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IN THE HIGH COURT OF DELHI
Sanjeev Narula, J.
Swastik Pipe Ltd. - Appellant
Versus
Shri Ram Autotech Pvt. Ltd. - Respondent
Arb. P. 241 of 2021
Decided On : 05-07-2021




An arbitration agreement under the Arbitration and Conciliation Act, 1996, does not require signatures if parties' intent to arbitrate can be inferred from conduct or written documentation.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - The petitioner sought appointment of Sole Arbitrator for disputes arising from invoices between the parties - Outstanding payment of INR 15,63,217/- claimed for goods supplied - Respondent failed to respond to the legal notice invoking arbitration - The Court held that the arbitration agreement exists despite the absence of signatures on the invoices, using the terms printed therein as sufficient to infer intent according to Section 7 of the Act. (Paras 2, 3, 10, 14, 16)

(B) Arbitration agreement - Nature and validity - The Court recognized that an arbitration agreement need not be signed to be valid, provided that the intent to arbitrate can be inferred from the parties' conduct. (Paras 10, 11, 16)

Facts of the case:
The petitioner, engaged in manufacturing steel pipes, sought arbitration due to outstanding dues from the respondent for supplied goods, which the respondent did not deny despite service of notice.

Findings of Court:
The arbitration agreement was inferred from the conduct and communications between the parties, signaling a prima facie existence of the agreement.

Issues: The main issue was whether the terms on the invoices constituted a valid arbitration agreement amidst the absence of a signature.

Ratio Decidendi: The court confirmed that the absence of a signature does not invalidate an arbitration agreement if intent can be inferred from conduct and acceptance of invoices.

Result: Petition allowed; Sole Arbitrator appointed.

Table of Content
1. factual background of the arbitration request. (Para 1 , 2 , 3)
2. arguments for the appointment of an arbitrator. (Para 4 , 5)
3. analysis and reasoning on the validity of arbitration agreement. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16)
4. conclusion and order for arbitration appointment. (Para 17 , 18 , 19 , 20 , 21)

JUDGMENT

Sanjeev Narula, J. The present petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the `Act'] seeks appointment of a Sole Arbitrator to adjudicate the disputes arising from the tax invoices issued by the Petitioner-Swastik Pipe Ltd. [hereinafter referred to as `SPL'] in the course of their dealings with the Respondent-Shri Ram Autotech Pvt. Ltd. [hereinafter referred to as `SRAPL'].

2. Briefly stated, the facts emerging from the petition, are as follows: SPL is engaged in the business of manufacturing, exporting, and supplying steel pipes and tubes to heavy engineering industries in India and abroad. SRAPL is in the business of manufacturing and supplying sheet metal and plastic moulded components. SRAPL placed orders with SPL for the purchase of `C.R. Strips'. The same were supplied by SPL as per SRAPL's request and specifications, on a running account basis. The said commercial dealings between the parties lasted between 1st April, 2019 to 29th December, 2020. While some payment was made, but an amount of INR 15,63,217/- (inclusive of interest @ 18% p.a. till 29th December, 2020 for the delayed payments), is outstanding against the goods which have been already been delivered to and received by SRAPL.

3. Since the liability was not discharged, a legal notice dated 31st December, 2020, was issued by SPL, calling upon SRAPL to make good the amount due or agree to arbitration in accordance with the terms and conditions of the invoices which contained an arbitration clause. The said notice was served on SRAPL at their Delhi office on 6th January, 2021, and also at their Gurugram office on 14th January, 2021, despite which, SRAPL neither made the payment nor replied to the said notice. In these circumstances, SPL has approached this Court seeking the appointment of a Sole Arbitrator by way of the present petition.

4. The petition was taken up and notice was issued on 15th February, 2021 which was returnable on 17th March, 2021. On this date, despite successful service of notice, none appeared for SRAPL. The matter was heard at length on 18th March but again, there was no representation from SRAPL's side. Thus, it can only be surmised that SRAPL has wilfully chosen not to appear before this Court. In these circumstances, the Court has proceeded to decide the present petition ex-parte on the basis of the pleadings and the submissions advanced by the counsel for SPL.

5. Mr. Sanjay Jain, learned counsel for SPL argued that in view of the arbitration agreement between the parties, the Court must proceed to appoint an Arbitrator. On a query raised by the Court relating to the existence of a valid arbitration agreement, Mr. Jain contended that the clause contained in the invoice constitutes a valid arbitration agreement in view of the judgments of the Supreme Court in Trimex International FZE Ltd. Dubai v. Vedanta Aluminium Ltd., India, 2010(3) SCC 1 and M/s. Caravel Shipping Services Pvt. Ltd. v. Premier Sea Food Exim Pvt. Ltd., (2019) 11 SCC 461. Further, Mr. Jain sought to differentiate the decision of a coordinate bench of this Court in Parmeet Singh Chatwal v. Ashwani Sahani, MANU/DE/0442/2020. Additionally, Mr. Jain also relied upon Section 7 (4) of the Act and stressed that SRAPL has not denied the existence of the arbitration agreement, notwithstanding the categorical assertion to that effect in the notice of invocation of arbitration, and thus, this Court should not have any hesitation in appointing an Arbitrator.

ANALYSIS AND FINDINGS

6. It is noticed that the arbitration clause is on the same page as the detai

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