JUDGMENT
Vikramajit Sen, J.
Page 2708
1. By this Judgment I shall dispose of an application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `the Act’) seeking the appointment of a Presiding Arbitrator, in respect of dispute which has arisen between the Applicants and the Respondent. Briefly stated, the Applicants claim 50 per cent rights over a partnership concern in which the remaining 50 per cent rights vest in the Respondent. Disputes having been arisen between the parties and legal action has been initiated by them.
2. Ironically, the first to issue a notice seeking the appointment of an Arbitrator is the Respondent who addressed a notice to the several Applicants in terms of the communication of Sanjay Kumar Kumar, Advocate dated 3.2.2005. On 27.7.2005 in response to this notice the applicants had conveyed the names of three suggested or proposed Arbitrators. However, in that very month the Respondent filed Suit No. OC 92 of 2005 in the Court of Civil Judge, JR. Division, Islampur, Dist. Uttar Dinajpur. The Applicants herein filed a Written Statement dated November, 2005 in those proceedings. On a cursory perusal of the Written Statement it appears that the Applicants did not either lodge any protest or objection to the maintainability of the suit in view of the Arbitration Agreement between the parties, or pleaded that the parties should be referred to arbitration.
3. This is categorically what Section 8 of the Act envisages. Learned counsel for the Applicants is justified on drawing attention to the fact that the present application under Section 11 of the Act has been filed prior to the filing of that Written Statement. This would no doubt indicate the resolve of the Applicants to have their disputes adjudicated by arbitration. It, however, does not dislodge the responsibility of the Applicants to take appropriate action under Section 8 of the Act especially where it is their say that disputes should be adjudicated through arbitration and not through the normal remedy and procedure of a Civil Court.
4. Chapter I of Part I of the Act contains Section 5 which tilts jurisdiction in favor of arbitration where a compact in this regard has been executed by the parties. However, in the very next succeeding Chapter, Section 8 prescribes that a judicial authority before whom an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. This Section while implementing the purpose of the statute itself, as expressed in Section 5 thereof, specifically envisages the filing of an application under Section 8 if the resolve to arbitrate upon all disputes is to be implemented even by rejection of a civil action. Without entering into legal wrangles of whether Page 2709 a separate application under Section 8 of the Act is required, a categorical plea to this extent must be recorded in the Written Statement itself if that turns out to be the “first statement on the substance of the dispute’`. Learned counsel for the Applicants is not able to draw attention to any averment in the Written Statement filed in Suit No. OC 92 of 2005 in the Court of Civil Judge, JR. Division, Islampur, Dist. Uttar Dinajpur where it has categorically and unequivocally been stated that the Applicant herein, who is the Defendant there, wishes to proceed in arbitration. This lapse is exacerbated in the present case, since the Applicants had already moved the present application.
5. Invoking the jurisdiction of a civil Court is a common law right. It is available to every citizen in the country. Arbitration, however, runs as an exception to that rule, and is attracted only when two parties agree to refer their disputes to arbitration. Such an agreement can also be overridden and given up, which is what appears to have transpired in the present case. As has already been seen it is the Respondent which has fired the first arbitration salvo, in terms of the legal notice dated 3.3.2005. Thereafter for reasons best known to it, it decided not to pursue that line of forensic attack. Although this question does not arise for consideration in these proceedings an action such as filing of a civil suit by a party to arbitration must be construed as that party resolve to override the arbitration clause. The filing of a Written Statement tantamounts to submitting to the jurisdiction of a civil Court despite the existence of an arbitration clause, and similarly articulates its decision to have its disputes decided by a civil Court and not by the Arbitrator. The application is, therefore, clearly not maintainable.
6. In Messrs Raj and Associates v. Videsh Sanchar Nigam Limited 2004 VI AD (DELHI) 201 the Plaintiff desired to traverse the arbitration route after filing a civil action. The attempt was rejected. The same principle will apply to a Defendant. Support was drawn from this passage from Sukanya Holdings (P) Limited v. Jayesh H. Pandya and Anr. :
“For interpretation of Section 8, Section 5 would have no bearing because it only contemplates that in the matters governed by Part I of the Act, the judicial authority shall not intervene except where so provided in the Act. Except Section 8, there is no other provision in the Act that in a pending suit, the dispute is required to be referred to the arbitrator. Further, the matter is not required to be referred to the Arbitral Tribunal, if: (1) the parties to the arbitration agreement have not filed any such application for referring the dispute to the arbitrator; (2) in a pending suit, such application is not filed before submitting first statement on the substance of the dispute; or (3) such application is not accompanied by the original arbitration agreement or duly certified copy thereof. This would, therefore, mean that the Arbitration Act does not oust the jurisdiction of the civil court to decide the dispute in a case where parties to the arbitration agreement do not take appropriate steps as contemplated under sub-sections (1) and (2) of Section 8 of the Act’`.
7. Grievances relating to territorial jurisdiction have also been raised. I cannot help but refer to Section 42 of the Act which endeavors to solve this problem, Page 2710 which states that where any application pursuant to an arbitration agreement has been filed in any Court it is that venue alone which would possess jurisdiction thereafter. Extrapolating the provisions of Section 42 of the Act to the question of territoriality, I am convinced in holding that Courts in New Delhi must make way to Courts in West Bengal where the first legal action has been taken.
8. The application is without merit and is dismissed. However, parties shall bear their respective costs.