Only Pre-requisite of Arbitration Agreement is that it should be in Writing- Supreme Court

0
639

November 05, 2018

In this recent case, the Supreme Court has pointed out that arbitration agreement need not be signed in all cases and that the only pre-requisite of a valid arbitration agreement is that it should be in writing.

Case Name: M/S Caravel Shipping Services Pvt. Ltd. v. M/S Premier Sea Foods Exim Pvt. Ltd.

In the case, the issue arose in view of unsigned Bill of Lading on the basis of which the respondent sought to recover the sum of Rs.26,53,593/- from the appellant in the suit filed by it. However, when the appellant raised the argument about an arbitration clause was printed in terms annexed to the Bill of Lading, the respondent alleged that for the purpose of arbitration, the requirement of the Arbitration Act is that the arbitration clause should be signed.

The Two-Judge Bench of the Supreme Court dismissed the argument of the respondent and made the following observations in the case:

The Apex Court made reference to its decision in the case of Jugal Kishore Rameshwardas vs. Mrs. Goolbai Hormusji[1], wherein the Court held that an arbitration agreement needs to be in writing though it need not be signed. It was further pointed out by the Court that the fact that the arbitration agreement shall be in writing is continued in the 1996 Act in Section 7(3) thereof. Section 7(4) only further adds that an arbitration agreement would be found in the circumstances mentioned in the three sub-clauses that make up Section 7(4). This does not mean that in all cases an arbitration agreement needs to be signed. The only pre- requisite is that it be in writing, as has been pointed out in Section 7(3).

Hence, in the present case, the Court held that the reference in the Bill of Lading is such as to make the arbitration clause part of the contract between the parties.

The entire case can be accessed here.

Related Posts

Law of Arbitration in India: In a Nutshell

Limited Scope of Judicial Intervention under Arbitration Act

SC on whether Arbitration Agreement can be Binding on Non-Signatory to the Agreement

SC: Arbitration Clause Does not Bar Filing of Complaint with Consumer Forum

 

[1] AIR 1955 SC 812