Law: Arbitration Act, 1940

Section: 34

Arbitration Act (X of 1940)--- ----S. 34---Stay of proceedings---Principles---Arbitration agreement---Suit for recovery of money---Defendants filed application for stay of proceedings and referring the matter to arbitration---Validity---Stay of legal proceedings could be obtained under S.34 of Arbitration Act, 1940, but in order to invoke such provision, it was necessary that there must be an arbitration agreement in existence; legal proceedings must have been started by a party to the agreement; proceedings must be with respect to matter agreed to be referred to arbitration; application for stay must have been filed before filing written statement or taking any step in proceedings; and party asking for stay must be ready and willing to do all things necessary to proper conduct of arbitration-Application under S.34 of Arbitration Act, 1940, could merit rejection, when in the application there was no averment that applicant was ready and willing to have dispute settled through arbitration---No obligation on court to necessarily refer dispute to arbitration but it gave the court discretion to stay proceedings, if it was satisfied that there was no sufficient reason as to why matter should not be referred to in accordance with arbitration proceedings---Legal proceeding which was sought to be stayed must be in respect of matter which parties had agreed to refer and the same was within the terms of arbitration agreement---Before order for staying of suit could be made under S.34 of Arbitration Act, 1940, it must be established that suit had been instituted in respect of matter agreed to be referred---Where suit had commenced as to the matter which was outside the submission, the court was competent to refuse the stay---Court under S.34 of Arbitration Act, 1940, could stay a suit and could also exercise its jurisdiction to entertain the suit for adjudication of claim of parties containing arbitration clause and could also consider whether exercise of such discretion in particular case would be judicious and reasonable---High Court declined to stay proceedings and directed defendants to file written statements---Application was dismissed in circumstances. Mrs. Rubby…

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