Answer ... Under Sections 8, 45, and 54 of the Arbitration Act, if a dispute is arbitrable and relates to a matter covered by a valid arbitration agreement, and a party nonetheless approaches the court, then the court is mandated to refer the parties to arbitration. Further, as observed by the Supreme Court of India in P Anand Gajapathi Raju v PVG Raju (Dead) (2000 (4) SCC 539), the language of Section 8 is peremptory in nature; and in cases where there is an arbitration agreement, it is obligatory for the court to refer the parties to arbitration - nothing remains to be decided in the original action after such an application is made, except to refer the dispute to an arbitrator.

However, it is only when one party exercises the right to arbitrate that the court will make the parties abide by their contract and refer them to arbitration. The failure of a party to exercise this right will lead to the inference of an agreement to supersede or abandon the terms of the agreement. The court will then adjudicate upon the dispute. It does not enjoy suo moto power of reference to arbitration. If the court does not have jurisdiction over the dispute, notwithstanding the agreement to arbitrate, it is still bound to refer the parties to arbitration and cannot direct the plaintiff to approach the appropriate authority.

Answer ... As per the Arbitration Act, the courts have the following limited powers in relation to arbitration proceedings seated in India:

• to refer the parties to arbitration under Section 8;
• to pass interim orders under Section 9;
• to appoint arbitrators under Section 11;
• to terminate the mandate of an arbitrator and replace the arbitrator, in certain cases;
• to assist the tribunal in the taking of evidence under Section 27;
• to set aside an award on the limited grounds provided under Section 34;
• to enforce awards under Section 36; and
• to hear appeals under Section 37 against orders passed under Sections 8, 9, 16, 17, and 34.

In addition, in the case of foreign awards, the courts have the following limited powers under the act:

• to refer the parties to arbitration under Sections 45 and 54;
• to pass interim orders under Section 9, in the absence of agreement to the contrary;
• to appoint arbitrators under Section 11;
• to assist as per Section 27, in the absence of agreement to the contrary;
• to hear appeals as per Section 37(1)(a) and Section 37(3), in the absence of agreement to the contrary;
• to refuse enforcement of a foreign award under Sections 48 and 57;
• to enforce a foreign award under Sections 49 and 58; and
• to hear appeals under Sections 50 and 59 against orders passed under Sections 45, 48, 54 and 57.

Answer ... It is settled law that a contract that is contrary to the statute is void. However, in the case of arbitration, the parties have a supreme power with respect to certain issues and can thus restrict the powers of the court in this regard (eg, Section 2(2) of the Arbitration Act).