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Once the right to refer the dispute to Arbitration is waived by a party, it cannot be reclaimed: Karnataka High Court.

This particular decision is held by the High Court Of Karnataka through the single bench of Justice Sachin Shankar Magadum in the case of Y Harish and Anr. versus Y Satish and Ors.

Facts

Y Harish has to pay a certain sum of money Rs. 7,34,12,647/- to the Y Sathish.Y Sathish issued a legal  notice invoking the arbitration agreement between the parties.both the parties and having examined the material has rejected the 

application.Judge while rejecting the application has taken judicial note of the reply notice issued by the present petitioners herein. Having examined the reply notice, the learned Judge was of the view that the petitioners having objected for appointment of proposed sole Arbitrator on the ground that dispute does not fall within the arbitration clause, now cannot turn around and say that the present suit is not maintainable the present petitioners have waived off their rights and therefore, they cannot insist.

Orders and Judgements

The Court ruled that Section 8 of the A&C Act requires a formal, independent and specific application, made before or at the time of filing of written statement, seeking reference of the dispute to arbitration the petitioner had not invoked Section 8 of the A&C Act and that he had only filed an application under Order 7 Rule 11(d) of the CPC seeking rejection of the plaint filed by the respondent on the ground that it was barred by law.

The petitioner, by issuing the reply notice, had disputed the existence of the arbitration agreement with respect to the disputes raised by the respondent. Therefore, the Court ruled that it can be inferred that the petitioner had waived its right to have the dispute resolved by arbitration.The Court held that in view of the stand taken by the petitioner in his reply notice, the petitioner cannot be permitted to contend that the arbitral proceedings have already commenced and that the suit filed by the respondent was barred by law.

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Judgement reviewed by- Mohammed Shoaib

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