Once Right To File Written Statement Is Closed, Section 8 Arbitration Act Application Not Maintainable: Delhi High Court

 

In a recent judgment, the Delhi High Court has clarified an important legal position regarding arbitration proceedings in civil disputes. The Court held that once the right to file a written statement is closed, the defendant cannot later seek reference to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996.

Fact of the case 

In a commercial dispute pending before a civil court, the defendant failed to submit a written statement (WS) within the time frame allowed under the Code of Civil Procedure (CPC). After the deadline passed and the court closed the defendant’s right to file the WS, the defendant filed an application under Section 8 of the Arbitration Act, requesting that the matter be referred to arbitration, citing an arbitration clause in the contract.

 Court’s Reasoning:

The Delhi High Court, while rejecting the application, made it clear that:

• Section 8 of the Arbitration Act allows a party to request reference to arbitration before submitting the first statement on the substance of the dispute.
• Once the right to file the WS is closed due to non-compliance with procedural timelines, it signifies a waiver of the right to arbitration.
• Allowing such applications at a later stage would defeat the purpose of timely adjudication and open the doors to delaying tactics
• Observations:

“Permitting the defendant to invoke arbitration after failing to adhere to procedural deadlines would be contrary to the spirit of the CPC and the Arbitration Act. Such a party cannot take advantage of its own default.”

The Court emphasized the importance of discipline in legal proceedings, especially in commercial disputes where delays can cause significant harm to the parties involved.

This ruling reinforces the principle that:

• Timeliness is critical in legal procedures.
• A party cannot delay proceedings in court and then attempt to shift the matter to arbitration as a fallback.

 Legal Reference:

• Section 8, Arbitration and Conciliation Act, 1996
• Order VIII Rule 1, CPC – which prescribes the timeline for filing written statements.

 Conclusion:

The Delhi High Court's decision sends a strong message: arbitration cannot be used as an afterthought once a party has defaulted in the court process. Litigants must act diligently and responsibly if they wish to preserve their procedural rights.

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