Explain Section No. 34 of Arbitration Act.

(1) Introduction

Stay of proceedings is that order, which halts further legal process in a trial. Arbitration Act has provided court power to stay legal proceedings where there is arbitration agreement. This power has been provided in Section No. 34 of Arbitration Act. However, some conditions should be fulfilled in order to exercise this power and grant this order. For instance, this section is not applicable when there is no written arbitration agreement.

(2) Section No. 34 Of Arbitration Act

Following points are important for explanation of Section No. 34 of Arbitration Act:

(i) Right of party to legal proceedings

(ii) Power of judicial authority

(iii) Necessary conditions

(1) Right Of Party To Legal Proceedings

First part of this section provides right for any party to arbitration agreement to apply for stay of legal proceedings where there is arbitration agreement. When any party to an arbitration agreement or any person, who claims under him/her, commences any legal proceedings against any other party to this agreement or any person, who claims under him/her, and these legal proceedings are in respect of any matter, which has been agreed to be referred, any party to such legal proceedings can apply to that judicial authority before which these proceedings are pending to stay these proceedings. However, such application should be filed at any time before filing of written statement or taking of any other steps in these proceedings.

(ii) Power Of Judicial Authority

Second part of this section provides power for judicial authority to stay legal proceedings where there is arbitration agreement. If judicial authority is satisfied that there is no sufficient reason why matter should not be referred in accordance with arbitration agreement and if judicial authority is also satisfied that applicant was ready and willing at that time when legal proceedings were commenced and still remains ready and willing to do all those things, which are necessary to proper conduct of arbitration, such authority can make an order to stay these proceedings.

(ii) Necessary Conditions

Following conditions should be fulfilled for granting of order of stay under Section No. 34 of Arbitration Act:

(a) Commencement of legal proceedings

(b) Legal proceedings & matter

(c) Who can be applicant of application for stay?

(d) Institution of application for stay

(e) Satisfaction of judicial authority

(a) Commencement Of Legal Proceedings

It is necessary for exercise of power under this section that any party to arbitration agreement or any person, who claims under him/her, should commence legal proceedings against any other party to this agreement or any person, who claims under him/her.

(b) Legal Proceedings & Matter

It is essential for exercise of power under this section that legal proceedings against which stayed prayed should in respect of any matter, which has been agreed to be referred.

(c) Applicant Of Application For Stay

It is necessary for exercise of power under this section that applicant of application for stay should be any party to legal proceedings or any person, who claims under him/her.

(d) Institution Of Application For Stay

It is essential for exercise of power under this section that application for stay should be filed at any time before filing of written statement or taking of any other steps in these proceedings.

(e) Satisfaction Of Judicial Authority

It is necessary for exercise of power under this section that judicial authority should be satisfied that there is no sufficient reason why matter should not be referred in accordance with arbitration agreement.

(3) Conclusion

To conclude, it can be stated that applicant of application for stay should have been ready and willing at that time when legal proceedings were commenced to do all those things, which are necessary to proper conduct of arbitration. Even he/she should still remain ready and willing for this purpose during legal proceedings.

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