IN THE HIGH COURT OF KERALA AT ERNAKULAM
S. MANU, J.
Sigmatic Nidhi Limted, Represented By Its Managing Director Joseph E.A. – Petitioner
Versus
Suresh Kumar, S/o. Unnikrishnan and Ors. – Respondents
A.R.No.68 of 2025
Decided On : 10-11-2025
| Table of Content |
|---|
| 1. introduction of parties and case context. (Para 1) |
| 2. default in loan repayment and arbitration initiation. (Para 2) |
| 3. challenge to arbitrator's appointment. (Para 3) |
| 4. assessment of the arbitration agreement's validity. (Para 4) |
| 5. arguments regarding the arbitration clause's binding nature. (Para 5 , 6) |
| 6. analysis of arbitration agreement requirements. (Para 7 , 8 , 9) |
| 7. judicial interpretation of arbitration agreements. (Para 10 , 11 , 12) |
| 8. establishing validity without signatures. (Para 13 , 14 , 15 , 16) |
| 9. acknowledgment of the arbitration clause. (Para 17) |
| 10. court's orders on arbitration request. (Para 18 , 19) |
ORDER :
S. MANU, J.
Petitioner is a Limited Company carrying on the business of providing financial assistance. The respondents approached the company for financial assistance. First respondent is the borrower and 2nd and 3rd respondents are co-borrowers. Annexure A2 is a document signed by the respondents which is in the form of an agreement, but not signed by any representative of the petitioner. It contains an arbitration clause.
2. Respondents committed default in repaying the loan amount. The petitioner company invoked the arbitration clause and an Arbitrator was appointed. An award was passed on 2.5.2023. Thereafter, E.P.No.551/2023 was filed before the District Court for execution of the award. Respondents entered appearance and filed their objection. By Annexure A6 order dated 1.3.2024 the Execution Application was dismissed for the reason that the appointment of the Arbitrator was not in accordance with the provisions of the Arbitration and Conciliation Act,1996.
3. Since the execution petition was dismissed on the basis of the finding that the appointment of the Arbitrator was not in accordance with the provisions of the Act, which virtually nullifies the award, the petitioner company approached this Court in this Arbitration Request for appointment of an Arbitrator. Respondents entered appearance through their counsel.
4. Respondents did not object to appointment of Arbitrator by this Court. However, it was noticed that Annexure A2 document which contains the arbitration clause was not signed by any representative of the petitioner and hence it became indispensable to analyse the issue as to whether there was a proper agreement between the parties for referring the dispute to arbitration.
5. Learned counsel for the petitioner, Mr.Paulochan Antony, submitted that Annexure A2 was signed by the respondents and that they had not raised any dispute, either in the previous arbitration proceedings or in the instant case, regarding the existence of a binding arbitration agreement. He further submitted that it is clear from the other documents produced that the parties acted on the basis of the Annexure A2 agreement, and therefore, from the facts and circumstances, it can be inferred that there was consensus between the parties and that Annexure A2 was treated as binding by both sides. He hence contended that the arbitration clause in Annexure A2 is valid and that this Court can act on the basis of the same. Further, the learned counsel contended that under the provisions of the Arbitration and Conciliation Act, 1996 , there is no requirement that an arbitration agreement shall always be signed. The learned counsel referred to the following judgments of the Hon’ble Supreme Court:
1. Govind Rubber Limited v. Louis Dreyfus Commodities Asia Private Limited . [(2015) 13 SCC 477] .
2. Mahanagar Telephone Nigam Ltd. v. Canara Bank and Others [(2020) 12 SCC 767].
3. Glencore International AG v. M/S. Shree Ganesh Metals [2025 SCC OnLine SC 1815].
6. He fairly submitted that a contrary view was taken in Raju J Vayalattu v. Veeteejay Motors Pvt. Limited [2025 KHC 1754]. However, the learned counsel submitted that the judgments of the Hon'ble Supreme Court referred above were not brought to the attention of the Court while rendering the order.
7. The issue springing up for consideration is as to whether Annexure
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