### Averments in an interim application requesting reference to arbitration constitutes substantial compliance with Section 8(2).

The appellant (defendant) challenged an order dated January 9, 2026, which dismissed their application (Master’s Summons) filed under Section 8 of the Arbitration and Conciliation Act, 1996.

The respondent (plaintiff) had filed a suit for damages arising from a loan transaction.

While the plaintiff’s own plaint acknowledged the existence of an arbitration clause in the contract, they argued it was null and void.

The appellant’s application sought dismissal or stay of the suit, asserting the dispute fell under the arbitration agreement, but the prayers in the application did not explicitly use the word "refer".

1. Whether an application seeking dismissal/stay of a suit can be construed as a valid Section 8 application for reference to arbitration if it lacks an explicit prayer for "reference".

2. Whether the appellant sufficiently complied with the requirements of Section 8(2) regarding the submission of the arbitration agreement when the existence of the clause was admitted in the plaint.

The Court primarily applied Section 8 of the Arbitration and Conciliation Act, 1996, which mandates a judicial authority to refer parties to arbitration if an agreement exists.

It relied on the Supreme Court ruling in *K. Mangayarkarasi v. N.J. Sundaresan (2025)*, which established that if an arbitration agreement exists, the civil court’s jurisdiction is ousted and it is under a "positive obligation" to refer the parties to arbitration.

The Court also distinguished *Sharad P. Jagtiani v. M/s. Edelweiss Securities Ltd.*, clarifying that a Section 8 application must be filed prior to or at the time of the first statement of defense.

The Court found that although the appellant’s Master’s Summons was "not happily drafted" and lacked a specific prayer for reference, the averments in the supporting affidavit clearly stated the subject matter was covered by the arbitration clause.

Prayer (c) for a stay of the suit was construed as a request for reference when read with the affidavit.

Regarding Section 8(2), the Court held that since both parties admitted to the existence of the arbitration clause in their respective pleadings (the plaint and the Master's Summons affidavit), there was "substantial compliance" with the requirement to produce the agreement.

The Court emphasized that once an arbitration agreement is admitted and the dispute is covered by it, the court loses jurisdiction and must enforce the legislative mandate to refer the parties to the chosen forum.

The High Court set aside the impugned judgment dated January 9, 2026, and directed that the subject matter of the suit be referred to arbitration in terms of the agreement.

The suit *CS(COM)/801/2024* was ordered to be treated as disposed of.