An arbitration agreement can be inferred from the parties' conduct and correspondence, establishing binding intent despite the absence of a signed contract.

ORDER :

Krishnan Ramasamy, J.

1. This Arbitration Original Petition has been filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 (in short, 'the Act') by the petitioner, praying to appoint an Arbitrator to adjudicate the disputes between the parties arising out of the Purchase Orders mentioned therein.

2. Facts in brief, giving rise to the filing of the present Original Petition, are as follows:

3. The petitioner herein is a Public Limited Company, deals with the business of Water Infrastructure Projects across the globe. The petitioner issued Letters of Intent to the respondent for the supply of High Density Polyethylene Pipes for its projects. In pursuant to the Letters of Intent, the petitioner issued as many as 22 Purchase Orders on various dates. Every Purchase Order contains the following Clause:

"Note: The Purchase Order shall be governed by the "General Conditions of Contract for procurement of Materials/Equipment" untill unless specified"

3.1. According to the petitioner, a harmonious reading of the above would go to show that the Purchase Orders were evidently issued in pursuant to the Letters of Intent and thereby, the General Conditions of Contract (in short, 'GCC') would govern the Purchase Orders which were issued for the projects.

3.2. While so, according to the petitioner, dispute arose between the parties in relation to the supply of poor quality of pipes for the projects and the petitioner made various claims vide letter dated 13.10.2023 to the tune of Rs. 116.33 Crores. The respondent issued a legal notice dated 29.01.2024 and raised 3 counter claims against the petitioner in relation to the projects, which are in the nature of termination payments, alleged outstanding dues and damages.

3.3. The petitioner, invoking Clause 28 of the GCC, issued a notice on 09.02.2024, calling upon the respondent to amicably resolve the dispute. It appears that despite settlement talks held between the parties, no amicable settlement was arrived at. The respondent vide letter dated 18.03.2024 declined to mutually appoint an Arbitrator in accordance with Clause 28.2 of the GCC and recommended an appointment of the Arbitrator under the provisions of Section 11(6) of the Act. In reply, the petitioner issued a notice of arbitration dated 22.03.2024 under Section 21 of the Act, suggesting a broad-based panel of arbitrators from legal and technical background and requested to confirm the name of any one of them as the Arbitrator. However, the respondent vide letter dated 21.03.2024, reiterated that they recommended the appointment of an independent arbitrator under Section 11(6) of the Act. This was again confirmed by the respondent vide letter dated 23.03.2024. However, according to the petitioner, despite the explicit admission on the part of the respondent to act in accordance with the GCC in relation to the referral of the disputes to arbitration, the respondent denies the very existence of GCC itself. Hence, the petitioner has come forward with the present petition.

4. Resisting the petition, the respondent filed a counter affidavit, wherein, it is stated that the terms and conditions stipulated under GCC do not bind the respondent. There is only a general reference to the same and no specific reference to the arbitral clause. The GCC has not been signed by either of the parties and the respondent does not have original signed copy of the GCC for any of the Purchase Orders as the same was not signed by the respondent under Clause 30.7 of the GCC, which stipulates that the GCC which forms part of the Contract along with Purchase Orders and Letters of Intent, shall be executed by both the parties and both parties have to retain an original copy of the same. Therefore, both the petitioner and respondent have not signed the GCC and not retained an original copy as per Clause 30.7 of the GCC and as such, the petitioner cannot seek to enforce the terms and conditions of the GCC. Only Letters of Intent and Purchase Orders