Whether arbitration agreement not signed by parties is valid?

Learned counsel for the respondent – plaintiff
further   submitted   that   in   view   of   Section   7   of   the
Arbitration and Conciliation Act, 1996, unless and until
the   written   document   is   signed   by   both   the   sides,
arbitration agreement cannot come into existence.   This
proposition is not at all acceptable.   The provision of
Section 7 of the Arbitration and Conciliation Act, 1996,
is as under:­
   “7. Arbitration agreement ­ 
(1) In this Part, "arbitration agreement" means
an   agreement   by   the   parties   to   submit   to
arbitration all or certain disputes which have
arisen   or   which   may   arise   between   them   in
respect   of   a   defined   legal   relationship,
whether contractual or not.
(2) An arbitration agreement may be in the form
of   an   arbitration   clause   in   a   contract   or   in
the form of a separate agreement.
(3)   An   arbitration   agreement   shall   be   in

writing.
(4) An   arbitration   agreement   is   in   writing   if
it is contained in­
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or
other means of telecommunication which provide
a record of the agreement; or
(c)   an   exchange   of   statements   of   claim   and
defence in which the existence of the agreement
is alleged by one party and not denied by the
other.
(5) The reference in a contract to a document
containing an arbitration clause constitutes an
arbitration   agreement   if   the   contract   is   in
writing   and   the   reference   is   such   as   to   make
that arbitration clause part of the contract.”
11] Section   7(1)   of   the   Act   gives   the   meaning   of
arbitration agreement.  In Section 7(2), it is mentioned
that arbitration agreement may be in the form of a clause
in the contract itself or it may be in a separate form or
a separate agreement. Section 7(3) shows that arbitration
agreement needs to be in writing.  Thus, it can be said
that in Section 7(3), it is made clear that arbitration
agreement should be in writing but this sub­section does
not show that unless and until it is signed by both the
sides,   the   agreement   will   not   come   into   existence.

Section   7(4)   gives   the   meaning   of   written   agreement.
Sub­section 4(a) shows that it can be inferred that it is
an   written   agreement   if   a   document   is   signed   by   the
parties.   Sub­section 4(b) shows that written agreement
can   come   into   existence   by   exchange   of   letter,   telex,
telegrams   or   other   means   of   telecommunication   which
provide   a   record   of   the   agreement.     Sub­section   4(c)
shows that arbitration agreement can come into existence
by   exchange   of   statements   of   claim   and   defence   also.
Thus,   when   the   purchase   order   is   placed,   as   in   the
present   case,   the   matter   will   fall   u/s   7(4)(b).     This
sub­section   does   not   show   that   there   needs   to   be
signature of other party.  In the present matter, written
order like purchase order was given by the defendant to
the plaintiff and the order provided that it was upto the
plaintiff   either   to   accept   or   not   to   accept   this
proposal.  As the supply was made by the plaintiff as per
this order and there is specific admission in that regard
in   the   plaint,   it   needs   to   be   presumed   that   the   offer
given by the defendant was accepted by the plaintiff and
this acceptance was for all the terms and conditions of
the contract.  It is already observed that the terms and

conditions of the contract can be found in the purchase
order and in Annexure 'A'.
12] The   aforesaid   position   of   law   and   facts   and
circumstances of present case show that the trial Court
has committed  error in  observing  that  signature of  the
plaintiff was necessary on this document and as signature
is not there, there was no agreement to refer the dispute
to arbitrator.  This objection was taken prior to filing
of   written   statement   as   provided   in   Section   8   of   the
Arbitration and Conciliation Act, 1996 by the defendant.
In view of these circumstances, it is necessary for the
parties   to   refer   the   dispute   to   Arbitral   Tribunal   as
provided in the aforesaid clauses of the contract.  It is
not possible for Civil Court to directly refer the matter
to   arbitrator   as   the   procedure   as   laid   down   in   the
aforesaid clauses need to be followed by the parties to
the contract.   Thus, there is no other alternative than
to   return   the   plaint   for   referring   the   matter   to
arbitrator.  
                     
      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                     BENCH AT AURANGABAD      
              
      CIVIL REVISION APPLICATION NO.134/2015
Indus Towers Limited,

                         V
Sow.Ashatai w/o Bapurao Kagne,

CORAM: T.V. NALAWADE, J.
  
DATE:  18.11.2015
Citation: 2016(6) ALLMR 877

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