ISSUE:
Whether an arbitration act can oust the jurisdiction of the civil courts where parties do not follow Section 8 of the Arbitration and Conciliation Act, 1996 and is there no provision for partly referring the dispute to arbitration under Section 8 of the Act?
RULE:
In a matter that is the subject matter of an arbitration agreement, the Court is required to refer the parties to arbitration. Therefore, the suit should be in respect of a matter which the parties have agreed to refer to and which comes within the ambit of the arbitration agreement. Where, however, a suit is commenced “as to matter” which lies outside the arbitration agreement and is also between some of the parties who are not parties to the arbitration agreement, there is no question of application of Section 8 of the Arbitration and Conciliation Act, 1996.