Case Note & Summary
The case involved a dispute between a private company and a medical institute regarding the existence of an arbitration agreement following a tender for the supply of medical equipment. The appellant, M/s. Unissi (India) Pvt. Ltd., submitted a tender for Pulse Oxymeters, which was accepted by the Post Graduate Institute of Medical Education and Research (PGI). Although the appellant signed an agreement containing an arbitration clause, the PGI did not sign it, leading to a dispute over payment for the supplied equipment. The PGI claimed no agreement existed and forfeited the earnest money. The appellant sought the appointment of an Arbitrator under Section 11(4)(a) of the Arbitration and Conciliation Act, 1996, but the Additional District Judge dismissed the application, stating no arbitration agreement was executed. The Supreme Court, upon reviewing the case, noted that the tender documents included an arbitration clause and that the PGI had accepted the tender and used the equipment. The court found that an arbitration agreement existed despite the lack of a formal signed document and directed the appointment of an Arbitrator to resolve the dispute, overturning the lower court's decision. The appeal was allowed with no order as to costs.
Headnote
A) Arbitration Law - Existence of Arbitration Agreement - Validity of Arbitration Agreement - Arbitration and Conciliation Act, 1996, Section 7 - The court held that despite the absence of a formal agreement, the tender documents containing an arbitration clause constituted a valid arbitration agreement as the tender was accepted and acted upon by both parties. The court directed that the matter be referred to an Arbitrator for resolution of the dispute (Paras 12-14).
Issue of Consideration
Whether an arbitration agreement existed between the parties for the appointment of an Arbitrator.
Final Decision
The Supreme Court set aside the order of the Additional District Judge, held that an arbitration agreement existed, and directed the appointment of an Arbitrator to resolve the dispute.
Law Points
- Arbitration agreement existence
- Section 11 Arbitration and Conciliation Act
- 1996
- Tender documents as arbitration agreement
- Acceptance of tender
- Non-execution of formal agreement
