Case Note & Summary
The dispute arose between two companies regarding a Call Centre Services Agreement dated 09.12.2021. The petitioner, Riemen Solution Private Limited, sought the appointment of a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, after the respondent, Swiggy Limited, rejected the proposal to refer the dispute to arbitration. The petitioner argued that the arbitration clause contained all essential attributes of an arbitration agreement, while the respondent contended that the clause was conditional and did not create an obligation to arbitrate. The court analyzed the language of the arbitration clause, which stated that disputes would be submitted to arbitration only if mutually agreed upon by the parties. The court referred to established legal principles and precedents, including the Supreme Court's decisions in Jagdish Chander and Nagreeka Indcon Products, emphasizing that a binding arbitration agreement requires a clear intention to arbitrate without the need for further consent. The court concluded that the clause did not constitute a presently binding arbitration agreement, as it required mutual agreement for submission to arbitration, which was not established. Consequently, the court dismissed the petition, holding that the jurisdiction under Section 11 could not be invoked in the absence of a binding arbitration agreement.
Headnote
A) Arbitration Law - Validity of Arbitration Agreement - Conditional Submission to Arbitration - Arbitration and Conciliation Act, 1996, Section 7 - The clause requiring mutual agreement for arbitration does not constitute a binding arbitration agreement as it merely contemplates future consent rather than an unconditional obligation to arbitrate. Held that the absence of mutual agreement precludes the invocation of arbitration (Paras 60-66).
Issue of Consideration
Whether the stipulation that the dispute shall, ‘if mutually agreed upon by the parties’, be submitted for arbitration constitutes a valid and binding arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996?
Final Decision
The Civil Miscellaneous Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 was dismissed. The court held that the clause did not constitute a presently binding arbitration agreement, as it required mutual agreement for submission to arbitration, which was not established.
Law Points
- Arbitration agreement
- Section 11(6) Arbitration and Conciliation Act
- 1996
- mutual consent
- binding arbitration
- intention to arbitrate
