Enabling articles and tender terms do not create arbitration unless the contract contains a written arbitration agreement.

A company's objects, articles and tender conditions that merely empower the board to refer disputes to arbitration do not, by themselves, bind the company to arbitrate or give the contractor an automatic right to demand arbitration. Section 36 of the Companies Act, 1956 makes articles binding on the company and its directors, but does not require arbitration in every contract. An arbitration agreement must also be in writing under Section 7 of the Arbitration and Conciliation Act, 1996; absent a contract signed by both parties containing an arbitration clause, or a written incorporation of such clause, no enforceable arbitration agreement arises.

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Issues: (i) Whether the respondent-company was bound to refer the dispute to arbitration by reason of its memorandum, articles, and tender conditions; (ii) Whether there was a written arbitration agreement between the parties.

Issue (i): Whether the respondent-company was bound to refer the dispute to arbitration by reason of its memorandum, articles, and tender conditions.

Analysis: The provisions in the company's objects and articles empowering the board to refer disputes to arbitration were held to be merely enabling. Section 36 of the Companies Act, 1956 was understood as making the articles binding on the company and its directors, but not as compelling the company to insert an arbitration clause in every contract or as conferring an automatic right on the contractor to demand arbitration. The tender conditions referring to court jurisdiction at Trivandrum did not create an arbitration mandate, and the reference to standard specifications did not import all their provisions into the contract.

Conclusion: The respondent-company was not bound to refer the dispute to arbitration.

Issue (ii): Whether there was a written arbitration agreement between the parties.

Analysis: Section 7 of the Arbitration and Conciliation Act, 1996 requires an arbitration agreement to be in writing. The Court found that no contract signed by both parties containing an arbitration clause was produced. The company's objects, articles, tender notice, and standard specifications could not, without more, amount to a written arbitration agreement between the parties. The contract itself did not contain an arbitration clause.

Conclusion: There was no written arbitration agreement between the parties.

Final Conclusion: The appeal failed because no enforceable basis was shown for compelling arbitration, and the dismissal of the writ petition was affirmed.

Ratio Decidendi: A mere enabling power in a company's objects or articles, or a reference in tender documents or standard specifications, does not create a binding arbitration agreement unless the contract itself contains a written arbitration clause or a written agreement incorporating one.

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