In Brief
A partnership agreement dated 2005 contained an arbitration clause referencing the Indian Arbitration Act, 1940, even though the 1996 Act was already in force. When disputes arose and the appellant invoked arbitration under Section 8 of the 1996 Act, the trial court and High Court rejected the claim, treating the reference to the 1940 Act as a fundamental mistake that invalidated the arbitration clause. The Supreme Court held that an incorrect reference to the 1940 Act does not invalidate an arbitration agreement; provided it satisfies Section 7 of the 1996 Act (a written agreement to submit disputes to arbitration), the 1996 Act governs. The Court stressed that courts should promote alternative dispute resolution and not deny parties' intent to arbitrate based on outdated statutory references.
The lawyer headnote and full judgment text are available to registered users.