05 July 2021 | Swastik Pipe Ltd. v. Shri Ram Autotech Pvt. Ltd. Arb. P. 241 of 2021| Sanjeev Narula J | 2021 SCC OnLine Del 3604

An unsigned invoice contained an arbitration clause, based on which Swastik applied for the appointment of an arbitrator. The respondent was unrepresented throughout.

Narula J noted that an arbitration agreement within the meaning of Section 7 ACA could be unsigned. But, “since the terms and conditions printed on an invoice are generally inserted unilaterally by the party issuing the invoice”, was there a mutual intention to be bound by the arbitration clause?

In answer, Narula J examined the law on what constitutes intent. Then, he fell back on the proposition that an arbitration agreement could be contained in an exchange of communication [Section 7 (4) (b) ACA] or exchange of statement of claim and defence [Section 7 (4) (c) ACA].

He appointed an arbitrator reasoning as follows:-

1. Because the respondent did not appear, the consequence is that the assertion of the existence of the arbitration agreement is unrebutted.
2. The notice of arbitration was served, but there was no response. So, the assertion that there is an arbitration agreement stood not denied.
3. The parties had been transacting for some time, and some of the invoices raised were paid during the same time (as the dispute) and thus acted upon. Therefore, it could be safely inferred, prima facie, that parties were ad idem as to the arbitration agreement too.
4. The final decision on the existence of the arbitration agreement is in the domain of the arbitrator.

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