No Arbitration Without Clear Agreement: When Does a Dispute Clause Become Binding? Supreme Court’s Latest Verdict Explained
The Supreme Court held that Clause 13 of the contract, which stated disputes "may be sought through arbitration," did not constitute a binding arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996. The use of "may" indicated no mandatory intent to arbitrate, requiring further mutual consent. The Court emphasized that an arbitration agreement must reflect a clear, unequivocal commitment to resolve disputes through arbitration, excluding domestic courts. Mere enabling language without obligation is insufficient. The High Court’s dismissal of the arbitration application was upheld.
Facts Of The Case:
The dispute arose between BGM & M-RPL-JMCT (JV) (Appellant) and Eastern Coalfields Limited (Respondent) over a contract for transportation/handling of goods. T...
