Report No. 176
2.5.2 Hence a new section 8A is proposed to be added as follows:
"8A Parties in pending legal proceedings may agree to seek arbitration Where at any stage of a legal proceeding in the Supreme Court or the High Court or in the principal Civil Court of original jurisdiction in a district or in the court of the principal judge of the City Civil Court of original jurisdiction in a city or any Court of coordinate jurisdiction or inferior in grade to such Principal courts, as the case may be, all the parties enter into an arbitration agreement to resolve their disputes, then the Court in which the said legal proceeding is pending shall, on an application made by any party to the arbitration agreement, refer the disputes in relation to the subject matter of the legal proceeding to arbitration.
Explanation: For the purposes of this section, "legal proceeding" means any proceeding involving civil rights of parties pending in the courts mentioned in this section, whether at the stage of institution or at the stage of appeal or revision and includes proceedings involving civil rights instituted in the High Courts under article 226 and 227 of the Constitution of India or on further appeal, if any, to the Supreme Court."
2.5.3 In view of the proposed section 8A, a special provision is proposed to be made in Section 42 (4) and two exceptions, as discussed later. (see para 2.30.4 and 2.30.6).