In Brief
A partnership agreement dated 2005, entered after the 1996 Arbitration Act came into force, contained a clause referring disputes to arbitration "in accordance with the provisions of Indian Arbitration Act, 1940." When the respondents filed a suit, the appellant invoked Section 8 of the 1996 Act to refer the dispute to arbitration. The trial court and High Court rejected this, holding that the reference to the defunct 1940 Act invalidated the entire arbitration clause. The Supreme Court held that an arbitration agreement is valid if it meets the Section 7 requirements (parties' agreement to arbitrate, in writing), regardless of any incorrect reference to the old Act. Since no proceedings commenced before 1996, the 1996 Act governs. The Court set aside the High Court judgment and allowed the appeal, directing arbitration under the 1996 Act.
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