An arbitration clause in unsigned invoice would still be a valid arbitration agreement if both parties are shown to have acted and accepted the conditions stipulated in the invoice

In the matter of Swastik Pipe Ltd. vs. Shri Ram Autotech Pvt. Ltd. in ARB. P. No. 241/2021 decided on 05.07.2021 by the Delhi High Court.

Facts:
Disputes arose between the parties due to non-payment tax invoices raised by the Petitioner against supply of materials to the Respondent. The petitioner contended that the arbitration clause contained in the invoice constituted a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996. From the record, it could be seen that the invoice containing the arbitration agreement was not signed by the Respondent.
The question before the Court was – whether terms and conditions appearing on an invoice accompanying a delivery of goods would constitute a valid agreement between the parties even if the particular document containing such agreement was not signed by both parties.

Held:
First and foremost, the Delhi High Court observed that the Respondent duly received the goods from the petitioner under a goods receipt and hence, it was prima facie established that the transaction of supply of goods did take place.
The Court examined Section 7 of the Arbitration and Conciliation Act, 1996 and observed that arbitration agreement is required to be in writing. However, Section 7(4) of the Arbitration Act reflects that the legislature intended to include a written document not signed by the parties, within the ambit of a valid arbitration agreement, as Section 7(4)(b) provides that an arbitration agreement can be in the nature of exchange of communication, which provides a record of the agreement in writing. Taking into consideration the language deployed in the aforesaid provision, there can be no doubt that, the signature of either party on the Arbitration Agreement is not mandatory.
Moreover, the provision noted above manifests that an arbitration agreement need not be in a particular form, and a valid agreement can be constituted if it has all the necessary attributes.
In the facts of the present case, the Court noted that there is sufficient material on record to establish that the condition/clause in the invoices were accepted and acted upon and the parties were ad idem, and arbitration agreement could be safely inferred. Furthermore, the Respondent had wilfully chosen not to participate in the proceedings and hence, the petitioner’s assertion of existence of arbitration agreement remained unrebutted.