The main legal point established is that an arbitration agreement can be inferred from the circumstances, including the execution of a sale deed following a prior agreement to sale with an arbitration clause, and the exchange of communications or statements between the parties.

( 1 ) ON 18-9-2001 an application was filed by the petitioner under Section 11 (5) of the Arbitration and Conciliation Act, 1996, which shall be referred hereinafter as Act, wherein it was prayed to appoint the arbitrator to settle the dispute between the parties. In the petition it was alleged that on 24-9-1998 respondent executed the sale deed in favour of the petitioner which contains the following Arbitration Clause :-"any disputes/differences between the vendor or Seller and Purchaser shall be referred mutually to a. Arbitrator through arbitration under the prevailing Arbitration laws. "

( 2 ) IT was submitted that since there was a dispute regarding selling out the covered parking area of Devdarshan building situated at South Tukoganj, therefore notices were issued to the respondents for appointment of Arbitrator for resolving the dispute between the parties, in view of the arbitration clause quoted in the Sale Deed itself, but of no avail. Hence it was prayed to appoint the Arbitrator. Application was opposed by the respondents on various grounds including that the petitioner is claiming for appointment of the Arbitrator on the basis of recital in the Sale Deed. It was submitted that as per Section 7 (3) (a)of the Act an Arbitration Agreement is required to be signed by the parties. It was alleged that since the sale deed was signed by only one of the parties, therefore, it cannot be treated as Arbitration Agreement. For the purpose of the convenience Section 7 of the Act is quoted herein below :-Section 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 to make that arbitration clause part of the contract.

( 3 ) LEARNED counsel for the petitioner submits that prior to the execution of the sale deed parties entered into an agreement to sale the property vide agreement dated 11/9/1997 wherein there was a Clause of arbitration which has been reproduced in the sale deed dated 24/9/1998. It was submitted that sale deed was the consequent of the Agreement, therefore it cannot be said that there was no agreement between the parties regarding appointment of Arbitrator. It was further submitted that since the sale amount was paid by the petitioner and in lieu of which the sale deed was executed, therefore, impliedly the petitioner was agreed for appointment of the Arbitrator. On the strength of this it was argued that in the circumstances the application filed by the petitioner cannot be thrown out on the ground that there is no agreement which has been signed by the parties. Furthermore it was submitted that the objection that there was no arbitration clause in the agreement could have been taken by the petitioner but not the respondents who has agreed in writing while executing the sale deed.

( 4 ) LEARNED counsel for the petitioner placed reliance on a decision reported in 2002 (1) Arb LR 174 (Delhi), Unipack Industries v. Subhash Chand Jain and others, wherein Hon'ble High Court of Delhi has observed that, "as per Section 7 read with section 2 (b) of the Act there has to be an agreement to ref

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