Cannot refer a dispute to arbitration unless there is clear denial of a right: Kerala HC

CLAIM DISMISSED

- PRANSHI AGARWAL

The Kerala High Court in the case Southern Railway v. M/s Cherian Varkey Construction Co.Pvt Ltd observed and stated that the cause of action giving a party the right to refer a dispute to arbitration only accrues when there is a clear and unambiguous denial of a right by one party by the other.

The Division bench comprising of Justice P.B. Suresh Kumar and Justice C.S Sudha observed and dismissed the petition filled by Southern Railway challenging the decision of the Additional District Court.

The bench observed that since a dispute entails a positive element, a mere inaction to pay does not lead to the inference that a dispute exists and for reference of a dispute to arbitration, there is no right to apply, until there is a clear and unequivocal denial of the right asserted by one party by the other.

In the present case, the respondent is a contractor who was awarded certain work from the appellant Southern Railway for the construction of an overbridge.