Law: Arbitration Act, 1940

Section: 32,33

Law: Arbitration Act, 1940

Section: 32,33

Law: Civil Procedure Code (V of 1908)

Section: 9

(a) Arbitration Act (X of 1940)-------Ss. 32 & 33---Civil Procedure Code (V of 1908), S.9---Scope and extent of application of Ss.32 & 33 of the Arbitration Act, 1940---Jurisdiction of civil court---Scope---Suit with the prayer to restrain the defendants from seeking remedy by way of arbitration and in alternate to declare that no binding contract had been concluded between the parties---Maintainability---Contentions of the plaintiff were that defendants having failed to submit an acceptable performance bond/bank guarantee, the plaintiff was within its right to recall the conditional acceptance communicated to defendants; that threatened arbitration proceedings by the defendants were wholly unauthorised as no final binding contract between the parties had come into existence; that the main agreement was challenged and was under attack wherein the arbitration clause was included and that agreement could not be challenged by way of an application under S.33 of the Arbitration Act, 1940 and that S.32 of the Arbitration Act, 1940 would not bar suit where existence, effect and validity of main contract was challenged wherein arbitration clause was also included----Validity---Section 9, C.P.C. does not bar a suit where the existence, effect or validity of a contract is questioned in which an arbitration clause is also incidentally included---Such a broad contract cannot, as a whole, be challenged under S.33, Arbitration Act, 1940 though the arbitration clause therein had been separately mentioned---Plaintiff, in the present case, having not challenged the contract as a whole the bar contained in S.32, Arbitration Act, 1940 would not come in its way and the suit for relief that no binding contract was concluded between the parties, was maintainable---Principles. In the present case, the prayer clause shows that the plaintiff has challenged the entire contract which includes the arbitration clause also on the plea that no binding contract having been concluded between the parties. Section 32 of the Arbitration Act, 1940, bars suit contesting arbitration agreement. Section 32 of the said Act has a limited application and deals with the existence, effect or…

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