An arbitration clause must clearly express the parties' intent to bind themselves to arbitration; vague references do not constitute a valid arbitration agreement.

JUDGMENT

Vibhu Bakhru, J. (Oral)--The petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act'), inter alia, praying that an Arbitrator be appointed to adjudicate the disputes that have arisen in connection with the Annual Operation and Maintenance Contract dated 03.05.2017.

2. The terms and conditions included as a part of said contract also contains the following sentence:

`Jurisdiction: The Arbitration proceedings shall be conducted in the Courts of New Delhi'.

3. Mr Sinha, learned counsel appearing for the petitioner, contends that the said sentence constitutes an arbitration agreement as contemplated under Section 7 of the A&C Act. Mr Khanna, learned counsel appearing for the respondent has countered the aforesaid submission. He relies upon the decision of the Supreme Court in Jagdish Chander v. Ramesh Chander and Ors., Civil Appeal No. 4467/2002 decided on 26.04.2007 as well as the decision of the Coordinate Bench of this Court in Avant Garde Clean Room & Engg. Solutions Pvt. Ltd. v. Ind Swift Limited, (2014)210 DLT 714. On the strength of the said decision, he submits that the aforementioned clause cannot be construed as an arbitration agreement.

4. It is relevant to refer to Section 7 of the A&C Act, which defines an arbitration agreement. The same is set out below:

" 7. Arbitration agreement. -

(1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in-

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as make that arbitration clause part of the contract."

5. It is clear from the plain language of Section 7 of the A&C Act that in order to constitute an arbitration agreement, the parties must agree to submit all or certain disputes to arbitration in respect of a defined legal relationship, whether contractual or not. The minimal, that is, required is that the arbitration agreement/clause should clearly indicate an intention of the parties to refer the disputes to arbitration and that they would be bound by the decision of the arbitral tribunal. It is difficult to accept that the aforementioned clause establishes any such intention on the part of the parties.

6. In Jagdish Chander v. Ramesh Chander and Ors. (supra), the Supreme Court had referred to its earlier decisions and set out the principles as to what constitutes an arbitration agreement. Paragraph 8 of the said decision is relevant and set out below:

"8. This Court had occasion to refer to the attributes or essential elements of an arbitration agreement in K.K. Modi v. K.N. Modi, (1998)3 SCC 573, Bharat Bhushan Bansal v. U.P. Small Industries Corpn. Ltd., (1999)2 SCC 166 and Bihar State Mineral Development Corpn. v. Encon Builders (I) (P.) Ltd., (2003)7 SCC 418. In State of Orissa v. Damodar Das [(1996)2 SCC 216] this Court held that a