2026 Supreme(Online)(MP) 4364

HIGH COURT OF MADHYA PRADESH
Amarjot Developers And Finance Pvt. Ltd. – Appellant
Versus
Mpm Homes Development Llp – Respondent
AC No. 108 of 2025

An arbitration agreement is established under Section 7(4)(c) of the Act when parties explicitly assert its existence in pleadings or applications, precluding them from later denying the agreement. The doctrine of estoppel prevents parties from adopting contradictory stands regarding the existence of an arbitration clause in successive judicial proceedings.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 7(4)(c), 8, and 11 - Existence of arbitration agreement - Exchange of statements - Parties are not permitted to approbate and reprobate by invoking an arbitration clause in civil proceedings to resist a suit and subsequently denying the existence of such an agreement in proceedings for the appointment of an arbitrator - A pleading in a written statement or an application under Section 8 of the Act asserting the existence of an arbitration clause, when not denied by the nature of the other party's response, constitutes a valid arbitration agreement under Section 7(4)(c). (Paras 27, 28, 29, 34, 35, 36)

(B) Arbitration - Appointment of arbitrator - When parties have failed to appoint an arbitrator by mutual consent and there is a clear existence of an arbitration agreement as derived from the conduct and pleadings of the parties, the court is empowered to exercise jurisdiction under Section 11 of the Act to appoint a sole arbitrator for the resolution of the dispute. (Paras 37, 41)

Facts of the case:
The applicant filed a petition for the appointment of an arbitrator following a dispute regarding the payment of balance consideration for a land sale deed. Originally, the applicant filed a civil suit for declaration and injunction, which the respondents resisted by filing a written statement and an application under Section 8 of the Arbitration and Conciliation Act, specifically claiming that the dispute was covered by the arbitration clause in the sale deed. However, when the applicant subsequently moved for the appointment of an arbitrator, the respondents contended that no valid arbitration agreement existed, arguing that the clause in the sale deed was merely an agreement to agree in the future.

Findings of Court:
The court observed that the respondents' earlier conduct in relying on the arbitration clause to initiate referral of the dispute in the civil court created a binding admission. By invoking the arbitration clause in the written statement and the application under Section 8 of the Act, which the applicant accepted, an arbitration agreement was established under Section 7(4)(c) of the Act. The court held that the respondents could not be permitted to adopt contradictory stands in different judicial proceedings.

Issues: The main issues were whether a valid arbitration agreement existed between the parties and whether the respondents were estopped from denying the existence of the arbitration clause after having previously relied upon it in civil proceedings.

Ratio Decidendi: An arbitration agreement need not be in a specific form; it is established where the intention to refer disputes to a private tribunal is evidenced by the conduct, pleadings, and correspondence of the parties. Under Section 7(4)(c), if a party alleges the existence of an arbitration agreement in the exchange of statements of claim and defense and it is not denied, such an exchange constitutes a valid arbitration agreement. The doctrine of approbate and reprobate prevents a party from oscillating between positions in judicial proceedings.

Result: Application allowed and a retired High Court judge was appointed as the sole arbitrator.