Arbitration clause does not bar civil court jurisdiction unless Section 8 plea filed on time: Delhi High Court

The Delhi High Court has clarified that the mere presence of an arbitration clause in an agreement does not automatically strip a civil court of its jurisdiction. A party seeking to enforce an arbitration agreement and refer a dispute to arbitration must file a plea under Section 8 of the Arbitration and Conciliation Act at the earliest opportunity, specifically no later than the date of submitting their first statement on the substance of the dispute. If this plea is not raised within the stipulated timeframe, the civil court retains jurisdiction to adjudicate the matter. This ruling is crucial for civil litigation, emphasizing that procedural diligence is paramount for parties wishing to invoke arbitration. It prevents parties from indefinitely holding back an arbitration objection, thereby ensuring expeditious resolution of disputes either through the courts or via arbitration, based on timely invocation of the relevant legal provisions.