IMPORTANT POINT
The main legal point established is that unless a party establishes a prima facie case of non-existence of a valid arbitration agreement, the parties are to be referred to arbitration.

JUDGMENT

Prathiba M. Singh, J.

1. This hearing has been done through hybrid mode.

Background and Introduction

2. The present petition has been filed by the Petitioner-SRF Ltd. under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter, `1996 Act') seeking appointment of a sole arbitrator to adjudicate upon its disputes with the Respondent-M/s Jonson Rubber Industries Ltd. Recourse to arbitration in the present petition has been taken, pursuant to clause 22 of the terms and conditions specified in the invoices stemming out of purchase orders dated 26th December, 2019 and 27th December, 2019.

3. It is the case of the Petitioner, that the Respondent had approached it to purchase `Belting Fabric Material' and placed purchase orders for the same on 26th December, 2019 and 27th December, 2019. The Petitioner claims that he sold the said material through seven separate invoices in February, 2020 and the collective amount due from the said invoices is Rs.50,71,455.26/-. The Petitioner also claims an additional amount of Rs.86,428/- on account of accrued interest and GST liabilities. Further, with respect to the said outstanding bills, the Petitioner issued a legal demand notice on 15th June, 2022. Subsequently, the Petitioner invoked arbitration clause under Section 21 of the 1996 Act on 2nd May, 2023, in terms of clause 22 of the terms and conditions stipulated in the invoices.

Submissions

4. It is submitted by ld. Counsel for the Petitioner that each of the invoices consisted of an arbitration clause and, thus, the dispute deserves to be referred to arbitration. On the other hand, ld. Counsel for the Respondent raises an objection that a valid arbitration agreement in terms of Section 7 of the 1996 Act does not exist between the parties, as the crux of the dispute arises from two purchase orders dated 26th December, 2019 and 27th December, 2019. The said purchase orders contained a jurisdiction clause which reads as under:

"Jurisdiction for Arbitration/Dispute - Only Delhi Court shall have jurisdiction to try any dispute concerning in the Purchase Order"

5. It is the submission of Mr. Rahul Kripalani, ld. Counsel for the Respondent that consensus ad idem between the parties existed only qua this jurisdiction clause and not the arbitration clause as contained in the invoices. He submits that as per the aforesaid jurisdiction clause, only Courts in Delhi have jurisdiction to adjudicate disputes between the parties that arise from the said purchase orders. Ld. Counsel for the Respondent states that the two purchase orders which were honoured through seven invoices, were all subsequent in nature. Further, he claims that the invoices which included an arbitration clause in their terms and conditions on the reverse side, were not properly received by the Respondent.

6. Ld. Counsel for the Respondent further states that the Petitioner's conduct itself would prove that he never insisted upon adhering to the terms and conditions of the invoices. He submits that the purchase orders being the agreed upon documents between the parties would take precedence over the invoices subsequently raised by the Petitioner.

7. Ld. Counsel for the Respondent submits that the said invoices clearly suggest that there was nothing written on the back side of the invoices. This is indicated by presence of the words `Page 1 of 1' on the top-right corner of the invoices. Further, he submits that there is no signature of the Respondent on the `general terms and conditions of sales' which the Petitioner claims, is to be found on the back of the invoices. Thus, the Respondent never agreed to the said terms and conditions and therefore, there is no question about existence of a valid arbitration agreement between the parties in terms of Section 7 of the 1996 Act.

8. It is further submitted by ld. Counsel for the Respondent that the Petitioner failed to adhere to its own stipulated terms and conditions as outlined in the invoices, thereby casting doubt upon the