Report No. 76

8.35. Section 34.-

To preserve a right to arbitration, it is essential that no step should be taken in the suit before an application is made to stay it. Based on this principle, section 34 confers on the court a power to stay legal proceedings where there is an arbitration agreement. There are certain procedural requisites in this regard and stay is to be granted only if the court is satisfied, as to the following two essential ingredients-1

"(i) that there is no sufficient reason why the matter should not be referred in accordance with the agreement, and

(ii) that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration."

1. The numerals indicating the two requirements do not appear in the text of the section but have been added by us for facility of discussion.

8.36. The first requirement obviously confers on the court a discretion not to grant stay if there is sufficient reason why the matter should not be referred to arbitration. The second requirement is based on the principle that the applicant who invokes th.-arbitration clause and claims stay of judicial proceedings on that account must show his readiness and willingness at all material times for the proper conduct of the arbitration proceedings.