Best Court Case Filed Despite an Arbitration Clause? Send It to Arbitration Lawyer

If someone has sued you in court even though your contract with them says disputes will go to arbitration, you can ask the court to send the case to arbitration. Under Section 8 of the Arbitration Act, the court must refer the parties to arbitration if you apply in time and a valid arbitration agreement exists, unless it finds that, on a first look, there is no valid agreement. The suit then ends, and the dispute is decided by an arbitrator.

This page is for defendants who have received summons in a civil or commercial suit covered by an arbitration clause, and for plaintiffs whose suits face such applications. In short: the application must be filed no later than your first statement on the substance of the dispute, which usually means with or before your written statement; you must attach the original arbitration agreement or a certified copy; and the court looks only at whether a valid agreement exists, leaving everything else to the arbitrator.

Timing is everything. If you file your written statement defending the suit without making the application, you may lose the right to insist on arbitration.

Is this your situation?

What the court looks at

The timing rule, explained

Section 8(1) requires the application to be made "not later than the date of submitting his first statement on the substance of the dispute". In practice, this usually means the written statement. If the defendant files a written statement that defends the suit on the merits without applying under Section 8, it is generally taken to have submitted to the court's jurisdiction and given up the right to arbitration.

Courts have held that some filings before the written statement do not count as a "first statement on the substance". An application for extension of time, an appearance, a reply to an interim application limited to the urgency, or an objection to jurisdiction on other grounds may not be a statement on the substance. But a detailed reply to an injunction application that argues the merits might be. To be safe, file the Section 8 application at the very first opportunity, before or with any document that addresses the merits, and say expressly in any earlier filings that you reserve your right to seek reference to arbitration.

In commercial suits, the written statement must be filed within 30 days, extendable to 120 days at most. A Section 8 application does not automatically extend that time, so file it early and seek directions on the written statement if needed.

How a Section 8 application works

Time and typical cost range

Our fees are agreed in writing at the start, stage by stage, and are not linked to the outcome.

Documents needed

When Section 8 applies, and when it does not

Mixed suits: some parties or claims outside the clause

Suits often include parties who are not bound by the arbitration clause, such as guarantors who signed separate deeds, directors, or group companies, or claims under related contracts without a clause. The 2015 amendment widened Section 8 to allow "a party to the arbitration agreement or any person claiming through or under him" to apply, and the Supreme Court in Cox and Kings v SAP India (2023) recognised that non-signatory group companies can in some cases be bound.

Where some parties or claims are clearly outside the clause, courts have taken different approaches: referring the parties bound by the clause to arbitration and keeping the rest in court, or staying the court proceedings until the arbitration is decided. In Vidya Drolia (2020), the Supreme Court indicated that courts should refer matters where the agreement exists and leave complex questions of who is bound to the tribunal, unless the answer is clear. Plan the application so that it asks for the most practical outcome on your facts.

Injunction suits filed to avoid arbitration

Sometimes a party files a suit for an injunction, for example to restrain the encashment of a bank guarantee or a termination, rather than starting arbitration and applying under Section 9. The defendant can apply under Section 8 to refer the dispute to arbitration. The court can still deal with urgent interim relief while the application is pending, and after reference, the parties can seek interim measures under Section 9 or from the tribunal under Section 17.

If you are the plaintiff and urgent relief is genuinely needed, the better course is usually to file under Section 9 in the court of the seat, and start the arbitration within 90 days, rather than filing a suit that will be referred to arbitration anyway.

Laws that apply

How we work

We are a litigation and advisory practice led by Advocate BK Singh, with offices in Dwarka (New Delhi) and Vaishali (Ghaziabad). This is what you can expect:

• Fast action on summons: the application filed before any statement on the merits.
• Careful replies to interim applications: without waiving arbitration.
• Complete documents: original or certified agreement attached.
• Planning for mixed suits: parties and claims mapped to the right forum.
• Written fee terms: agreed stage by stage, never linked to the outcome.

Mistakes with Section 8

Arbitration clauses in purchase orders and standard terms

Many disputes turn on whether the arbitration clause was part of the contract at all. Purchase orders often say "subject to our general terms and conditions", which may contain an arbitration clause on a website or annexure. Section 7(5) says a reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make the clause part of the contract.

Courts look at whether the reference is specific enough. A general reference to terms of another contract between different parties may not incorporate the arbitration clause; a specific reference to the party's own standard terms, which the other side accepted, usually does. In a Section 8 application, attach the purchase order, the standard terms and evidence of acceptance, such as earlier orders on the same terms or an acknowledgement.

MSME suppliers and Section 8

If the plaintiff is a registered micro or small enterprise suing for delayed payment, the interaction between Section 8 and the MSMED Act can be complicated. The supplier could have gone to the MSME council, which overrides the contract's arbitration clause under Mahakali Foods (2022). If the supplier instead files a suit, and the buyer applies under Section 8, courts have generally referred the dispute to arbitration under the contract's clause, because the council route is optional for the supplier, not compulsory.

Equally, if a buyer has already started arbitration under the contract, a supplier can sometimes still approach the council, and the council's process may take precedence for delayed payment claims. These situations need careful handling to avoid parallel proceedings.

Commercial suits and the 120-day limit

In commercial suits, Order VIII Rule 1 of the CPC, as amended, requires the written statement within 30 days of service, with a maximum extension to 120 days for recorded reasons and costs. After 120 days, the right to file the written statement is forfeited. A Section 8 application does not automatically stop this clock.

If you file a Section 8 application and the court has not decided it as the 120-day limit approaches, ask the court for directions. Some courts defer the written statement until the Section 8 application is decided; others expect it within time. If you must file a written statement, file it expressly without prejudice to the Section 8 application, and state that it is filed only to comply with the time limit. Courts have generally accepted that this does not waive the application, provided the Section 8 application was filed first.

For plaintiffs: resisting a Section 8 application

If you are the plaintiff and the defendant applies under Section 8, check whether the application was made in time, whether the original or certified agreement was attached, and whether the agreement is really an arbitration agreement covering the dispute. A clause that uses "may" with a requirement of further consent, as in Nagreeka Indcon (2026), may not be binding. A dispute under a different contract, or a claim against a non-signatory, may fall outside it. A subject that is not arbitrable, such as a rent-controlled tenancy, cannot be referred.

If the defendant has already filed a written statement on the merits, or replied to an interim application in a way that addressed the merits, argue that it has submitted to the court's jurisdiction. If the court refers the dispute despite your objections, you cannot appeal that order, but you can raise jurisdiction objections before the tribunal under Section 16.

Section 45: foreign-seated arbitrations

Where the arbitration is seated abroad and governed by the New York Convention, the application to refer the parties is under Section 45, not Section 8. The court must refer the parties to arbitration unless it finds, on a first look, that the agreement is null and void, inoperative or incapable of being performed. The 2019 amendment introduced the "first look" standard for Section 45 as well.

There is no strict time limit in Section 45 equivalent to Section 8's "first statement on the substance" rule, but a party that participates in the suit on the merits risks being treated as having waived arbitration. Apply early. See international arbitration.

After reference: starting the arbitration

Once the court refers the parties, the suit ends, but the arbitration does not start by itself. Either party must invoke arbitration under the clause by sending a Section 21 notice, if it has not already been done. Limitation for the claim is protected under Section 43(3) and (4) in some cases, and courts have held that the time spent in a suit filed in good faith can be excluded under Section 14 of the Limitation Act. Still, act promptly.

If the plaintiff had obtained interim orders in the suit, they may lapse with the suit. Parties needing continued protection should apply under Section 9 to the court of the seat, or to the tribunal under Section 17 once it is constituted.