Kerala State Electricity Board and Anr. vs Kurien E. Kalathil - Supreme Court Important Judgment

 Kerala State Electricity Board and Anr. vs Kurien E. Kalathil - Supreme Court Important Judgment 2018 - 

On 9th March, 2018, in the case of Kerala State Electricity Board and Anr. v. Kurien E. Kalathil and Anr. [Civil Appeal Nos.3164-3165 of 2017], it was held that “jurisdictional precondition for reference to arbitration under Section 7 of the Arbitration and Conciliation Act is that the parties should seek a reference or submission to arbitration.”

It was held that “so far as reference of a dispute to arbitration under Section 89 CPC, the same can be done only when parties agree for settlement of their dispute through arbitration in contradistinction to other methods of alternative dispute resolution mechanism stipulated in Section 89 CPC. Insofar reference of the parties to arbitration, oral consent given by the counsel without a written memo of instructions does not fulfill the requirement under Section 89 CPC. Since referring the parties to arbitration has serious consequences of taking them away from the stream of civil courts and subject them to the rigour of arbitration proceedings, in the absence of arbitration agreement, the court can refer them to arbitration only with written consent of parties either by way of joint memo or joint application; more so, when government or statutory body like the appellantBoard is involved.”