Shivani Gadhavi
Published On: January 28, 2022 at 16:54 IST
The Madhya Pradesh High Court on January 27, 2022 passed an Order regarding the concept of ‘Dispute’ under the Arbitration and Conciliation Act of 1996. The Madhya Pradesh High Court was hearing an Arbitration Appeal in relation with Section 9(1)(d) of the Arbitration and Conciliation Act.
The matter is pertaining to when the Appellant in the present Case had issued a Show Cause Notice to the Respondents in regards with Termination of a Deal between the two. The Respondents had replied by refusing the Show Cause Notice which thereby afforded them a personal hearing.
The Respondents in this regard had filed an application in the Commercial Court of Jabalpur under Section 9(1)(d) of the Act. The Appellant had however, not given any final Decision regarding the Termination and thereby stated that due to this there was no ‘Dispute’ between the two parties and hence, the Respondents cannot file an Application under Section 9 (1)(d) of the Act.
Therefore, in light of all the facts, the Appellant filed an Appeal in the Supreme Court against the Order of the Commercial Court of Jabalpur which allowed the Application of the Respondents in regards with Section 9(1)(d) of the Act.
The Supreme Court Bench of Justices Sheel Nagu and Purushaindra Kumar Kaurav stated that “Since the 1996 Act does not define the expression ‘Dispute’, this Court has to fall upon the dictionary meaning of the said expression which is as follows: Black’s Law Dictionary, 5th edition, page 424 defines ‘Dispute’ as: to argue about, to contend … words; an argument; a debate; a quarrel.”
The Bench furthermore stated that “It is evident as daylight that for a Dispute to arise there should exist an Assertion/Claim which is refuted by the other side. Thus, Dispute is a Bilateral Contract where at least two rival parties have disagreement over a particular aspect.”
The Bench while dismissing the Plea of the Appellant stated, “It is vivid that on the IOC issuing a Show Cause Notice and Respondent refuting the same by way of reply and in the personal hearing, Dispute between the rival parties germinated making available cause of action to the Respondent to invoke Section 9 of the 1996 Act.”
Also read: Growing Relevance of Arbitration in India