Section 54: Arbitration and Conciliation Act, 1996
By Nivedita Dhiman
Table of Contents
Introduction of Section 54
Section 54 of the Arbitration and conciliation act provides the framework for appealing a decision which is made by the High court of India regarding the recognition or enforcement of a foreign arbitral award. In order to invoke the provisions of this section, there must not only be an agreement containing a clause agreeing to submit future disputes to arbitration but there must also be, in addition, an actual submission made in pursuance of such agreement after a dispute has arisen.
Section 54 of arbitration and conciliation act
Power of judicial authority to refer parties to arbitration
Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, on being seized of a dispute regarding a contract made between persons to whom section 53 applies and including an arbitration agreement, whether referring to present or future differences, which is valid under that section and capable of being carried into effect, shall refer the parties on the application of either of them or any person claiming through or under him to the decision of the arbitrators and such reference shall not prejudice the competence of the judicial authority in case the agreement or the arbitration cannot proceed or becomes inoperative.
Landmark Judgements of Section 54
Kamini Engg. Corp Ltd vs Societe De Traction Et D’Electricite Societe Anonyme, 1965
The language of the section does not warrant a finding that the submission as mentioned in the section can be made unilaterally or by one group of parties when the other group does not join in the submission. Further, a court is not competent to say any proceedings the subject matter whereof are not agreed to be referred to arbitration by a submission agreed to between the parties.
Raunaq International Ltd vs Ludwig Wunsche & Co, 1986
Where, however a suit is filed with a specific prayer for declaration to the effect that there was no agreement to refer disputes to arbitration, it was clear that there was a challenge to the existence of the arbitration agreement and the court after considering all the documents comes to the conclusion that an arbitration agreement existed, then the court would be bound to dismiss the suit seeking declaration that no arbitration agreement existed and could not order stay of the suit.
W Wood & Sons Ltd vs Bengal Corp, 1959
Where the arbitration clause in a contract for the supply of goods provided for reference of disputes to arbitration according to English law, and one of the parties obtained summary judgements from the court in England on the basis of the bill of exchange accepted by the other party in India for damages for breach of warranty could be stayed.
Conclusion of Section 54
The above-mentioned section states that there is nothing in this clause which precludes the will of the parties being expressed in the instrument whereby the parties agree to refer disputes that may arise in connection with the contract to arbitration.
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