The Supreme Court today said trial courts should not invoke its jurisdiction under general law in cases where the parties have entered into an agreement to resolve the disputes under the special law as such an approach would unnecessarily increase the pendency in courts.
"The general law should yield to the special law - generalia specialibus non derogant. 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," a bench comprising Justices M Y Eqbal and Kurian Joseph said.
The bench made the observations while deciding the issue as to what should be the approach of a civil court when a dispute is placed before it where the parties already have an agreement.
"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, as held by this Court in...," the bench said.
The issue arose when a woman moved the trial court seeking to restrain a finance company from illegally taking away her car from her possession. The car was purchased on loan granted by the finance company.
Complying with the procedure under Section 8 of the Arbitration and Conciliation Act, the finance company filed a plea bringing to the notice of the trial court that in view of the agreement for arbitration between the parties regarding resolution of the disputes, the court did not have jurisdiction to try the case and the parties were to be directed to the process of arbitration in terms of the agreement.
The high court and the trial court, however, had refused the relief. Challenging the high court order, the finance company moved the apex court.
