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Arbitration proceedings -Court can appoint any arbitrator other than the prescribed arbitrator as per the terms of agreement – disputes between contractors and Railways – as per the terms of agreement a railway Officer was to be appointed as arbitrator – decades lapsed no award was passed – High court appointed former Chief Justice of the Sikkim High Court – challenged as invalid and beyond conditions of arbitration agreement – Apex court held thatA period of nearly two decades has elapsed since the contractor had raised his claims for alleged wrongful termination of the two contracts. The situation is distressing and to say the least disturbing. The power of the Court under the Act has to be exercised to effectuate the remedy provided thereunder and to facilitate the mechanism contemplated therein. In a situation where the procedure and process under the Act has been rendered futile, the power of the Court to depart from the agreed terms of appointment of arbitrators must be acknowledged in the light of the several decisions noticed by us. We are, therefore, of the view that no infirmity muchless any illegality or failure of justice can be said to be occasioned by the order passed by the High Court so as to warrant any interference. We, therefore, unhesitatingly dismiss this appeal filed by the appellant-railways. = CIVIL APPEAL NO.6275 OF 2014 (Arising out of SLP (C) No. 20427 OF 2013) NORTH EASTERN RAILWAY & ORS. … APPELLANT (S) VERSUS TRIPPLE ENGINEERING WORKS … RESPONDENT (S) = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41824

    Arbitration proceedings -Court can appoint any arbitrator other than the prescribed arbitrator as per the terms of agreement –   disputes between contractors and Railways – as per the terms of agreement a railway Officer was to be appointed as arbitrator – decades lapsed no award was passed – High court appointed  former Chief Justice of the … Continue reading

Arbitration and conciliation Act – Request for appointment of Arbitrator under sec.11 was rejected by High court – Apex court held that as both parties mutually agreed for arbitration by retired Hon’ble Judge of the Kerala High Court, without going into the question of merit, we set aside the impugned order dated 19th July, 2010 and refer the matter to Hon’ble Mr. Justice K. John Mathew (retired). The parties will negotiate and settle the terms and conditions of arbitration. It is expected that the arbitration proceeding will be concluded at an early date. The appeals stand disposed of with aforesaid observations. = M/s Kaikara Construction Company … Appellant VERSUS State of Kerala and Ors. … Respondents = 2014 – July. Part -http://judis.nic.in/supremecourt/filename=41711

Arbitration and conciliation Act – Request for appointment of Arbitrator under sec.11 was rejected by High court – Apex court held that  as both parties mutually agreed  for arbitration by retired Hon’ble Judge  of  the  Kerala  High  Court,  without going into the question of merit, we set  aside  the  impugned  order  dated 19th July, 2010 and refer the matter … Continue reading

Arbitration and Conciliation Act, 1996: s. 45 – Reference to arbitration under – Scope of – International commercial arbitration – Multi-party agreements – Joint venture agreements with different parties – Some of the agreements contained arbitration clause while the others did not – Dispute between parties leading to filing of suit – High Court referred the entire suit (including the non-signatory parties to the arbitration agreement) for arbitration u/s. 45 – Joinder of non-signatory parties to arbitration – Permissibility – Held: Joinder of non-signatory parties to arbitration is permissible – They can be referred to arbitration, provided they satisfy the pre-requisites u/ss. 44 and 45 r/w Schedule I of the Act – The cases of group companies or where various agreements constitute a composite transaction with intrinsically interlinked cause of action, can be referred to arbitration, even if the disputes exist between signatory or even non-signatory parties – However, the discretion of the court has to be exercised in exceptional, limiting, befitting and cases of necessity and very cautiously – Expression `any person claiming through or under him’ used in s. 45, takes within its ambit persons who are in legal relationships via multiple and multi-party agreements, though they may not all be signatories to the arbitration clause – In the present case, the corporate structure of the companies demonstrates a definite legal relationship between the parties to the lis or persons claiming under them – Their contractual relationship spells out the terms, obligations and roles of the respective parties which they were expected to perform for attaining the object of successful completion of the joint venture agreement – All the other agreements were intrinsically inter-connected with the mother agreement – All the agreements were part of a composite transaction to facilitate implementation of principal agreement – Hence, all the parties to the lis were covered under expression “any person claiming through or under” the principal (mother) agreement – Arbitration clause in the principal agreement was comprehensive enough to include all disputes arising “under and in connection with” principal agreement – Conduct of parties and even subsequent events show that the parties had executed, intended and actually implemented composite transaction contained in principal/mother agreement – Hence, direction to refer the disputes to arbitration -Convention on Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) – Article II (3) – ICC Rules – UNCITRAL Model Rules. s. 45 – Issues under – Determination of – Issue of jurisdiction should be decided at the beginning of the proceedings itself and they should have finality – Determination of fundamental issues as contemplated u/s. 45 at the very first instance is not only appropriate but is also the legislative intent – Jurisdiction. Code of Civil Procedure, 1908 – s. 9 – Jurisdiction of civil courts – Jurisdiction of the court and the right to a party emerging from s. 9 is not an absolute right, but contains inbuilt restrictions – Civil courts have jurisdiction to try all suits except those which is either expressly or impliedly barred – The provisions of s. 45 of the 1996 Act would prevail over the provisions of CPC – Arbitration and Conciliation Act, 1996 – s. 45. Doctrines/Principles: `Group of Companies’ Doctrine; Principle of `incorporation by reference’; Principle of `composite performance’; Principle of `agreements within an agreement’ and Principle of `Kompetenz kompetenz’ – Discussed. Precedent – Observations – Precedential value – Held: The observations to be construed and read to support the ratio decidendi – They would not constitute valid precedent as it would be hit by the doctrine of stare decisis – Doctrine – Constitution of India, 1950 – Art. 141. Words and Phrases: Expression `connection’ – Meaning of. The questions which inter alia arose for consideration in the present appeals were: (1) What is the ambit and scope of Section 45 of the Arbitration and Conciliation Act, 1996; (2) Whether in a case where multiple agreements were signed between different parties some containing an arbitration clause and others not and where the parties were not identically common in proceedings before the Court (in a suit) and the arbitration agreement, a reference of disputes as a whole or in part could be made to the arbitral tribunal, more particularly, where the parties to an action were claiming under or through a party to the arbitration agreement; and (3) Whether the principles enunciated in the case of *Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya was the correct exposition of law.= Dismissing the appeals, the Court HELD: 1.1 Section 45 is a provision falling under Chapter I of Part II of the Arbitration and Conciliation Act, 1996 which is a self-contained Code. The expression `person claiming through or under’ would mean and take within its ambit multiple and multi-party agreements, though in exceptional case. Even non-signatory parties to some of the agreements can pray and be referred to arbitration provided they satisfy the pre-requisites under Sections 44 and 45 r/w Schedule I. Reference of non-signatory parties is neither unknown to arbitration jurisprudence nor is it impermissible. [Para 167] 1.2 An arbitration agreement, under Section 45 of the 1996 Act, should be evidenced in writing and in terms of Article II of Schedule 1, an agreement in writing shall include an arbitral clause in a contract or an arbitration agreement signed by the parties or contained in an exchange of letters or telegrams. Thus, the requirement that an arbitration agreement be in writing is an expression incapable of strict construction and requires to be construed liberally, as the words of this Article provide. Even in a given circumstance, it may be possible and permissible to construe the arbitration agreement with the aid and principle of `incorporation by reference’. Though the New York Convention is silent on this matter, in common practice, the main contractual document may refer to standard terms and conditions or other standard forms and documents which may contain an arbitration clause and, therefore, these terms would become part of the contract between the parties by reference. The solution to such issue should be case-specific. The relevant considerations to determine incorporation would be the status of parties, usages within the specific industry, etc. Cases where the main documents explicitly refer to arbitration clause included in standard terms and conditions would be more easily found in compliance with the formal requirements set out in the Article II of the New York Convention than those cases in which the main contract simply refers to the application of standard forms without any express reference to the arbitration clause. [Para 72] M.V. “Baltic Confidence” and Anr. v. State Trading Corporation of India Ltd. and Anr. (2001) 7 SCC 473: 2001 (1) Suppl. SCR 699; Olympus Superstructure Pvt. Ltd. v. Meena Vijay Khetan and Ors. (1999) 5 SCC 651: 1999 (3) SCR 490 – relied on 1.3 Under the Indian Law, greater obligation is cast upon the Courts to determine whether the agreement is valid, operative and capable of being performed at the threshold itself. Such challenge has to be a serious challenge to the substantive contract or to the agreement, as in the absence of such challenge, it has to be found that the agreement was valid, operative and capable of being performed; the dispute would be referred to arbitration. [Para 78] State of Orissa v. Klockner and Company and Ors. AIR 1996 SC 2140: 1996 (1) Suppl. SCR 368 – relied on. Abu Dhabi Gas Liquefaction Co. Ltd. v. Eastern Bechtel Corp.(1982) 2 Lloyd’s Rep. 425, CA – referred to. Law and Practice of International Commercial Arbitration by Alan Redfern and Martin Hunder (Fourth Edition) 1.4 The legislative intent and essence of the 1996 Act was to bring domestic as well as international commercial arbitration in consonance with the UNCITRAL Model Rules, the New York Convention and the Geneva Convention. The New York Convention was physically before the Legislature and available for its consideration when it enacted the 1996 Act. Article II of the Convention provides that each contracting State shall recognize an agreement and submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not concerning a subject matter capable of settlement by arbitration. Once the agreement is there and the Court is seized of an action in relation to such subject matter, then on the request of one of the parties, it would refer the parties to arbitration unless the agreement is null and void, inoperative or incapable of performance. Still, the legislature opted to word Section 45 somewhat dissimilarly. Section 8 of the 1996 Act also uses the expression `parties’ simpliciter without any extension. In significant contra-distinction, Section 45 uses the expression `one of the parties or any person claiming through or under him’ and `refer the parties to arbitration’, whereas the rest of the language of Section 45 is similar to that of Article II(3) of the New York Contention. The Court cannot ignore this aspect and has to give due weightage to the legislative intent. It is a settled rule of interpretation that every word used by the Legislature in a provision should be given its due meaning. The Legislature intended to give a liberal meaning to this expression. [Paras 88 and 89] 1.5 The language and expressions used in Section 45, `any person claiming through or under him’ including in legal proceedings may seek reference of all parties to arbitration. Once the words used by the Legislature are of wider connotation or the very language of Section is structured with liberal protection then such provision should normally be construed liberally. [Para 90] 1.6 In view of the legislative object and the intent of the framers of the statute, i.e., the necessity to encourage arbitration, the Court is required to exercise its jurisdiction in a pending action, to hold the parties to the arbitration clause and not to permit them to avoid their bargain of arbitration by bringing civil action involving multifarious cause of action, parties and prayers. [Para 91] 1.7 The scope of concept of `legal relationship’ as incorporated in Article II(1) of the New York Convention vis-

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7134 OF 2012 (Arising out of SLP (C) No.8950 of 2010)   Chloro Controls (I) P. Ltd. … Appellant Versus Severn Trent Water Purification Inc. & Ors. … Respondents WITH CIVIL APPEAL NOS. 7135-7136 OF 2012 (Arising out of SLP (C) No.26514-26515 … Continue reading

whether on the death of a named arbitrator, the arbitration agreement survives or not. Sections 14 and 15 provide the grounds for termination of the mandate of the arbitrator on the ground of incapability of the arbitrator to act or if he withdraws from his office or when the parties agree to the termination of the mandate of the arbitrator. Section 15(2) states that a substitute arbitrator shall be appointed as per the rules that were applicable to the appointment of the arbitrator being replaced. Section 15(2), therefore, has to be given – a liberal interpretation so as to apply to all possible circumstances under which the mandate may be terminated. We have carefully gone through the arbitration clause in the Agreement dated 16.12.1989 and, in our view, the words “at any time” which appear in Clause 21, is of considerable importance. “At any time” expresses a time when an event takes place expressing a particular state or condition that is when the dispute or difference arises. The arbitration clause 21 has no nexus with the life time of the named arbitrator. The expression “at any time” used in the arbitration clause has nexus only to the time frame within which the question or dispute or difference arises between the parties be resolved. Those disputes and differences could be resolved during the life time of the named arbitrators or beyond their life time. The incident of the death of the named arbitrators has no nexus or linkage with the expression “at any time” used in clause 21 of the Agreement. The time factor mentioned therein is the time within which the question or dispute or difference between the parties is resolved as per the Agreement. Arbitration clause would have life – so long as any question or dispute or difference between the parties exists unless the language of the clause clearly expresses an intention to the contrary. The question may also arise in a given case that the named arbitrators may refuse to arbitrate disputes, in such a situation also, it is possible for the parties to appoint a substitute arbitrator unless the clause provides to the contrary. Objection can be raised by the parties only if there is a clear prohibition or debarment in resolving the question or dispute or difference between the parties in case of death of the named arbitrator or their non-availability, by a substitute arbitrator. 22. We are of the view clause 21 does not prohibit or debar the parties in appointing a substitute arbitrator in place of the named arbitrators and, in the absence of any prohibition or debarment, parties can persuade the court for appointment of an arbitrator under clause 21 of the agreement. 23. The High Court in our view was justified in entertaining such an application and appointing a former Judge of this Court as a – sole arbitrator under the Arbitration and Conciliation Act, 1996 to adjudicate the dispute and difference between the parties. 24. In view of the above mentioned reasons, we find no reason to grant leave to appeal and issue notice on the petition for special leave to appeal and the petition is dismissed.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION SPECIAL LEAVE PETITION (C) NO. 17689 OF 2012 ACC Limited … Petitioner (Formerly known as the Associated Cement Co. Ltd). Versus Global Cements Ltd. …Respondent J U D G M E N T K.S. Radhakrishnan, J. 1. The question that falls for consideration in this … Continue reading

SUPREME COURT OF THE UNITED STATES Syllabus COMPUCREDIT CORP. ET AL. v. GREENWOOD ET AL. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 10–948. Argued October 11, 2011—Decided January 10, 2012 Although respondents’ credit card agreement required their claims tobe resolved by binding arbitration, they filed a lawsuit against petitioner CompuCredit Corporation and a division of petitioner bank, alleging, inter alia, violations of the Credit Repair Organizations Act (CROA). The Federal District Court denied the defendants’ motion to compel arbitration, concluding that Congress intended CROA claims to be nonarbitrable. The Ninth Circuit affirmed. Held: Because the CROA is silent on whether claims under the Act can proceed in an arbitrable forum, the Federal Arbitration Act (FAA) requires the arbitration agreement to be enforced according to its terms. Pp. 2–10. (a) Section 2 of the FAA establishes “a liberal federal policy favoring arbitration.” Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24. It requires that courts enforce arbitrationagreements according to their terms. See Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 221. That is the case even when federal statutory claims are at issue, unless the FAA’s mandate has been “overridden by a contrary congressional command.” Shearson/American Express Inc. v. McMahon, 482 U. S. 220, 226. Pp. 2–3. (b) The CROA provides no such command. Respondents contend that the CROA’s disclosure provision—which requires credit repair organizations to provide consumers with a statement that includes the sentence “ ‘You have a right to sue a credit repair organization that violates the [Act],’ ” 15 U. S. C. §1679c(a)—gives consumers theright to bring an action in a court of law; and that, because the CROAprohibits the waiver of “any right of the consumer under this subchapter,” §1679f(a), the arbitration agreement’s waiver of the “right”to bring a court action cannot be enforced. Respondents’ premise is 2 COMPUCREDIT CORP. v. GREENWOOD Syllabus flawed. The disclosure provision creates only a right for consumers toreceive a specific statement describing the consumer protections that the law elsewhere provides, one of which is the right to enforce acredit repair organization’s “liab[ility]” for “fail[ure] to comply with[the Act].” §1679g(a). That provision does not override the FAA’s mandate. Its mere contemplation of judicial enforcement does not demonstrate that the Act provides consumers with a “right” to initialjudicial enforcement. Pp. 3–8. (c) At the time of the CROA’s enactment in 1996, arbitration clauses such as the one at issue were no rarity in consumer contracts generally, or in financial services contracts in particular. Had Congressmeant to prohibit these very common provisions in the CROA, itwould have done so in a manner less obtuse than what respondents suggest. Pp. 8–9. 615 F. 3d 1204, reversed and remanded. SCALIA, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, BREYER, and ALITO, JJ., joined. SO-TOMAYOR, J., filed an opinion concurring in the judgment, in which KA-GAN, J., joined. GINSBURG, J., filed a dissenting opinion.

SUPREME COURT OF THE UNITED STATES No. 10–948 COMPUCREDIT CORPORATION, ET AL., PETITIONERS v. WANDA GREENWOOD ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT [January 10, 2012] JUSTICE SCALIA delivered the opinion of the Court. We consider whether the Credit Repair OrganizationsAct (CROA), 15 U. S. … Continue reading

Arbitration Act, 1940-Sections 20 and 39(iv)-Arbitration and Conciliation Act, 1996-Sections 21 and 85(2)(a)-Application for appointment of arbitrator in terms of arbitration clause in case of dispute between parties-Trial Court holding that firm being unregistered as such application not maintainable even though applicant firm filed amendment application with regard to the same-High Court holding that since 1996 Act has come into force parties to relegate under the new Act-On appeal held : Since the arbitral proceedings commenced before coming into force of the 1996 Act, provisions of 1940 Act applicable and matter remitted to High Court-Furthermore firm must be registered at the time of the institution of the suit and not later-Also, the High Court is to consider the correctness of the order passed by trial court-Partnership Act, 1932- Section 69. Appellant-State Sugar Corporation and respondent-construction company entered into a contract. Dispute arose between the parties but the appellant did not appoint any arbitrator as per the arbitration clause in the contract. Respondent filed application under section 20 of the Arbitration Act, 1940. Civil Judge held it to be not maintainable as the respondent firm was not registered even though the respondent had admitted that it failed to make necessary averment in the plaint as regard registration of the firm inadvertently and had filed an application for amendment of the petition. Respondent then filed an appeal. High Court allowed the appeal directing that since the Arbitration and Conciliation Act, 1996 has come into force, parties are to relegate under the new Act Hence the present appeal. Appellant-State Sugar Corporation contended the application for appointment of an arbitrator was not maintainable under the 1940 Act and the 1996 Act as the respondent firm was not registered; and that in any event, the impugned judgment is unsustainable in law as the arbitral proceeding was initiated prior to coming into force of the 1996 Act. Respondent-firm contended that in a similar matter this Court directed the trial court to appoint an arbitrator in terms of arbitration clause of the contract between the parties, on remitting the matter, and as such there being a similar stipulation in the instant case, it must be acted upon. =Allowing the appeal, the Court HELD : 1.1. In the event it is found by the High Court that the Civil Judge was wrong in rejecting the application for amendment of the plaint and in fact the respondent-firm was registered under the Partnership Act, the question of throwing out the said suit on that ground would not arise. High Court would consider these questions. Further, it is true that the arbitral proceedings would not be maintainable at the instance of an unregistered firm having regard to the mandatory provisions contained in Section 69 of the Partnership Act, 1932. The firm must be registered at the time of institution of the suit and not later. [830-F-G] Delhi Development Authority v. Kochhar Construction Work and Anr., [1998] 8 SCC 559, relied on. Jagdish Chandra Gupta v. Kajaria Traders (India) Ltd., AIR (1964) SC 1882 and Firm Ashok Traders and Anr. v. Gurumukh Das Saluja and Ors., [2004] 3 SCC 155, referred to. 1.2. Disputes and differences between the parties arose in the year 1991 and the respondent filed an application under Section 20 of the Arbitration Act, 1940 in the same year. It invoked the arbitration clause in the agreement. The arbitral proceeding was set in motion. In terms of Section 21 of the Arbitration and Conciliation Act, 1996 the arbitral proceedings in respect of a particular dispute commences on a date on which the request for that dispute to be referred to arbitration was received by the respondent. Therefore, in respect of the arbitral proceedings commenced before coming into force of the 1996 Act, the provisions of the 1940 Act would apply. Hence, the matter is remitted to High Court for afresh consideration. [831-A-B; 832-A-B] Milkfood Ltd. v. M/s. GMC Ice Cream (P) Ltd., JT (2004) 4 SC 393, relied on. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5479 of 2004. =2004 AIR 4335, 2004(3 )Suppl.SCR826 , 2004(7 )SCC332 , 2004(7 )SCALE307 , 2004(7 )JT61

CASE NO.: Appeal (civil) 5479 of 2004 PETITIONER: U.P. State Sugar Corporation Ltd. RESPONDENT: Jain Construction Co. & Anr. DATE OF JUDGMENT: 25/08/2004 BENCH: N. Santosh Hegde & S.B. Sinha JUDGMENT: J U D G M E N T (Arising out of SLP (C) No.4459 of 2004) S.B. SINHA, J : Leave granted. This appeal … Continue reading

Contract Act, 1872: ss.4, 7 – Concluded contract containing arbitration clause – If respondent accepts the offer of petitioner following a very strict time schedule, he cannot escape from the obligations that flowed from such an action – Arbitration clause can be inferred from various documents duly approved and signed by the parties in the form of exchange of e-mails, letter, telex, telegrams and other means of tele-communication even in the absence of signed agreement – If no inference can be drawn from the facts that the parties intended to be bound only when a formal agreement had been executed, the validity of the agreement would not be affected by its lack of formality – On facts, the Commercial Offer carried no clause making the conclusion of the contract incumbent upon the Purchase Order -Therefore, the moment commercial offer was accepted by the respondent, the contract came into existence – Since the contract contained arbitration clause, petitioner made out case for appointment of arbitrator – Arbitration. Petitioner’s case was that on 15.10.2007, it submitted a commercial offer through e-mail for supply of Bauxite to the respondent. After exchange of several e-mails, respondent conveyed acceptance of offer through e-mail on 16.10.2007 confirming the supply of 5 shipments of Bauxite. Dispute arose and petitioner served arbitration notice on the respondent. Respondent rejected the arbitration notice stating that there was no concluded contract between them. Petitioner filed arbitration petition for appointment of arbitrator. = Allowing the arbitration petition, the Court HELD: 1.1. On 15.10.2007 at 4.26 p.m. the petitioner submitted commercial offer wherein clause 6 contained arbitration clause i.e. “this contract is governed by Indian law and arbitration in Mumbai courts”. At 5.34 p.m. though respondents offered their comments, no comments were made in respect of `arbitration clause’. At 6.04 p.m. the petitioner sent a reply to the comments made by the respondent. Again on 16.10.2007, at 11.28 a.m. though respondents suggested certain additional information on the offer note, again no suggestion was made with regard to arbitration clause. At 11.48 a.m. the petitioner sent an e-mail extending validity of the offer by another one hour. At 01.38 p.m., the respondent made certain suggestions on the demurrage asking the petitioner to either reduce the freight rate or the demurrage rate. On the same day at 02.01 p.m., the petitioner sent a reply on the demurrage stating that the rates cannot be reduced any further. At 02.41 p.m., the respondent informed the petitioner that they would like to have a termination clause after two shipments. At 03.06 p.m., the petitioner sent a mail stating that “no owner will accept this condition. Respondent may accept two or five quickly”. At 03.06 p.m. the respondent accepted the offer for five shipments. In response to the same at 03.49 p.m., the petitioner thanked the respondent for acceptance and conveyed that it was “just in time” to go to the ship owners. At 03.57 p.m. the petitioner finalized the contract with the bauxite supplier in Australia. Apart from the minute to minute correspondences exchanged between the parties regarding offer and acceptance, the offer of 15.10.2007 contained all essential ingredients for a valid acceptance by the respondents. The correspondence exchanged between the parties clearly go to show that after understanding all the details and the confirmation by the respondent, the petitioner sent a reply stating that “thanks for the confirmation, just in time to go to the ship owners”. All these details clearly establish that both the parties were aware of various conditions and understood the terms and finally the charter was entered into a contract by the parties on 17.10.2007. [Para 7] [859-H; 860-A-H; 861-A-D] 1.2. Once the contract is concluded orally or in writing, the mere fact that a formal contract has to be prepared and initialed by the parties would not affect either the acceptance of the contract so entered into or implementation thereof, even if the formal contract has never been initialed. When petitioner opened the email of the respondent at 3:06 PM on 16.10.2007, it came to his knowledge that an irrevocable contract was concluded. Apart from this, the mandate of Section 7 of the Indian Contract Act stipulated that an acceptance must be absolute and unconditional has also been fulfilled. It is true that in the first acceptance conveyed by the respondent contained a rider, namely, cancellation after 2 shipments which made acceptance conditional. However, taking note of the said condition, the petitioner requested the respondent to convey an unconditional acceptance which was readily done through his email sent at 3:06 PM with the words “we confirm the deal for 5 shipments”, which is unconditional and unqualified. The respondent was wholly aware of the fact that its agreement with the petitioner was interconnected with the ship owner. In other words, once the offer of the petitioner was accepted following a very strict time schedule, the respondent could not escape from the obligations that flowed from such an action. [Paras 9 and 10] [861-G-H; 862-A-G] Shankarlal Narayandas Mundade v. The New Mofussil Co. Ltd. & Ors. AIR 1946 PC 97, relied on. Pagnan SPA v. Feed Products Ltd. 1987 Vol. 2, Lloyd’s Law Reports 619; Mamidoil-Jetoil Greek Petroleum Co. S.A. v. Okta Crude Oil Refinery AD (2001) Vol. 2 Lloyd’s Law Reports 76 at p. 89; Wilson Smithett & Cape (Sugar) Ltd. v. Bangladesh Sugar and Food Industries Corporation (1986) Vol. 1 Lloyd’s Law Reports 378, referred to. 1.3. Unless an inference can be drawn from the facts that the parties intended to be bound only when a formal agreement had been executed, the validity of the agreement would not be affected by its lack of formality. In the present case, where the Commercial Offer carries no clause making the conclusion of the contract incumbent upon the Purchase Order, it is clear that the basic and essential terms have been accepted by the respondent, without any option but to treat the same as a concluded contract. A specific order for 5 shipments was placed and only some minor details were to be finalized through further agreement. After the suggested modifications had crystallized over several emails. The moment the commercial offer was accepted by the respondent, the contract came into existence. [Para 12] [864-B-E] Dresser Rand S.A. v. Bindal Agro Chem Ltd. (2006) 1 SCC 751, distinguished. 2. It is essential that the intention of the parties be considered in order to conclude whether parties were ad idem as far as adopting arbitration as a method of dispute resolution was concerned. In the absence of signed agreement between the parties, it would be possible to infer arbitration clause from various documents duly approved and signed by the parties in the form of exchange of e-mails, letter, telex, telegrams and other means of tele-communication. [Paras 14 and 17] [865-E-F; 866-C] Smita Conductors Ltd. vs. Euro Alloys Ltd. (2001) 7 SCC 728; Shakti Bhog Foods Limited vs. Kola Shipping Limited (2009) 2 SCC 134, relied on. 3. The petitioner has made out a case for appointment of an Arbitrator in accordance with Clause 6 of the Purchase Order dated 15.10.2007 and subsequent materials exchanged between the parties. Inasmuch as in respect of the earlier contract between the same parties, Justice B.N. Srikrishna, former Judge of this Court was adjudicating the same as an Arbitrator at Mumbai, it is but proper and convenient for both parties to have the assistance of the same Hon’ble Judge. Accordingly, Hon’ble Mr. Justice B.N. Srikrishna, former Judge of this Court is appointed as an Arbitrator to resolve the dispute between the parties. [Paras 20 and 21] [868-B-F] Great Offshore Ltd. v. Iranian Offshore Engg. & Construction Co., (2008) 14 SCC 240, relied on. Case Law Reference: 1987 Vol. 2, Lloyd’s referred to Para 11 Law Reports 619 (2001) Vol. 2 Lloyd’s Law Reports 76 referred to Para 11 (1986) Vol. 1 Lloyd’s Law Reports 378 referred to Para 11 (2006) 1 SCC 751 distinguished Para 12 AIR 1946 PC 97 relied on Para 11 (2001) 7 SCC 728 relied on Para 15 (2009) 2 SCC 134 relied on Para 16 (2008) 14 SCC 240 relied on Para 19 CIVIL ORIGINAL JURISDICTION : Arbitration Petition No. 10 of 2009. K.K. Venugopal, Gopal Sankara Narayanan, R. Subramanian, Vikas Mehta, Rohit Bhat for the Appellant. C.A. Sundaram, Rohini Musa, Abhishek Gupta, Zafar Inayat, Anandh Kannan, Binu Tamta for the Respondent.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION ARBITRATION PETITION NO. 10 OF 2009 Trimex International FZE Ltd. Dubai …. Petitioner(s) Versus Vedanta Aluminium Ltd., India …. Respondent(s) JUDGMENT P. Sathasivam, J. 1) In this petition the Petitioner-Company seeks to invoke arbitration clause under Section 11(6) of the Arbitration & Conciliation Act, 1996 … Continue reading

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