Section 45 - The Legal Chamber

The Supreme Court held that Part I of the Arbitration & Conciliation Act, 1996, including Section 11, does not apply to a foreign-seated international commercial arbitration. The arbitration clause in the principal "mother agreement" governs, and subsequent ancillary contracts with different parties cannot novate it or confer jurisdiction on Indian courts. Facts Of The Case: The petitioner, Balaji Steel Trade, entered into a Buyer and Seller Agreement (BSA) dated 06.06.2019 with respondent no. 1, Fludor Benin S.A., for the supply of cottonseed cake, containing an arbitration clause specifying arbitration in Benin. An Addendum was later executed. Subsequently, respondent no. 1 assigned its supply obligations. The petitioner then entered into separate Sales Contracts with r...

This Supreme Court judgment reaffirms that a valid arbitration agreement can be constituted through conduct and correspondence, without a signed contract. The Supreme Court held that if parties have demonstrably acted upon the terms of an unsigned agreement, they are bound by its arbitration clause, and a referral court need only conduct a prima facie review of the agreement's existence. Facts Of The Case: The dispute arose from a proposed contract for the sale of 6,000 metric tons of zinc metal between Glencore International AG (Appellant) and Shree Ganesh Metals (Respondent No.1). The terms were negotiated via email, and Glencore sent a formal contract (No. 061-16-12115-S) incorporating an arbitration clause, which it signed. The Respondent, however, never signed this document. Despite...

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Supreme Court Ruling : Businesses Take Note ,Email Exchanges Can Create a Binding Arbitration Agreement