A reference to a suit or arbitration in Section 5(6) certainly indicates that dispute is something more than a disagreement or difference of opinion or conflic – Raghuvir Buildcon Private Limited Vs. Ketan Construction Limited – NCLT Ahmedabad Bench
NCLT held that three situations of dispute covered above may be subject matter of a suit or arbitration proceedings. Thus, dispute may have various dimensions/ aspects which may not related to above three situations only. For example, in case of Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited [2017] ibclaw.in 01 SC, breach of term relating to non-disclosure agreement was considered as dispute. Further, disputes relating to situations mentioned in clause (a), (b) and (c) of Section 5(6) may not be in the form of suit of arbitration only as such disputes though existing in reality might not have been referred for such process as yet. However, a reference to a suit or arbitration in Section 5 (6) certainly indicates that dispute is something more than a disagreement or difference of opinion or conflict. Even otherwise every disagreement or conflict may also not reach to the stage of dispute necessarily.
Thus, the parameter to ascertain as to whether there is a dispute or otherwise can be summarized as under:
i) The dispute should have prima facie bona fide and exists naturally in a given fact;
ii) The grounds for alleging the existence of a dispute should not be spurious, hypothetical, illusory or misconceived;
iii) The existence of a dispute need not require further to be proved;
iv) The dispute should be natural and not a made to believe dispute.
