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A Party Can Withdraw Its Consent For Reference To Arbitration Under Section 89 Of The CPC Anytime Before The Court Acts Upon Such Consent: Gujarat High Court
Ausaf Ayyub
22 July 2022 3:00 AM GMT
The Gujarat High Court has held that a party can withdraw its consent for reference to arbitration under Section 89 of CPC anytime before the court has acted upon such a reference. The Bench of Justice Umesh A. Trivedi was dealing with a Special Civil Application under Article 227 against an order of the Civil Judge whereby the application jointly given by the parties to the...
The Gujarat High Court has held that a party can withdraw its consent for reference to arbitration under Section 89 of CPC anytime before the court has acted upon such a reference.
The Bench of Justice Umesh A. Trivedi was dealing with a Special Civil Application under Article 227 against an order of the Civil Judge whereby the application jointly given by the parties to the proceedings to refer the dispute to the Arbitrator under Section 89(2)(a) of the Code of Civil Procedure, 1908 (hereinafter referred to as 'the Code') came to be rejected on the original plaintiff, who initially consented for the same, withdrew the consent for sending it to the Arbitrator.
The petitioner contended that both the parties consented to send the dispute to the arbitrator under Section 89 of CPC, therefore, the Court could not reject the application on the mere ground that the respondent withdrew its consent.
It further contended that once the respondent had agreed to the appointment of an arbitrator and after the filing of an application under Section 89, he cannot withdraw from the arbitration in view of Section 4 of the A&C Act.
The Court rejected the argument of the petitioner and held that merely because a party had initially agreed to have the matter referred to arbitrator cannot be presumed to have submitted to the jurisdiction of the arbitrator and it is well within its right to withdraw its consent anytime before the court takes up the matter and refers the parties.
The Court held that reference to Section 4 of the Act read with Section 89 of the Code is misconceived. The Court held that Section 4 of the Act that provides for a deemed waiver would only apply when the parties have an arbitration agreement and it cannot be applied when a reference is being made under Section 89 of the Code.
Accordingly, the Court dismissed the petition.
Case Title: Krishna Calibration Services v. Jasmin Bharat Patel, R/Special Civil Application No. 5682 of 2021.
Citation: 2022 LiveLaw (Guj) 281
Date: 19.07.2022
Counsel for the Petitioner: Paras K. Sukhwani
Counsel for the Respondent: N/A
