In a Summary Suit filed by the counter-party against the client wherein the debt/liability in respect of the principal amount was admitted, Parinam filed an application under Section 8 of the Arbitration and Conciliation Act 1996, praying that the matter be referred to arbitration in light of the arbitration clause contained in the contract between the parties. The counter-party objected to the application on the ground that since the liability is admitted, there is no dispute that is referable to arbitration. We countered the said objection on the ground that though the principle is admitted, the interest component is disputed, which gives rise to an arbitrable dispute. The Hon’ble Bombay High Court was pleased to refer the matter to arbitration, by holding that even in case of admitted liability, if the interest component is disputed, the same shall be referred to arbitration.
