Tuesday, 20 November 2018

Whether arbitration clause can be inferred from correspondence between the parties?

The learned counsel for the Appellant also submitted that
the Appellant did not sign the Charter Party and cannot be
treated as a party to the agreement. There is no dispute that
the contract is governed by the English law under which there

is no requirement for the Charter Party to be signed by the
parties to make it binding. We have no doubt in approving the
conclusion of the High Court on this point and rejecting the
submission made on behalf of the Appellant. Abundant
material was examined by both the Arbitrator and the High
Court to record a finding that there existed a valid arbitration
agreement. Article II of the First Schedule of the Act defines
arbitration agreement as including an arbitral clause in a
contract or an arbitration agreement, signed by the parties or
contained in an exchange of letters or telegrams. The High
Court found that the Charter Party which contained the
arbitration agreement was agreed to and entered upon by the
parties and the same is supported by the correspondence
between the parties. The term “agreement in writing” in
Article II is very wide. An arbitral clause need not necessarily
be found in a contract or an arbitral agreement. It can be
included in the correspondence between the parties also. In
the present case the arbitration agreement is found in the
Charter Party which has been accepted by both the Arbitrator
and the High Court. We see no reason to differ from the view
taken by the High Court on this point.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No .4834 of 2007

P.E.C. LIMITED Vs AUSTBULK SHIPPING SDN BHD


L. NAGESWARA RAO, J.
Dated:NOVEMBER 14, 2018.
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