“Once there is an agreement between the parties to refer the disputes or differences arising out of the agreement to Arbitration, and in case either party, ignoring the terms of the agreement, approaches the Civil Court and the other party, in terms of the Section 8 of The Arbitration Act, moves the Court for referring the parties to Arbitration before the first statement on the substance of the dispute is filed, in view of the peremptory language of Section 8 of The Arbitration Act, it is obligatory for the Court to refer the parties to Arbitration in terms of the agreement.
Once an application in due compliance of Section 8 of The Arbitration Act is filed, the approach of the Civil Court should be not to see whether the Court has jurisdiction. It should be to see whether its jurisdiction has been ousted. There is a lot of difference between the two approaches. Once it is brought to the notice of the Court that its jurisdiction has been taken away in terms of the procedure prescribed under a special statue, the Civil Court should first see whether there is ouster of jurisdiction in terms or compliance of the procedure under the special statute. The general law should yield to the special law.
In such a situation, the approach shall not be to see whether there is still jurisdiction in the Civil Court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievance and of course unnecessarily increase the pendency in the Court.”
– Hon’ble Justice Joseph Kurian, M/s. Sundaram Finance Limited v. T. Thankam, [Civil Appeal No. 2079 of 2015].