Signature of Either Party on an Arbitration Agreement is not Compulsory: Delhi HC
On considering the validity of an arbitration agreement that a party did not sign Justice Sanjeev Narula on 5th July had ruled that by considering the language of section 7 (4) (b), that there cannot be a doubt that the signature of either party on Arbitration Agreement was not mandatory. Then the bench further said that an agreement could be constituted if it has all necessary attributes and also an arbitration agreement need not be in a particular format. After they made the observation, an ex parte order which was favoring Swastik pipe Ltd and proceeded to appoint Kanika Singh as the sole arbitrator was passed by the bench.
The dispute arising from tax invoices issued by the petitioner then in the instant petition which was under section 11 (6) of the arbitration and conciliation act they sought to the appointment of the sole arbitrator so that he can adjudicate the disputes. An amount of Rs 15,63,217 was outstanding while some payment was made to the Petitioner
Counsel for the SLP raised the following contentions-
Because of the apex court judgment in the time international FZE Ltd. Vs. Vedanta Aluminium Ltd. the arbitration clause mentioned in the invoice constitutes a valid arbitration agreement. The disputes have been prima facie established because the goods which were given by the petitioner were contended and received by the SRAPL and therefore it was said that the dispute has been prima facie established. the council stressed that SRAPL had not denied the existence of the Arbitration Agreement because the reliance was placed on section 7 (4) of the act therefore the court does not hesitate to appoint the arbitrator.
The court held that there could not be any doubt that the signature of either on the Arbitration Agreement was not mandatory by considering the language of section 7(b).
In the invoice whatever the terms and conditions were mentioned are generally inserted by the party issuing the invoice, and then the court has asked the parties to settle their disputes through arbitration. And as same as in the instant case, there was no exchange of statement of claim and defense, but the fact remained that SRAPL did not refute the existence of the arbitration agreement.
So, as in light of the observations above mentioned, the bench had allowed the instant petition, and also the bench had appointed the arbitrator so that he can adjudicate the issue.