An arbitration agreement permits a party to refer future disputes to arbitration without reiterating consent post-dispute, affirming unilateral references as invalid unless per Section 20 procedures are followed.

1. What is the nature of a reference to arbitration and of the consent of the parties on which it is based? When can a reference be said to be unilateral? When must it be made under S.20 of the Arbitration Act ? These questions which go to the very root of the working of the arbitration system have arisen for decision in this appeal against the order of Hardy J. refusing to set aside the award against the appellant and in favour of Respondent No. 1.
Appellant P. C. Aggarwal carried on forward transactions in stocks and shares through Respondent No. 1 K. N. Khosla. a member of the Delhi Stock Exchange Association. Contract notes such as Exhibits R1 to R4 used to be signed by the appellant while entering into these contracts with the Respondent No. 1. These contract notes contained the following arbitration clause: -
"In the event of any claim (whether admitted or not), difference or disputes Arising between you and me / us out of these transactions the matter shall be referred to arbitration in Delhi as provided in the Rules. Bye - laws and Regulations of Delhi Stock Exchange Association. Ltd., Delhi.
This contract constitutes and shall be deemed to constitute as provided overleaf an agreement between you and me / us that all claims (whether admitted or not), differences and disputes in respect of any dealings. transactions and contracts of a date prior or subsequent to the date of this contract (including any question, whether such dealings, transactions and contracts have been entered into or not) shall be submitted to and decided by arbitration in Delhi as provided in the Rules. Bye - laws and Regulations of the Delhi Stock Exchange Association. Ltd., Delhi." Respondent No. 1 made a demand on the appellant for the payment of Rs.29,255:74 on account of these transactions. As the appellant failed to pay the amount, the Respondent No. 1 took steps to have the disputes referred to arbitration in accordance with the Rules. Bye - laws and Regulations of the Association. In making the reference, he followed the procedure, laid down in Bye - laws 247 to 249 and Regulation 15 together with Appendix A containing the prescribed forms. Briefly, the procedure was as follows: -
1. The appellant made an application to the Secretary of the Association in Form No. 1 called the Arbitration Application Form for adjudication of the disputes between him and the appellant by arbitration as provided in the Rules. Bye - laws and Regulations of the Association. The application was accompanied by: -
(i) Notice in Form No. 2 in triplicate appointing the Respondent No. 1 as arbitrator and calling upon the appellant to appoint his arbitrator within seven days of the service of the notice.
(ii) A statement of the case in triplicate together with statements of accounts in triplicate containing the claim or claims made by the Respondent No. 1 against the appellant.
(iii) Rs.20/- being the institution fee and Rs.25/- as the arbitration fee. He then enclosed as per list annexed all the documents and papers relating to the reference.
2. On receipt of the notice and statement of claim from Respondent No. 1, the Secretary of the Association forwarded the same to the appellant enclosing for the use of the appellant Form No. 4 (Form of Reply to Arbitration Application) and Form No. 5 (Form of Nomination and Appointment of his arbitrator).
3. On failure of the appellant to appoint his arbitrator within seven days, of the receipt of the notice, the President of the Association appoint