The extension of an arbitration clause, which is in writing, does not require a written reaffirmation if the parties continue to extend the principal agreement orally.

VIBHU BAKHRU, J.

1. The petitioner has filed the present application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the Act’), inter-alia, praying that a Sole Arbitrator be appointed to adjudicate the disputes and claims as raised by the petitioner in terms of the Agreement dated 09.08.2011.

2. Mr. Manish Vashisht, the learned counsel appearing for the petitioner referred to a copy of the Agreement dated 09.08.2011 and also drew the attention of this Court to Clause 14 of the said Agreement (Arbitration Clause). He also referred to the legal notice dated 12.08.2015 whereby the petitioner had called upon the respondent to pay to the petitioner a sum of Rs. 18,26,79,927/- along with interest and further cost of Rs. 1,00,000/- failing which the disputes would be referred to the Sole Arbitrator in terms of the Agreement. He also referred to a letter dated 29.09.2015 sent by the respondent in response to the aforesaid notice and drew the attention of the Court to sub para (g) of para 2 of the said letter whereby respondent had expressly admitted that it had agreed to continue to avail the services at the rates specified in the Second Service Agreement as an interim measure even though the term of the said Service Agreement had expired.

3. Mr. Manish Vashisht also referred to the decision of the Supreme Court in Bharat Petroleum Corporation Ltd. v. The Great Eastern Shipping Co. Ltd. 2008 1 SCC 503 in support of his contention that where the services under an agreement are extended even after expiry of the term of the agreement between the parties, the dispute arising there from are subject to resolution in terms of the arbitration clause contained in the agreement.

4. Mr. Siddharth Bawa, the learned counsel for the respondent countered the arguments advanced on behalf of the petitioner and submitted that since it was an admitted case that the term of the Agreement in question had expired, on 31.08.2014, the Arbitration Clause contained therein had also perished. He submitted that availing of the services on similar terms and conditions would not extend the validity of the arbitration agreement which expires with the term of the written agreement. He further referred to the decisions of this Court in R.C. Aggarwal v. Delhi Tourism & Transportation Development Corporation Ltd. 2003 (66) DRJ 92 - and Interocean Shipping (I) Pvt. Ltd. v. Ashish Dhull, (2006) 133 DLT 77 - in support of his contention that the disputes arising after expiry of the term of an agreement would not be arbitrable. He further referred to Section 7 of the Act and submitted that certain parameters are required to be met for a valid arbitration agreement and one of the parameters is that the arbitration agreement should be in writing. He contended that the arbitration clause in an agreement would perish with that agreement; and unless a further agreement is executed in writing, there could be no arbitration agreement between the parties.

5. I have heard the learned counsel for the parties.

6. At the outset, it is necessary to refer to Clause 14 of the Agreement between the parties which reads as under:-

“14. ARBITRATION

If any question, issue, difference or dispute arises between the Parties as to the interpretation of this Agreement or as to the duties or liabilities of either Party hereunder or as to any matter or thing arising out of or under this Agreement, the same shall be referred to and settled by a sole Arbitrator to be appointed by both parties. The Arbitration proceedings shall be conducted at New Delhi, India in accordance with the Indian Laws (both Substantive and Procedural) under the Arbitration and Conciliation Act, 1996. The award of such arbitration shall be final and binding upon both parties hereto, and may be entered in any court having jurisdiction over the party against whom the award is rendered or the assets thereof.”

7. It is not disputed that the parties had agreed that the disputes as to the interpretation