A dispute resolution clause requiring mutual consent or a further agreement between parties to refer matters to arbitration does not constitute a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996, as it lacks a mandatory obligation to arbitrate.

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JASGURPREET SINGH PURI, J. (ORAL)

1. The present application has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) praying for appointment of an independent Sole Arbitrator to adjudicate upon the disputes and differences which have arisen between the parties.

2. Learned counsel for the applicant submitted that there was an Agreement executed between the applicant and the respondent which has been attached with the present application vide Annexure P-1 and the same is in the nature of a Sub-Contract Agreement dated 26.06.2018. The said agreement contains a valid arbitration clause i.e. Clause 11 which provides for reference of dispute to a Sole Arbitrator. He further submitted that since a dispute arose between the parties, the applicant has invoked the aforesaid arbitration clause by issuing a notice under Section 21 of the Act to the respondent vide Annexure P-6 dated 28.10.2025. However, no response was received from the respondent in this regard. Therefore, the present application has been filed for appointment of an independent Sole Arbitrator by this Court.

3. Learned counsel further submitted that the aforesaid notice was sent by way of a registered post dated 30.10.2025 and inadvertently the receipt of the same could not be attached with the present application and has sought permission from this Court to place on record the original receipt of the same. The original receipt which has now been produced before the Court is permitted to be taken on record as Mark ‘X’. Registry is directed to tag the same at an appropriate place along with the paper-book.

4. On the other hand, learned counsel for the respondent has submitted that there is no dispute with regard to the aforesaid Agreement executed between the parties vide Annexure P-1 and there is also no dispute with regard to the existence of Clause 11 in the Agreement which has been so relied upon by learned counsel for the applicant. He further submitted that he has got two-fold objections in the present case on the basis of which the present application is liable to be dismissed. Firstly, neither the applicant issued any notice to the respondent under Section 21 of the Act for invoking the aforesaid arbitration clause nor it was received by the respondent and therefore, the present application is not maintainable. Secondly, Clause 11 of the Agreement which has been relied upon by learned counsel for the applicant cannot be invoked as an arbitration clause because there is no intention of the parties shown in the aforesaid clause to suggest that by way of the aforesaid clause the parties have agreed to refer the matter to arbitration. However, on the other hand, as per the aforesaid clause it was so decided that the matter ‘may’ be referred in future for the arbitration subject to the fulfilment of the conditions contained in the agreement and since there is no valid arbitration clause, the present application is liable to be dismissed.

5. I have heard learned counsels for the parties.

6. The agreement between the parties is not in dispute and the aforesaid clause is also not in dispute. First objection which has been raised by learned counsel for the respondent was that the applicant had not issued any notice invoking the arbitration clause and therefore, the present application is liable to be dismissed. However, during the course of argument, learned counsel for the applicant has produced the original receipt of service by way of a speed post of Annexure P-4 and that has alrea