and Conciliation Act, 1996 – does it extend to civil disputes?
- Can an application under Section 8 of the Arbitration and Conciliation Act, 1996 be entertained after a final order under Section 34 of the Arbitration Act, 1940 has been rendered?
Legislation cited
- Arbitration Act, 1940s. 34
- Arbitration and Conciliation Act, 1996s. 1(2), s. 8
Subjects
ArbitrationArbitration and Conciliation Act 1996Civil disputeCommercial disputeSection 8Section 34ApplicabilityArbitabilityPartition suit
Judgment
[2010] 8 S.C.R. 413
H. SRINIVAS PAI & ANR. A
v.
H.V. PAI (D) THR. LRS. & ORS.
(Civil appeal No. 5220-5221 of 2010)
JULY 9, 2010
B
[R.V. RAVEENDRAN AND H.L. GOKH~LE, JJ.)
Arbitration Act, 1940:
s.34 - Application for stay of proceedings in a civil suit c
- Rejected - Order upheld in appeal and revision - Thereafter
application uls 8 of Arbitration and Conciliation Act, 1996 filed
- Application dismissed by trial court as also by High Court
- However, High Court observing that the 1996 Act has got
application to commercial matters and international 0
commercial matters and the suit relating to partition of joint
family properties, would not attract provisions of the Act -
HELD: Order dismissing application uls 34 having become
final, High Court and trial court rightly negatived the attempt
of appellants by filing the application uls 8 of the 1996 Act - E
However, the observation of the High Court in para 4 of its
judgment that the 1996 Act will not apply to civil disputes is
set aside - Arbitration and Conciliation Act, 1996 - s. 8.
Arbitration and Conciliation Act, 1996:
F
Applicability of the Act - HELD: There is no basis to hold
that the Act will not apply to 'civil disputes'. but will apply only
to 'commercial disputes' or 'international commercial disputes'
- The Act applies to domestic arbitrations, international
commercial arbitrations and conciliations - The applicability G
of the Act does not depend upon the dispute being a
commercial dispute - Reference to arbitration and arbitability
depends upon the existence of an arbitration agreement, and
not upon the question whether it is a civil dispute or
413 H
414 SUPREME COURT REPORTS [2010] 8 S.C.R.
A commercial dispute - There can be arbitration agreements
in non-commercial civil disputes also - Arbitration Act, 1940
- s.34.
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
B 5220-21 of 2010.
From the Judgment & Order dated 03.11.2008 of the High
Court of Karnataka in CRP No. 1710 of 2003 and final
Judgment and Order dated 17.04.2009 in Review Petition No.
448 of 2008 in CRP No. 1710 of 2003.
c
Sampat Anand Shetty, Rameshwar Prasad
Chandrashekar for the Appellants.
G.V. Chandrashekar, N.K. Verma, Anjana Chandrashekar
for the Respondents.
0
The following order of the Court was delivered
ORDER
1. Leave granted. Heard the counsel.
E
2. The first respondent filed a suit for partition in the year
1991. In the said suit, the appellant filed an application for stay
of proceedings under Section 34 of the Arbitration Act, 1940
('old Act' for short). The said application under Section 34 was
F dismissed on 15.3.1995 on the ground that the appellant had
acquiesced to court's jurisdiction. The appeal filed by the
appellants, as also a further revision by them, were dismissed
in 2000 and 2001.
G 3. The suit, however, continued to be pending and the
appellants thought fit to file an application under Section 8 of
the Arbitration and Conciliation Act, 1996 ('Act', for short). That
application was dismissed by the trial Court by order dated
29.3.2003. Feeling aggrieved, the appellants filed a revision
which was referred by a learned single Judge of the High Court
H
H. SRINIVAS PAI & ANR. v. H.V. PAI (D) THR. LRS. & 415
ORS.
to a Division Bench. The Division bench, by order dated A
3.11.2008, dismissed the application under Section 8 of the
Act but while so doing, observed thus:
"In view of Section 1 (2) of the Act, the said Act has got
application in respect of commercial agreement matters 8
and international commercial matters. The right claimed by
the respondent in the original suit for partition of the joint
family properties, is a civil dispute, which does not attract
the provisions of the Act."
The appellants filed a review petition which was dismissed on C
17.4.2009. The said orders dated 3.11.2008 and 17.4.2009
are challenged in this appeal by special leave.
4. This court while issuing notice granted stay of the said
observation and made it clear that there shall be no stay of the D
suit and that the suit shall proceed expeditiously as it has been
pending for 18 years.
5. There is absolutely no basis for the observation of the
High Court that Arbitration and Conciliation Act, 1996 will not
apply to 'civil disputes', but will apply only to 'commercial E
disputes' or international commercial disputes. The Act applies
to domestic arbitrations, international commercial arbitrations
and conciliations. The applicability of the Act does not depend
upon the dispute being a commercial dispute. Reference to
arbitration and arbitability depends upon the existence of an F
arbitration agreement, and not upon the question whether it is
a civil dispute or commercial dispute. There can be arbitration
agreements in non-commercial civil dispµtes also.
6. However, the said observation of the High Court does· G
not, in any way, affect the correctness of the said order passed
by the High Court. As already noticed, the application under
Section 34 of the old Act was dismissed in the year 1995 and
affirmed in appeal in 2000 and by the High Court in 2001 and
attained finality. The subsequent attempt of the appellants by H
416 SUPREME COURT .REPORTS [2010] 8 S.C.R.
A filing an application under Section 8 of the Act has been rightly
negatived by the trial Court and by the High Court.
7. In view of the above, we dispose of these appeals
without disturbing the dismissal of the revision by the High
Court. We, however, set aside the observation of the High Court
8
in paragraph 4 of its Judgment (extracted in para 3 above)
holding that the Act will not apply to 'civil disputes'. We request
the trial Court to dispose of the suit expeditiously not later than
three months from today.
C R.P. Appeals disposed of.
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