Case Note & Summary
The applicant, Omkar Realtors & Developer Private Limited, filed a Commercial Arbitration Application under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to resolve disputes arising from a redevelopment project with the respondent, The Tenants Co-Operative Housing Society Ltd. The respondent had floated a Tender for redevelopment on 09.02.2012, and the applicant's bid was accepted on 29.09.2012. A Letter of Intent was issued on 06.07.2013, but disputes arose regarding the progress of redevelopment, leading to a termination letter on 25.03.2019. The applicant invoked arbitration based on a clause in the Tender that provided for settlement of disputes. The court examined whether this clause constituted an arbitration agreement under Section 7 of the Act. The court noted that the clause did not contain the essential elements of an arbitration agreement, such as a clear intention to refer disputes to arbitration, and was not signed by the parties as an arbitration agreement. The court held that the Tender clause was merely a dispute resolution clause without specifying arbitration, and there was no separate arbitration agreement. Therefore, the application was dismissed, and no arbitrator was appointed.
Headnote
A) Arbitration Law - Existence of Arbitration Agreement - Section 7 Arbitration and Conciliation Act, 1996 - The court considered whether a clause in a Tender for redevelopment work providing for settlement of disputes could be construed as an arbitration agreement. The court held that the clause did not contain the essential elements of an arbitration agreement, namely, an agreement in writing signed by the parties to refer disputes to arbitration. The Tender clause merely provided for settlement of disputes without specifying arbitration, and there was no separate arbitration agreement between the parties. Consequently, the application for appointment of an arbitrator was dismissed. (Paras 1-15)
Issue of Consideration
Whether a clause in a Tender providing for settlement of disputes constitutes an arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court dismissed the application, holding that the Tender clause did not constitute an arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996, and therefore no arbitrator could be appointed.
Law Points
- Arbitration agreement must be in writing and signed by parties
- Tender clause not an arbitration agreement
- Section 7 Arbitration and Conciliation Act
- 1996
