Arbitration clause incorporation in bill of lading upheld where printed terms were clearly made part of the contract.

An arbitration clause printed on a bill of lading can bind the parties where the document expressly incorporates all its printed terms and the reference to those terms is sufficiently clear under Section 7(5) of the Arbitration and Conciliation Act, 1996. The Supreme Court held that an arbitration agreement must be in writing but need not be signed, and that a party cannot rely on the bill of lading for its claim while rejecting the incorporated arbitration clause. The pendency of the suit at the evidence stage did not bar a Section 8 application. The clause was therefore treated as part of the contract and the dispute was referred to arbitration.

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Issues: Whether the arbitration clause printed on the bill of lading formed part of the contract between the parties so as to justify reference of the dispute to arbitration under the Arbitration and Conciliation Act, 1996.

Analysis: The bill of lading expressly stated that the merchant agreed to be bound by all terms, conditions, clauses and exceptions printed on it, including the arbitration clause. The respondent itself relied on the bill of lading as part of its cause of action in the suit and could not accept the document for one purpose while rejecting the arbitration clause for another. An arbitration agreement is required to be in writing, but it need not necessarily be signed. On the facts, the reference in the bill of lading was sufficient to incorporate the arbitration clause into the contract under Section 7(5). The pendency of the suit at the stage of evidence did not bar the Section 8 application.

Conclusion: The arbitration clause was held to be binding and part of the contract, and the dispute was liable to be referred to arbitration.

Final Conclusion: The appeals succeeded and the refusal to refer the parties to arbitration was set aside.

Ratio Decidendi: Where a contract expressly incorporates printed terms containing an arbitration clause, the clause becomes part of the contract even if the document is unsigned, provided the arbitration agreement is in writing and the reference is sufficiently clear under Section 7(5) of the Arbitration and Conciliation Act, 1996.

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