If a party fails pursue an application under Section 8(1) of Arbitration and Conciliation Act, 1996 for referring the parties to arbitration within the time available or granted for filing the first statement on the substance of the dispute, including a Written Statement, the party would forfeit its right to apply under Section 8(1) – Assam Petroleum Ltd. and Ors. Vs. China Petroleum Technology Dev. Corp. and Ors. – Delhi High Court
Hon’ble High Court held that:
(i) If a party fails pursue an application under Section 8(1) of the Act,1996 for referring the parties to arbitration within the time available or granted for filing the first statement on the substance of the dispute, including a Written Statement, the party would forfeit its right to apply under Section 8(1) of the A&C Act.
(ii) The parties may have resorted to Section 9 Arbitration & Conciliation Act, but that in itself would not be any embargo on the plaintiff to file a Civil Suit. Section 8 Arbitration & Conciliation Act, 1996 is only an enabling Section which gives an option to the Defendant to either seek referral of Dispute to arbitration in the first instance, before submitting itself to the jurisdiction of the Court.
(iii) The defendant had a right to invoke arbitration at that stage as well as had a right to seek the referral of the disputes to Arbitration under Section 8 Arbitration & Conciliation Act,1996 in the present suit, but he submitted to the jurisdiction of the Court by seeking time to file the written Statement and therefore, his application under Section 8 of the Act, 1996 is held to be without merit as having been abandoned and is hereby, dismissed.