The existence of an arbitration agreement can be inferred from invoices containing an arbitration clause, which parties acted upon without objection, and disputes over its validity are to be resolved by the arbitral tribunal.

JUDGEMENT :

Context and Factual Background:

1. The captioned proceedings entail an Application under Section 11 (“Section 11 Application”) of the Arbitration and Conciliation Act, 1996 (“the Act”), and a Petition filed under Section 9 of the Act (“Section 9 Petition”). The short question that needs consideration is whether the parties have executed an arbitration agreement.

2. The Respondent had availed of services of the Applicant-Petitioner for outdoor advertisements on hoardings. The Applicant-Petitioner makes a claim for outstanding payments owed by the Respondent for such services.

Contentions of the Parties:

3. It is the Applicant-Petitioner’s case that the arbitration agreement is contained in the invoices raised by the Applicant-Petitioner on the Respondent – these invoices were raised during the period between February 2018 and June 2019 (found on pages 41, 49, 55, 60, 66, 73, 79, 84, 87, 91, 94, 96, 99, 102, 107, 110 and 114 of the Application). Each of these invoices contains an arbitration clause. The Applicant-Petitioner submits that invoices have been raised and acted upon because the services have been accepted;monies have been paid on the basis of the invoices (the last payment was received on December 23, 2019, 22 months after the first invoice); tax has been deducted at source on most of the invoices; and each of the invoices bears an endorsement or seal of the Respondent. The Applicant-Petitioner invoked arbitration by a notice dated August 22, 2023.

4. The Respondent objects to such invocation on multiple grounds, summarised below:-

a) the arbitration agreement does not exist, and that an arbitration clause in an invoice cannot constitute an arbitration agreement;

b) for each piece of service provided by the Applicant-Petitioner, a Letter of Confirmation was issued, and that document did not have an arbitration clause;

c) the Letter of Confirmation was followed by provision of services, which was then followed by an invoice, and therefore, an arbitration clause “slipped into” an invoice raised after the services had been provided cannot constitute an arbitration agreement;

d) such a clause would at best be a unilateral reference to arbitration and the parties cannot be said to be ad idem in referring their disputes to arbitration;

e) the invoices have been received by a staff member who need not be considered an authorised signatory;

f) some of the invoices contain an endorsement “Received (not checked)” while other invoices contain an endorsement “Received for Verification” and therefore, the terms and conditions in them could not be said to became binding on the Respondent without examining if the person accepting the invoices is an authorised signatory;

g) the invocation is inadequate and it does not put the Respondent to notice about the precise scope of the dispute sought to be referred to arbitration.

Analysis and Findings:

5. Having considered the material on record and the written submissions filed by the parties, I note that the issues that the Respondent desires to drag the Section 11 Court into considering, entail assessment of evidence to answer mixed questions of fact and law. This is in contrast to the declared law on the scope of this Court’s jurisdiction under Section 11 of the Act.

6. The conduct of the parties evidently shows that there is a prima facie demonstration that advertising services were availed of by the Respondent from the Applicant-Petitioner, which were governed by exchange of correspondence and documentation in a continuum ranging from correspondence to the Letter of Confirmation to the invoices. The services were indeed covered by the invoices. The invoices were accepted and partly paid for, without challenging the arbitration clause in them. Multiple opportunities to question the arbitration clause were available – each time an invoice was raised. Even if the invoices were received subject to verification, they were indeed paid for initially without any protest about the arbitration agree