Arbitration clause in tender conditions applies only after contract formation; pre-order disputes cannot be referred to arbitration.

A tender document is only an invitation to offer and does not, by itself, create a contract or an arbitration agreement. Where the bid documents separate the tender stage from the contract stage, and the arbitration clause in the general conditions is intended to operate only after a purchase order is issued, disputes arising before placement of such order remain outside arbitration. As the claim concerned alleged loss from non-placement of further purchase orders and no contract had come into existence for the disputed quantity, the Section 11(6) application was not maintainable and the claim could not be referred to arbitration.

---

---

Issues: Whether an arbitration agreement existed between the parties so as to sustain an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 in respect of a claim arising from non-placement of a purchase order under the tender process.

Analysis: The bid documents distinguished between the tender stage and the contract stage. The instructions to bidders governed the bidding process and expressly conferred civil court jurisdiction for disputes arising out of the tender till placement of purchase orders, while the general conditions of contract, including the arbitration clause, were intended to operate only after a purchase order was issued and a contract came into existence. A tender document is only an invitation to offer and does not, by itself, create a contract or an arbitration agreement. Since the claim related to alleged loss caused by failure to award further quantities and no purchase order had been placed for the disputed quantity, there was no contract and the arbitration clause in the general conditions never became operative for that dispute.

Conclusion: No arbitration agreement existed for the dispute in question, and the application under Section 11(6) was not maintainable. The claim could not be referred to arbitration.

Ratio Decidendi: An arbitration clause embedded in bid conditions becomes enforceable only when the contemplated contract comes into existence, and it cannot be invoked for a pre-contract or tender-stage dispute in the absence of a purchase order or other completed contract covering the disputed claim.

---