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Signature Of Either Party On The Arbitration Agreement Is Not Compulsory: Delhi High Court

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The Delhi High Court recently held that taking into consideration the language deployed in section 7(4) (b) there can be no doubt that, the signature of either party on the Arbitration Agreement is not mandatory. The Bench further ruled that an arbitration agreement need not be in a particular format, and a valid agreement could be constituted if it has all necessary attributes.

The Court was hearing petition under Section 11(6) of Arbitration and Conciliation Act sought the appointment of Sole Arbitrator to adjudicate the disputes arising from tax invoices issued by Petitioner. While some payment was made to the Petitioner but an amount of Rs 15,63,217 was outstanding.

The Single Judge bench of Justice Sanjeev Narula considered the language of Section 7(b) and held that there could not be any doubt that the signature of either on the Arbitration Agreement was not mandatory.

The Court also observed,” For any agreement, the real intent of the parties is germane. In the event the written arbitration agreement is not signed by the parties, it is essential to ascertain if there is an intention on the part of the parties to settle their disputes through arbitration. Since the terms and conditions printed on an invoice are generally inserted unilaterally by the party issuing the invoice, the Court had called upon SPL to validate the mutual intention of the parties to settle the disputes through arbitration. In fact, this precise question of inference of arbitration agreement on the touchstone of true intention of the parties or ‘consensus ad idem’ has engaged the Courts often.

The bench passed an ex-parte order favouring Swastik Pipe Ltd and proceeded to appoint Kanika Singh as the sole arbitrator to adjudicate the disputes arising between the parties. The parties were further directed to appear before the learned Arbitrator, as and when notified.

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