Arbitration clause incorporated by reference in standard terms when purchase order made those terms part of the bargain.

An arbitration clause in standard form terms can be incorporated by reference where the contract clearly shows that the parties intended those terms to govern the transaction. A mere general reference to a separate earlier contract is ordinarily insufficient to incorporate its arbitration clause, but a single commercial contract incorporating attached standard terms is different because the parties are taken to accept those terms as part of the bargain. Here, the purchase order expressly made supply subject to its terms and the attached standard terms and conditions, which the other party accepted except for the delivery period. The arbitration clause in those standard terms was therefore available for invocation, and refusal to appoint an arbitrator was incorrect.

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Issues: Whether the arbitration clause contained in the standard terms and conditions attached to the purchase order stood incorporated into the contract by a general reference, so as to warrant appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Analysis: The applicable principle is that an arbitration clause in another document is incorporated only when the contract clearly refers to that document and the reference shows an intention to incorporate the clause; a mere general reference to a different earlier contract is ordinarily insufficient. The Court distinguished between two-contract cases and single-contract cases, and held that where the contract incorporates standard form terms, general reference is enough because the parties are expected to be familiar with those terms. The purchase order here specifically stated that supply would be governed by its terms and the attached standard terms and conditions, and the respondent accepted those terms apart from delivery period. The standard terms were part of a single commercial contract, and the arbitration clause in those standard terms was therefore available for invocation.

Conclusion: The arbitration clause stood incorporated by reference, and the refusal to appoint an arbitrator was incorrect.

Ratio Decidendi: In a single-contract situation involving standard form terms, a general reference to those terms is sufficient to incorporate the arbitration clause, whereas a general reference to a separate earlier contract does not suffice unless there is a specific reference to the arbitration clause.

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