Arbitration clause incorporation requires clear reference; an exclusive civil-court clause can displace prior arbitration terms.

An arbitration clause in an earlier tender document is incorporated into a later Letter of Intent only if the later contract makes a conscious and specific reference showing an intention to adopt that clause. A general reference to prior terms is not enough under Section 7(5) of the Arbitration and Conciliation Act, 1996. Here, the Letter of Intent instead provided for disputes to be resolved exclusively by civil courts in Delhi, which displaced any inference that the earlier arbitration clause had been incorporated. The appointment of a Sole Arbitrator under Section 11(6) was therefore unsustainable.

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Issues: Whether the arbitration clause in the earlier tender documents stood incorporated into the Letter of Intent by reference so as to justify appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Analysis: Section 7(5) of the Arbitration and Conciliation Act, 1996 requires a conscious and clear reference to a document containing an arbitration clause before that clause can become part of the contract. A general reference to another contract does not, by itself, incorporate the arbitration clause from the referred document. The contract in the present matter was a two-contract arrangement, and the Letter of Intent expressly provided that disputes would be resolved only through civil courts having jurisdiction in Delhi. That clause, being part of the agreement, displaced any inference of incorporation of the earlier arbitration clause, and there was no specific reference showing an intention to adopt that clause.

Conclusion: The arbitration clause was not incorporated by reference, and the appointment of the Sole Arbitrator under Section 11(6) was unsustainable.

Ratio Decidendi: In a later contract, an arbitration clause contained in an earlier document is incorporated only by a clear and specific reference showing an intention to make that clause part of the contract; a general reference to the earlier terms is insufficient, especially where the later contract provides an exclusive civil-court dispute forum.

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