Formalism under Section 8 of Arbitration Act wins the day in Delhi High Court

First published on IndiaCorpLaw Blog

In Arti Jethani v. Daeshan Trading (India) Pvt. Ltd. (decision dated 16.05.2011), the Delhi High Court held that a Section 8 application under the Arbitration & Conciliation Act, 1996 (Arbitration Act) was not maintainable if brought after the filing of written statement, even if the written statement raised jurisdictional objections on grounds of existence of an arbitration agreement. While there is authority to support this conclusion, it suggests a formalistic bias in the court’s approach to interpretation. An extremely formalistic approach to interpretation of the Arbitration Act, defeating an arbitration agreement, is the very anti-thesis of the policy that led to the new law in 1996. This decision also fails to take into account the negative effect of an arbitration agreement.

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