Consent To Arbitration Proceedings Can Be Withdrawn By The Parties Before The Court Acts Upon It

Krishna Calibration Services V Jasmin Bharat Patel

On 19.07.2022, the Hon’ble High Court of Gujarat at Ahmedabad pronounced an order in the matter of Krishna Calibration Services V Jasmin Bharat Patel^[1] which ruled that a party may consent to send the dispute for arbitration but before the Court acts upon it and passes any order to refer the same to the Arbitrator, the party is free to withdraw the consent.

In R/Special Civil Application No. 5682 of 2021, the petition was filed under Article 227 of the Constitution of India by challenging the order passed by the lower court. The application was 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 came to be rejected by the original plaintiff, who initially consented to the same but then withdrew consent. 

The petitioner herein has submitted his pleadings that it is clear that an application came to be filed on 20.03.2014 jointly requesting the Court that since there is already an element of the settlement, which is acceptable to the parties, it may be sent to the Arbitrator selected by both the parties. He further submitted that once the original plaintiff has consented to send the dispute between them to the Arbitrator, as stated hereinabove, it has to be sent for Arbitration and no other order could be passed by the Court. He requested that the petition be admitted and allowed. 

After hearing the arguments made by the petitioner herein, the Hon’ble High Court of Gujarat at Ahmedabad has held that: “… even if, before the order could be passed, if any proceedings are initiated, it cannot be said to be an Arbitration proceeding. However, before the court, the original plaintiff withdrew his consent for sending the dispute between the parties to the Arbitrator, which is within his right to dispute the same till the consent is acted upon and the dispute is referred to the Arbitrator by the Court. Thus, a party may consent to send the dispute for Arbitration but before the Court acts upon it and passes any order to refer the same to the Arbitrator, the party is free to withdraw the consent. Thus, there is no illegality found in the impugned order and therefore this petition is rejected. Notice is discharged.”

^[1] 2022 SCC OnLine Guj 871