TaxTMI 
TaxTMI 
2025 (8) TMI 1394
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....ispute in connection with that contract would be referred to arbitration to be resolved under the Rules of the London Court of International Arbitration and the seat of the arbitration would be London. 5. The parties then proposed to enter into a fifth contract, whereby respondent No.1 was to buy 6,000 metric tons of zinc metal from the appellant from March, 2016 to February, 2017. The terms and modalities of this contract were sought to be worked out between the parties. In that context, the appellant addressed email dated 10.03.2016 to respondent No.1. Therein, it stated that the provisional price would be the London Metal Exchange (LME) average of 10 market days prior. It stipulated that a Standby Letter of Credit was to be opened in form and substance fully acceptable to the appellant for the entire contractual period. It further stipulated that all other terms and conditions, as per the last contract between the parties, would remain intact. Respondent No.1 replied, vide email dated 11.03.2016, wherein it stated as follows: "We confirm the same terms as said just one thing that provisional price of both, either LC or Invoice, will be average of last 5 (five) LME da....
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....ute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the London Court of International Arbitration, which Rules are deemed to be incorporated by reference into this clause. The seat, or legal place, of arbitration shall be London. The language to be used in the arbitration shall be English. The parties waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority." 9. It is an admitted fact that respondent No.1 did not affix its signatures upon Contract No.061-16-12115-S. However, it is also an admitted fact that 2,000 metric tons of zinc metal were supplied by the appellant and accepted by respondent No.1 under the aforestated contract leading to the raising of 8 invoices by the appellant on various dates during the months of April, May, June, September, October and November, 2016. All these invoices referred to Contract No.061-16- 12115-S. Further, at the behest of respondent No.1, HDFC Bank, respondent No.2 herein, issued two separate Standby Letters of Credit dated 22.0....
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....to resume deliveries under the contract. It again requested respondent No.1 to furnish a Letter of Credit for the September, 2016 quota, enabling it to deliver the material allocated for that quota. 13. At this stage, respondent No.1 filed a civil suit in CS (Comm) No. 154 of 2017 before the Delhi High Court. Its prayer therein was to declare that the invocation of the Standby Letters of Credit dated 22.04.2016 and 17.11.2016 by the appellant was null and void; to pass a decree for recovery of US$1,200,000 ( 8 Rs. crores approximately) in its favour and against the appellant, along with interest thereon @ 18% per annum; to permanently injunct the appellant from invoking the Standby Letters of Credit dated 22.04.2016 and 17.11.2016; and, in turn, injunct the HDFC Bank from releasing any payment in favour of the appellant pursuant to the said Letters of Credit. 14. The appellant, thereupon, filed I.A. No. 4550 of 2017 in the civil suit invoking Section 45 of the Arbitration and Conciliation Act, 1996 (for brevity, 'the Act of 1996'), and requested that the matter be referred to arbitration in terms of clause 32.2 of Contract No. 061-16-12115-S. Respondent No.1 contested this ap....
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....wever, by way of the impugned judgment dated 14.11.2019, a Division Bench of the Delhi High Court concurred with the view taken by the learned Judge and dismissed the appeal. The Division Bench noted that the short question which arose for consideration was as to whether or not the arbitration agreement between the parties in terms of clause 29.2 of the contract of 2012 would apply to the disputes which had arisen between the parties with regard to the supplies to be made between March, 2016 and February, 2017. Surprisingly, the Division Bench failed to frame an issue with regard to the arbitration agreement under clause 32.2 of Contract No. 061-16- 12115-S, despite a specific argument being advanced on behalf of the appellant in that regard, as noted in paragraph 13 of the judgment. The Division Bench found that there was nothing on record which clearly showed that respondent No.1 gave its acceptance to enter into the contract of 2016 as per the standard terms and conditions of the contract of 2012 and observed that the contract of 2016 was not a standard form contract. Holding so, the Division Bench opined that there was no infirmity in the decision of the learned Judge and dismi....
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.... amended Letter of Credit on 02.07.2016. All these Letters of Credit were issued by HDFC Bank, respondent No.2, at the behest of respondent No.1, quoting Contract No. 061-16-12115-S. The exchange of correspondence by and between the appellant and respondent No.1 also contained references to the very same Contract No. 061-16-12115- S. 21. The feeble plea of respondent No. 1 that this contract number was referred to in the context of the earlier email correspondence does not merit consideration as that contract number came into existence only after the exchange of email correspondence on 10.03.2016 and 11.03.2016. It is also significant to note that even in the course of this email correspondence, respondent No.1 indicated its concurrence with the terms and conditions proposed by the appellant in its email dated 10.03.2016 by way of its reply email dated 11.03.2016, wherein it suggested only one modification, i.e., with regard to the provisional price being on the basis of the average of the last 5 LME days instead of the last 10 LME days, as proposed by the appellant. It was pursuant to such confirmation by respondent No.1 that the appellant thanked it for the business confirmati....
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....riate forum to conduct a mini-trial by allowing the parties to adduce evidence in regard to the existence or validity of an arbitration agreement, as the same ought to be left to the Arbitral Tribunal. The view expressed earlier in Shin-Etsu Chemical Co. Ltd. vs Aksh Optifibre Ltd. and another (2005) 7 SCC 234 was reaffirmed and reiterated. In that case, this Court was called upon to determine the nature of the adjudication contemplated by the unamended Section 45 of the Act of 1996, when an objection with regard to the arbitration agreement being null and void was raised before a judicial authority. It was held therein that Section 45 of the Act of 1996 did not require the judicial authority to give a final determination as, even if the Court takes a view that the arbitral agreement was not vitiated based upon purely a prima facie view, nothing prevents the Arbitral Tribunal from trying the issue fully and rendering a final decision thereupon. 25. Reliance was sought to be placed by the learned senior counsel for respondent No. 1 on M.R. Engineers and Contractors Pvt. Ltd. vs. Som Datt Builders Ltd (2009) 7 SCC 696. Therein, this Court considered Section 7(5) of the Act o....
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.... "16. On reading the provisions it can safely be concluded that an arbitration agreement even though in writing need not be signed by the parties if the record of agreement is provided by exchange of letters, telex, telegrams or other means of telecommunication. Section 7(4)(c) provides that there can be an arbitration agreement in the exchange of statements of claims and defence in which the existence of the agreement is alleged by one party and not denied by the other. If it can be prima facie shown that the parties are at ad idem, then the mere fact of one party not signing the agreement cannot absolve him from the liability under the agreement. In the present day of e-commerce, in cases of internet purchases, tele purchases, ticket booking on internet and in standard forms of contract, terms and conditions are agreed upon. In such agreements, if the identity of the parties is established, and there is a record of agreement it becomes an arbitration agreement if there is an arbitration clause showing ad idem between the parties. Therefore, signature is not a formal requirement under Section 7(4) (b) or 7(4)(c) or under Section 7(5) of the Act. ........... ....