Acknowledgment of tax invoices and delivery challans with arbitration clause, plus partial payments without protest, creates valid arbitration agreement despite absence in purchase orders.

JUDGMENT :

SANDEEP V. MARNE, J.

1) This is an application filed under Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) for appointment of Arbitrator for adjudication of disputes and differences that have arisen between the parties out of the Purchase Orders placed by the Respondent and Tax Invoices raised by the Applicant. The Purchase Orders placed by the Respondent for supply of imported coal does not include arbitration agreement. However, while supplying the coal, the Applicant has raised Tax Invoices, which provides for settlement of disputes through arbitration under the provisions of the Arbitration Act. According to the Respondent, Purchase Orders constitute the primary contract between the parties which do not contain arbitration agreement. On the other hand, it is the contention of the Applicant that since the delivery of goods covered by Invoices is accepted and since payments are made in respect of some of the Invoices, the arbitration clause printed in the Tax Invoices is accepted by the Respondent. In the light of rival positions taken by the parties, the issue that arises for consideration is whether reference of disputes which relates to supply of coal can be arbitrated by making a reference under Section 11(6) of the Arbitration Act.

2) A very brief reference to the facts of the case would be necessary. Applicant is engaged in the business of distribution and sale of imported Indonesian coal. Respondent approached the Applicant for purchase of Indonesian coal. By emails dated 18 September 2019, Applicant provided quotations for various quantities of coal. According to the Applicant, all the emails sent by it contained a specific stipulation that “disputes and differences, if any will be referred to the provisions of Arbitration and Conciliation Act, 2015 as amended to date and shall be subject to the Courts having jurisdiction in Mumbai only’.

3) Respondent went on placing various Purchase Orders for supply of Indonesian coal on the Applicant. After placing of Purchase Orders Applicant claims to have supplied requisite quantity of Indonesian coal to the Respondent. According to the Applicant, at the time of accepting the Purchase Orders, it had indicated to the Respondent that the terms and conditions mentioned in the Invoices and Delivery Challans raised simultaneously with the delivery, would be binding on the parties.According to the Applicant, the delivery of coal was commenced only after Respondent accepted the said terms. Applicant has placed on record some of the Purchase Orders. According to the Applicant, some of the Purchase Orders were also placed verbally on the basis of emails sent by the Applicant. The Applicant has placed on record some of the emails by which Purchase Orders were communicated to the Applicant.

4) Applicant raised Tax Invoices on the Respondent from time to time. It has given details of several Tax Invoices during the period from 23 September 2019 to 3 April 2020 at Exhibit A to the Application. All the Tax Invoices bear a ‘declaration’ printed thereon containing seven clauses and one of the clauses provided for