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2026 Supreme(Online)(Del) 17246
IN THE HIGH COURT OF DELHI AT NEW DELHI
Ajay Digpaul, J
Ambica Enterprises – Appellant
Versus
Alok Gupta – Respondent
CM(M) 1724/2026 | CM APPL. 51407/2026 | CM APPL. 51408/2026
For the Appellants/Petitioners: Krishnan Kumar, Aman Bhati, Anubhav Kumar
For the Respondents: Sunil Goyal, Tanveet Kaur
An arbitration agreement must be in writing, but signing is not mandatory if the parties' conduct (such as acting upon invoices) demonstrates acceptance of the terms. The referral court under Section 8 only needs to conduct a prima facie examination of the agreement's existence.
Headnote:(A) Arbitration Agreement - Validity of Clauses in Invoices - Requirement of Writing vs. Signing - An arbitration agreement must be in writing as per Section 7(3) of the Arbitration and Conciliation Act, 1996, but mandatory signing is not required if the conduct of the parties demonstrates acceptance of the terms. (Para 18, 21)
(B) Section 8 of Arbitration Act - Scope of Referral Court - Prima Facie Examination - The referral court is only required to perform a prima facie examination of the existence and validity of the arbitration agreement; a detailed analysis of consent or intent is not incumbent at this stage. (Para 23)
(C) Doctrine of Estoppel/Conduct - Reliance on Invoices - A party cannot rely on unsigned invoices to establish a cause of action in a recovery suit and simultaneously deny the validity of an arbitration clause contained within those same invoices. (Para 18, 25)
Issues: Whether an arbitration clause contained in unsigned invoices is valid and binding when the party has acted upon such invoices.
J U D G M E N T
1. Through the present petition, the petitioner seeks to assail the order dated 10.07.2026 passed by the learned DJ (Commercial Court - 04), South East, Saket Court Complex in CS(COMM) 496/2025 whereby the learned trial court has allowed the respondent/defendant’s application under Section 8 of the Arbitration and Conciliation Act, 1996, Hereinafter “Arbitration Act”, and has referred the matter to arbitration.
2. The petitioner has filed the underlying commercial suit for recovery seeking Rs. 23,09,361/- along with 12% interest per annum.
The petitioner is a registered partnership firm and is in the business of trading disposable and allied products, and the respondent is the proprietor of M/S Tirupati Balaji Overseas & Anr. who are stated to be in the business of manufacture and sales of disposable products.
3. During the course of business, the parties are stated to have developed an amicable commercial relationship, and the petitioner, in April 2024, placed an order for disposable bowls and trays to the tune of approximately two crores, and paid an advance of Rs. 15 lac on 30.04.2024 and Rs. 16 lac on 22.05.2024.
4. However, it is stated by the petitioner that the last two consignments of the respondent contained not only substandard products, but the same were also priced higher than the market rate. It is further stated that the parties had an open and running account, and as per the petitioner’s books of accounts, as on 15.06.2024, Rs. 21,18,680/- was outstanding from the respondent. Thus, the petitioner instituted the underlying commercial suit for recovery seeking Rs. 23,09,361/-.
5. The respondent filed its written statement thereto and an application under Section 8 of the Arbitration Act seeking reference of the dispute to arbitration. In the written statement, the respondent contended inter-alia that the petitioner has refused to accept delivery of the products on baseless grounds, and that the same is causing heavy losses to the respondent as the products are lying unutilized in the respondent’s godown.
6. In the application under Section 8 of the Arbitration Act, the respondent sought reference of the dispute to arbitration and placed reliance on the arbitration clause in the invoices dated 09.04.2024, 10.04.2024, 24.05.2024, 13.06.2024 and 15.06.2024 and contended that the arbitration clause was always within the knowledge of the petitioner, and the petitioner has further acted upon these invoices, thereby consenting to arbitration clause.
7. The petitioner thereafter filed their reply to the application under Section 8 contending inter-alia that in absence of any valid arbitration agreement within the meaning of Section 7 of the Arbitration Act, no dispute can be referred to arbitration.
8. The application under Section 8 of the Arbitration Act came to be allowed vide the impugned order dated 10.07.2026, and the parties were directed to seek their respective remedies under the Arbitration Act. The learned trial court, while placing reliance on the judgment of the Hon’ble Supreme Court in Concrete Additives and Chemicals Pvt. Ltd. v SN Engineering Services Pvt. Ltd. and the judgments of coordinate benches of this Court in Radico Khaitan Ltd. v Harish Choudhan and Swastik Pipe Ltd. v Shri Ram Autotech Pvt. Ltd. noted that it is settled law that arbitration clauses in invoices are valid arbitration agreements, and thus, reference under Section 8 can be made through the same.
9. The learned counsel for the petitioner has submitted that a matter can only be referred to arbitration under section 8 of the Arbitration Act, if it stems from a valid arbitration agreement in consonance with Section 7(3) and Section 7(4) of the Arbitration Act.
10. He has relied on Section 7(3) and (4)(a) of the Arbitration Act to submit that an arbitration agreement has to be in writing, and the agreement shall be considered to be in writing if the document is signed
