Section 8 of The Arbitration Act III

My Lord, Does an application seeking extension of time for filing a written statement, constitute a “first statement on the substance of the dispute” within the meaning of Section 8 of The Arbitration and Conciliation Act, 1996?

No.

“In Rashtriya Ispat Nigam Ltd., (2006) 7 SCC 275 interpreting the expression “first statement on the substance of the dispute”, this Court held: “The expression “first statement on the substance of the dispute” contained in Section 8(1) of the 1996 Act must be contradistinguished with the expression “written statement”. It employs submission of the party to the jurisdiction of the judicial authority. What is, therefore, needed is a finding on the part of the judicial authority that the party has waived its right to invoke the Arbitration Clause. If an application is filed before actually filing the first statement on the substance of the dispute, in our opinion, the party cannot be said to have waived its right or acquiesced itself to the jurisdiction of the Court…”

In Booz Allen and Hamilton Inc. v. SBI Homes Finance Limited, (2011) 5 SCC 532 this Court, has laid down the law as under: “not only filing of the written statement in a suit, but filing of any statement, application, affidavit by a defendant prior to the filing of the written statement will be construed as “submission of a statement on the substance of the dispute”, if by filing such statement/application/affidavit, the defendant shows his intention to submit himself to the jurisdiction of the Court and waives his right to seek reference to Arbitration.”

In view of the law laid down by this Court, as above, we find it difficult to agree that… merely moving an application seeking further time of eight weeks to file the written statement would amount to making the first statement on the substance of the dispute. In our opinion, filing of an application without reply to the allegations of the plaint does not constitute a first statement on the substance of the dispute.”

– Hon’ble Justice Prafulla C. PantGreaves Cotton Ltd. v. United Machinery and Appliances, [Civil Appeal No. 12066 of 2016].

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