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Section 8(1) of the Act requires a judicial authority, before which an action is brought in a matter subject to an arbitration agreement, to refer the parties to arbitration if:
A{'text': 'A party to the arbitration agreement applies for reference not later than the date of submitting his first statement on the substance of the dispute, and the authority does not find prima facie that no valid arbitration agreement exists', 'label': 'A'}
B{'text': 'The Supreme Court of India has issued a special direction in respect of the dispute under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law', 'label': 'B'}
C{'text': 'The Reserve Bank of India has issued a special direction in respect of the dispute under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law in force', 'label': 'C'}
D{'text': 'The State Government of the relevant State has issued a special notification in respect of the dispute under any provision of any law in force in any State of India regardless of any other consideration', 'label': 'D'}
Answer & Solution
Correct answer: A. {'text': 'A party to the arbitration agreement applies for reference not later than the date of submitting his first statement on the substance of the dispute, and the authority does not find prima facie that no valid arbitration agreement exists', 'label': 'A'}
1. Section 8(1) of the Act, as reproduced in Lesson 13, has three preconditions:
- A party to the arbitration agreement (or a person claiming through him) **applies for reference**;
- The application is made **not later than the date of submitting his first statement on the substance of the dispute**;
- The judicial authority does **not find prima facie that no valid arbitration agreement exists**.
2. If satisfied, the judicial authority **must** refer the parties to arbitration, notwithstanding any judgement, decree or order of the Supreme Court or any Court.
3. The 2015 Amendment narrowed the court's scrutiny to a prima facie test.
_Source: ICSI CS Executive Paper 1 — Jurisprudence, Interpretation & General Laws, Lesson 13 (Arbitration and Conciliation Act, 1996), pp. 297-303._
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