Calcutta High Court
Super Smelters Limited vs Universal Cables Limited on 30 June, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
2025:CHC-OS:97
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
Present:-
Hon'ble Justice Shampa Sarkar
AP-COM 470 OF 2024
SUPER SMELTERS LIMITED
VS
UNIVERSAL CABLES LIMITED
For the Petitioner : Mr. Kumarjit Banerjee, Adv
Ms. Sanchari Chakraborty, Adv.
Mr. Akanksha Chowdhury, Adv.
Mr. Samriddha Saha, Adv.
For the Respondent : Mr. Narendra Sharma Adv.
Mr. Deva Anand Misra, Adv.
Mr. Prashant Kr. Singh, Adv.
Hearing concluded on : 10.06.2025
Judgment on : 30.06.2025
Shampa Sarkar, J.
1. This is an application for appointment of an Arbitrator in terms of
Clause 6 of the purchase order dated September 6, 2019. The purchase
order was issued by the petitioner’s establishment, namely, Jamuria
Industrial Estate, Rajaram Danga, Aam Bagan, Jamuria, Burdwan. The
petitioner is engaged, inter alia, in the business of manufacture of various
iron alloy and steel products. The respondent is inter alia, engaged in the
business of manufacture of paper insulated cables.
2. The case run by the petitioner is that, on May 31, 2019, the petitioner
floated a tender, inviting quotations for design, manufacture, supply, testing
2
2025:CHC-OS:97
and commissioning of capacitor power factors improvement, also known as
real time power factor (hereinafter referred to as capacitor panels) for its
plant at Jamuria. The respondent participated in the tender and submitted
its commercial offer. On August 30, 2019, the petitioner informed the
respondent that the proposal/bid submitted by the respondent had been
approved. Accordingly, a purchase order bearing no. P119Y-00458, dated
September 6, 2019, was issued in favour of the respondent. According to the
petitioner, the respondent accepted the said purchase order without any
demurer or dispute.
3. The petitioner contended that the respondent acted in terms of the
purchase order and issued an invoice for advance payment of 10% of the
value of purchase order, amounting to a sum of Rs. 16,70,000/-. The
payment was made by the petitioner on February 24, 2020. The respondent
thereafter submitted its drawing and the petitioner approved the same by
email dated February 7, 2020. Upon receipt of the aforementioned approval
of the drawing, the respondent issued a further invoice on February 8, 2020,
for a sum of Rs. 16,70,000/-, towards further payment of 10% against the
acceptance of the drawing. The amount was paid by the petitioner on June
19, 2020. On October 14, 2020, the respondent further informed the
petitioner that the capacitor panels were ready for dispatch. A further
invoice dated October 14, 2020, for payment of 70% of the purchase order
amounting to Rs. 1,46,96,000/- was raised. The amount was paid by the
petitioner on January 5, 2021.
4. According to the petitioner, on January 15, 2021 the aforementioned
capacitor panels were dispatched by the respondent and the same were
3
2025:CHC-OS:97
received on January 23, 2021. Accordingly, a ‘Goods Received Note’ dated
January 23, 2021, was generated against the purchase order. During the
trial run at the petitioner’s HSM division of the Jamuria plant, various
issues arose in respect of all the eight capacitor panels which had been
received on January 23, 2021. On March 18, 2021, in the presence of the
respondent, the petitioner tried to commence the operations of the said
capacitor panels, but they were found to be malfunctioning. The issue was
brought to the notice of the respondent by the petitioner and several
meetings were held between the representatives of the parties between
December 2, 2021 and September 16, 2022. Allegedly, the respondent
assured the petitioner that the dispute would be resolved and the capacitor
panels would be made functional to their optimum level, but the respondent
failed to discharge its obligations under the said purchase order, by curing
the defects. On the other hand, the respondent made allegations with
regard to the electrical system of the plant and refused to replace the
defective parts of the capacitor panels. The petitioner alleged that under the
purchase order, the respondent was liable to replace 100% of the defective
capacitor panels within three years of commissioning. Such term was
stipulated in the guarantee clause.
5. The grievance of the petitioner was not solved till November, 2023.
They did not make any effort to replace that defective capacitor panels which
had been supplied. Finding no other alternative, the petitioner terminated
the purchase order by a termination letter issued via email on December 14,
2023. The petitioner demanded refund of the entire consideration sum paid,
amounting to Rs. 1,97,06,000/-, together with interest at the rate of 24%
4
2025:CHC-OS:97
per annum from January 23, 2021 till the date of actual payment. The
respondent replied to the termination letter, and denied and disputed the
contents thereof. On the other hand, the respondent made a demand for a
further sum of money.
6. Thus, the differences arose between the parties and the petitioner
invoked the arbitration clause, by a letter dated January 12, 2024. In reply
to the petitioner letter dated January 12, 2024, the respondent by a letter
dated February 20, 2024, raised various objections and sought to dispute
the arbitration clause itself, by relying on a jurisdiction clause contained in
the tax invoice dated January 13, 2021, issued by the respondent, pursuant
to the purchase order. The letter issued by the respondent was a refusal to
refer the dispute to arbitration as per purchase order dated September 6,
2019. The petitioner contended that the purchase order was a binding
contract.
7. Thereafter, this application was filed for appointment of a sole
arbitrator, in terms of the arbitration clause in the purchase order. The
petitioner contended that parties submitted to Kolkata jurisdiction.
8. Mr. Kumarjit Banerjee learned Advocate for the petitioner submitted
that the purchase order dated September 6, 2019 was forwarded by the
petitioner to the respondent vide email dated October 10, 2019. The
respondent acknowledged receipt of the email dated October 10, 2019, by its
email dated October 18, 2019, without any objection to the same. On the
basis of the purchase order, several invoices were raised by the respondent.
Those were also paid. Such conduct of the parties would show that the
entire purchase order, including the terms and conditions thereof, had been
5
2025:CHC-OS:97
accepted by the parties and the parties were ad idem on the issue of
reference of disputes arising out of the said purchase order, to arbitration.
According to Mr. Banerjee, the intention of the parties would be evident from
the way they conducted themselves after the issuance of the purchase order.
Proforma invoices dated October 17, 2019 and February 8, 2020, were
issued by the respondent in furtherance to the steps taken under the
purchase order. The subject capacitor panels were also delivered on the
basis of the said purchase order. The ‘Good Received Note’ dated January
23, 2021, was issued in compliance of the terms and conditions of the
purchase order. The petitioner was thereafter constrained to issue the
termination letter. The respondent denied the allegations made by the
petitioner. Only when the petitioner invoked arbitration, a frivolous and
arbitrary plea was taken by the respondent with regard to non-existence of
the arbitration clause in view of a jurisdiction clause in the tax invoice. The
tax invoice was issued subsequently by the respondent and allegedly
accepted by the petitioner. According to Mr. Banerjee, the arbitration
agreement was a part of the purchase order and the same was exchanged by
email. The arbitration agreement was covered by the definition of the said
term under Section 7(4)(b) of the Arbitration and Conciliation Act, 1996
(hereinafter referred to as the said Act).
9. Mr. Banerjee submitted that while the purchase order contained the
commercial terms and conditions of the business, the invoice merely
contained the description and price of goods. The purchase order, was a
binding contract and the same would prevail over the invoice. Moreover, the
disputes were with regard to non-compliance of the guarantee clause, non-
6
2025:CHC-OS:97
refund of the money paid in advance, non-replacement of the defective
capacitor panels etc. Those issues were covered by the purchase order. The
disputes arose out of breach of the terms and conditions of the purchase
order and the Guarantee/warrant clause. The respondents also raised
alternative claims on the basis of the purchase order. Thus it was prayed
that the dispute must be referred to arbitration.
10. Mr. Sharma, learned Advocate for the respondent opposed the
application on the ground that a tax invoice had been judicially held to be a
binding contract and the subsequent issuance of the tax invoices was an
amendment to the purchase order. Mr. Sharma submitted that the tax
invoice was accepted by the petitioner and payments were made in
accordance with the contents of the tax invoice. The tax invoice did not
contain any arbitration clause and the jurisdiction of this court was ousted
by the jurisdiction clause in the tax invoice. The clause provided that Courts
at Satna, would have jurisdiction. Mr. Sharma further submitted that the
purchase order was a document generated by the petitioner. The same was
not signed by the respondent. The consensus and meeting of minds of the
parties was absent. The intention to refer the dispute to a sole arbitrator,
was thus absent. Clause 4 of the invoice disclosed that the parties had
agreed that all disputes were subject to Satna jurisdiction. He submitted
that as per the terms of the invoice, the jurisdiction of the civil court at
Satna should have been invoked and the petitioner’s remedy would be in a
civil suit. Under the GST regime, all goods which were supplied, would have
to be accompanied by an invoice and the buyer had an option either to
accept the goods and the invoice or reject both. The petitioner did not
7
2025:CHC-OS:97
invoke the option to reject the goods mentioned in the tax invoice it is urged
that, this court should reject the application, as the same was not
maintainable in view of the absence of an arbitration agreement and in view
of the exclusive jurisdiction of the civil courts at Satna to entertain any
dispute arising out of the aforementioned commercial transaction. Mr.
Sharma relied on the following decisions:-
(a) M/s. Flint Group India Private Limited vs M/s. Good Morning
India Media Private Limited reported in 2017 SCC Online Del
7894,
(b) Beacon Electronics vs Sylvania & Laxman Ltd. reported in
1998 SCC Online Del 16,
(c) Anantara Solutions Private Ltd. vs Vinculum Solutions Private
Ltd. decided in O.A. No. 675 of 2017,
(d) R.P. Infosystems Private Limited vs Redington (India) Limted
reported in 2023:CHC-OS:5132,
(e) Bharat Forge Limited vs Onil Gulati reported in 2005 (83) DRJ
140 and
(f) Jatin Koticha vs VFC Industries Pvt. Ltd. reported in (2007)
SCC Online Bom 1092
11. Heard the learned advocates for the respective parties. The question
which arises before this court is whether this court should appoint a sole
arbitrator, in terms of clauses 6 of the purchase order.
12. The petitioner relied on the abovementioned transactions between the
parties, exchange of email and the conduct of the parties, in order to
8
2025:CHC-OS:97
establish that the purchase order was duly accepted by the respondent and
the terms and conditions thereof, were binding between the parties.
13. The registered office of the petitioner is in Kolkata. The terms and
conditions on the basis of which the goods were supplied and invoices were
raised by the respondent, were based on the purchase order, which was
issued from Jamuria Burdwan.
14. The purchase order contains the billing address, the shipping
address, the item details, the item code, HSN number, U.M., quantity
discount rate and the material value. The total material value was for Rs.
1,67,00,000. The IGST payable was Rs. 30,06,000.00/-. The total amount
payable by the petitioner was Rs. 1,97,06,000/. The commercial terms and
conditions were stated in the second page of the purchase order. The general
terms and conditions were stated in the third page of the purchase order,
which are quoted below.
“GENERAL TERMS:-
1. Time is essence of this order and delivery must be made as
per delivery schedules unless otherwise deferred by us in
writing.
2.In the event, the supplier fails to deliver the goods of the
ordered quality or deliver different and /or sub-standard
make/quality, the company reserves right to reject the material
and inform the supplier to lift the material from our stores at
his own cost. Incoming freight, if any, paid for these shall also
be recovered. Breakage/loss if any during transit due to poor
packing or handling shall be to supplier’s account.
3.Please ensure that separate invoices are raised for each
delivery challan/P.O. and submitted in duplicate along with
delivery of the goods.
4. Please mention our Purchase Order No. in all your
correspondence and invoices & delivery challans for prompt
action,
5. Please ensure that your CST/GST/TIN/TAN/ECC Nos. are
mentioned on your invoices,
6.ARBITRATION; All disputes of differences whatsoever arising
between the parties out of or in relation to work/supply of work
92025:CHC-OS:97
order/purchase order or effect to dis-contract or breach
thereafter shall be settled amicable. However, if the parties are
under to solve them amicable, the same shall be finalized
setting by arbitration and reconciliation. The award may in
pursuance thereafter shall be final and binding on the parties.
All the disputer settles subject to Kolkata jurisdiction
7.CENVAT COPY OF INVOICE MUST ACCOMPANY the goods
failing which this amount will not be paid.”
15. Clause 6 provides for reference of disputes to arbitration. It states
that any dispute or difference whatsoever, arising between the parties out of
or in relation to the work/supply of the work order/purchase order, or effect
to dis-contract or breach thereafter, shall be settled amicably, and if the
parties failed to resolve the disputes, the same shall be finalised by
arbitration. The award made in pursuance thereof, shall be binding. The
intention of the parties to refer the dispute to arbitration is clear, although
the English is slightly incorrect.
16. By email dated October 10, 2019, the petitioner forwarded the
purchase order to the respondent. By an email dated October 18, 2019, the
Assistant Vice President, Sales and Marketing, Capacitor Division of the
respondent, thankfully acknowledged receipt of the purchase order and
informed the petitioner that the company was sending a proforma invoice
bearing No. 196 dated October 17, 2019, for payment of Rs. 16,70,000 being
10% of the bid amount. Request was made for release of the advance
payment to enable the respondent to proceed further. It was further stated
that the drawing was under preparation and would be sent shortly for
approval by the petitioner. The e-mail further mentioned that the delivery
should be counted from the date of receipt of the drawing approval/advance
payment whichever was later. The second paragraph of the mail contains a
further request to the petitioner to send the PBG format and the bank
10
2025:CHC-OS:97
details with the name and address of the bank, the IFSC code number, etc.
in order to enable submission of the performance bank guarantee as per the
purchase order. The petitioner was requested to release the advance
payments, that is, 10% upon acceptance of the order and 10% against
approval of drawing. Thereafter, the drawing was enclosed by the
respondent in a further e-mail, for approval by the petitioner. The trail mail,
annexed to the application clearly indicates that, by an e-mail dated
February 7, 2020, the drawing was approved and the respondent sent a
further proforma invoice bearing No. 196/1, dated February 8, 2020, for
payment of a further sum of Rs. 16,70,000, after approval of the drawing.
17. It further appears that, by an e-mail dated October 14, 2020, the
respondent informed the petitioner that the panels were getting ready for
dispatch and the same would be dispatched within October 30, 2020. The
proforma invoices for advance payment did not contain any jurisdiction
clause. The ‘Goods Receipt Note’ was issued on January 23, 2021 by the
petitioner. Thus, this court is of the view that the principal agreement
entered into between the parties, is the purchase order dated September 6,
2019, which contains an arbitration clause. All steps were taken by the
respondent in terms of the purchase order.
18. The commercial terms and conditions and the general terms and
conditions of the agreement for goods to be supplied by the respondent, are
all contained in the said purchase order. The law provides that consensus
ad idem could also be inferred from the conduct of the parties. An
agreement which is electronically exchanged between the parties will suffice
11
2025:CHC-OS:97
the requirement of law for an arbitration agreement to be recorded in
writing.
19. Section 7 of the said Act is quoted below:-
“7. Arbitration agreement.–(1) In this Part, “arbitration
agreement” means an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which
may arise between them in respect of a defined legal
relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an
arbitration clause in a contract or in the form of a separate
agreement.
(3) An arbitration agreement shall be in writing. (4) An
arbitration agreement is in writing if it is contained in–
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of
telecommunication 1 [including communication through
electronic means] which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the
existence of the agreement is alleged by one party and not
denied by the other.
(5) The reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement if the
contract is in writing and the reference is such as to make that
arbitration clause part of the contract.”
20. The correspondences between the parties clearly indicate that the
respondent acknowledged receipt of the purchase order and acted in terms
thereof. The respondent did not raise any objection to the same. Rather, on
the basis of the purchase order, proforma invoices were raised for advance
payments. Drawings were sent to the petitioner for approval. Upon receipt of
the petitioner’s approval, further advance payments were claimed, which
were paid by the petitioner.
21. The purchase order clearly mentioned the description of the capacitor
panels. The respondent claims to have conformed to those specifications and
descriptions and supplied the same. The respondent claimed full payment
for the goods supplied. The respondent had also requested the petitioner to
12
2025:CHC-OS:97
send the PGB format so that the PGB could mention the bank’s name, IFSC
code, etc., which were required as per the terms of the purchase order.
22. Thus, this court has no hesitation to hold that the purchase order was
the principal agreement between the parties. The intention of the parties to
refer the disputes and differences arising out of the purchase order to
arbitration, is available from clause 6 thereof. The tax invoice is a document
of evidence for supply of goods or services and is also essential for the
recipient to avail of input tax credit. The tax invoice provides the description
of the goods with the specification code, quantum, total value, etc, without
further specification or details.
23. The tax invoice was unilaterally raised by the respondent after having
acted in terms of the purchase order. Thus, the tax invoice is an ancillary
document to the main agreement i.e., the purchase order.
24. In my prima facie view, the purchase order is the main contract
which contains all the terms and conditions which the parties agreed to be
bound by, including the arbitration clause. The tax invoice was issued later.
It contains the description the description of goods sold and the payment to
be received. The invoice does not contain any arbitration clause, although
the main agreement contains the same. Thus, in my prima facie view, the
terms and conditions of the purchase order including the arbitration
agreement will prevail over and supersede the terms and conditions of the
tax invoice. The tax invoice does not mention any arbitration agreement. It
only states that courts at Satna will have jurisdiction.
25. The arbitration clause is contained in the purchase order and all
disputes are subject to Kolkata jurisdiction. Moreover, the documents
13
2025:CHC-OS:97
disclosed indicate that substantial cause of action has arisen within the
jurisdiction of this court, at Jamuria, Burdwan. The jurisdiction of the civil
courts at Satna, does not bind this court while deciding an application
under Section 11 of the Arbitration of the said Act, for appointment of an
arbitrator under clause 6 of the purchase order. Reference is made to the
decision in Parekh Plastichem Distributors LLP vs Simplex
Infrastructure Limited reported in 2023 SCC Online Bom 1942, the
Court held that:-
“31. In the case of Balasore Alloys Limited (Supra), the Hon’ble
Supreme Court was considering a case where Arbitration
Clauses were contained in the purchase orders and in an
Agreement dated 31st March 2018 entered into between the
parties which was referred to by one party as the “Umbrella
Agreement” and by the other party as “Pricing Agreement”. As
can be seen from the paragraphs of the judgment quoted above,
after considering the factual situation and the law, the Hon’ble
Supreme Court came to the conclusion that the Arbitration
Clauses in the said Agreement dated 31st March 2018 would
govern the parties as there was consensus ad-idem to the terms
and conditions contained therein and the said Agreement dated
31st March 2018 was comprehensive and encompassing all
terms of the transactions between the parties. Applying the ratio
of the said judgment to the present case, it is clear that, in the
present case, as set out hereinabove, the purchase orders
issued by the Respondent are comprehensive and encompass all
the terms of the transaction between the parties, and therefore
the Arbitration Clause contained in the said purchase orders
would govern the parties and not the Arbitration Clause
contained in the invoices issued by the Applicant. As held
hereinabove, the same is more so because the parties have not
expressly and specifically agreed that the Arbitration Clause
contained in the purchase orders, which is the main agreement,
would be superseded by the Arbitration Clause contained in the
invoices issued by the Applicant.
32. That leaves me to consider one more argument advanced by
the Applicant. It is the case of the Applicant that the purchase
orders contained an Annexure, in which against the title “Other
Terms”, it is stated that jurisdiction would be subject to Mumbai
High Court. It is the submission of the Applicant that, because
of this Clause, this Court would have jurisdiction under Section
11 of the Act to appoint an Arbitrator. In the context of this
142025:CHC-OS:97
submission, the Applicant has referred to a judgment of the
Hon’ble Supreme Court in the case of M.K. Abraham &
Co. (Supra) and in particular to Paragraph No. 10 thereof, which
reads as under:–
“10. If a contract consists of a printed form with cyclostyled
amendments, typed additions and deletions and handwritten
corrections, an endeavour shall be made to give effect to all the
provisions. However, in the event of apparent or irreconcilable
inconsistency, the following rules of construction will normally
apply:
(i) The cyclostyled amendments will prevail over the printed
terms;
(ii) The type-written additions will prevail over the printed terms
and cyclostyled amendments;
(iii) Hand written corrections will prevail over the printed terms,
cyclostyled amendments and typed written additions.
The above rules have evolved from the well known maxim of
construction that “written, stamped or typed additions, when
inconsistent with the printed terms, would normally prevail over
the printed terms” and proceeds on the assumption that the
printed form contained the original terms, and changes thereto
were incorporated by the cyclostyled amendments, followed by
changes by type-written additions and lastly the hand written
additions. The logical explanation for such assumption is this :
The printed form contains standardized terms to suit all
contracts and situations. It is not drafted with reference to the
special features of a specific contract. When such a standard
form is used with reference to a specific contract, it becomes
necessary to modify the standard/general terms by making
additions/alterations/deletions, to provide for the special
features of that contract. This is done either by way of an
attachment of an annexure to the standard printed form,
incorporating the changes, or by carrying out the required
additions/alterations/deletions in the standard form itself. Such
additions/alterations/deletions are done by
typing/stamping/hand. We may refer to the following oft-quoted
enunciation of the legal position by Lord Ellenborough
in Robertson v. French [1803] 13 All ER 350 with reference to
printed form of contract with hand-written additions:
……. that the words super added in writing are entitled,
nevertheless, if there should be any reasonable doubt on the
sense and meaning of the whole, to have a greater effect
attributed to them than to the printed words, inasmuch as the
written words are the immediate language and terms selected by
the parties themselves for the expression of their meaning and
the printed words are a general formula adapted equally to their
152025:CHC-OS:97
case and that of all other contracting parties on similar
occasions and subjects”.
Another parallel principle that is equally relevant is that where
the contract has several annexures/attachments, prepared at
different points of time, unless a contrary intention is apparent,
the latter in point of time would normally prevail over the earlier
in point of time.”
33. I am unable to accept the said submission of the Applicant.
In the present case, this Court has to consider as to what is the
venue of the Arbitration, and only if the venue of the Arbitration
is Mumbai would this Court have jurisdiction to entertain this
Application under Section 11 of the Act. Although, in the
Annexure, it is stated that jurisdiction is subject to Mumbai
High Court, the same is not at all in connection with the
arbitration proceedings. As far as Arbitration is concerned,
Clause 23 of the purchase orders is very clear that the
Arbitration would be at Kolkata and, in fact, Clause 24, which
follows the same, provides that all transactions will be subject
to the jurisdiction of the Calcutta High Court and the Courts
thereunder. In this situation, it is very clear that, as far as
arbitration is concerned, the parties have agreed that the venue
of the arbitration shall be at Kolkata. It is also clear from
Clauses 23 and 24 of the purchase orders that the parties
intended that the seat of the Arbitration would be Kolkata.
34. Since I have come to the conclusion that the Arbitration
Clause in the purchase orders issued by the Respondent is the
Arbitration Clause governing the parties, and since the said
Arbitration Clause provides the venue and seat of the
Arbitration as Kolkata, in the light of the law laid down by the
Hon’ble Supreme Court in Indus Mobile Distribution Pvt.
Ltd. v. Datawind Innovations Pvt. Ltd.7 the Courts at Kolkata
will have jurisdiction to entertain an Application under Section
11 of the Act.
35. In these circumstances, and for all the reasons stated herein
above, this Court has no jurisdiction to entertain the present
Application filed under the provisions of Section 11 of the Act or
appoint an Arbitrator to arbitrate upon the disputes and
differences between the parties.”
26. In Larsen & Turbo Limited represented by its Manager-Supply
Chain Management/PoA vs M/s. Texmo Pipes and Products Limited,
through its Managing Director decided in Arb.O.P (Com.Div.) No. 191 of
2024, it was held as follows:-
16
2025:CHC-OS:97
“22. The learned counsel for the respondent heavily relied upon a
decision in “Aviagen India Poultry Breeding Company Private Limited
versus R.Geetha Ranjani” (Arb.O.P.(Com.Div.) No.24 of 2023),
wherein, a learned single Judge (Myself) of this Court, has
categorically held that the arbitration Clause contained in the
Invoices, would be binding on the parties. Therefore, the learned
counsel for the respondent would contend that since the Invoices
raised by the respondent specifically contained arbitration clause, the
same would be binding on the petitioner. This decision, in the opinion
of this Court, would not improve the case of the respondent since
taking note of the fact that there was no arbitration clause contained
in the Purchase Order, this Court held that the Invoices which
contained arbitration clause, would be binding on the parties. But in
the present case, in the purchase orders, there is specific reference to
GCC which contained arbitration clause and hence, the Invoices even
though contained arbitration clause, which were raised subsequent to
the Purchase Orders and as the said arbitration clause is unilateral,
the same would not be binding upon the petitioner. Therefore, it can
be safely concluded that the Purchase Orders would prevail over the
Invoices and the parties shall abide by the terms and conditions
mentioned in the Purchase Orders.”
27. The jurisdiction of the referral court does not extend to holding a mini
trial. A prima facie satisfaction of existence of an arbitration clause is
sufficient. Reference is made to the decision of the Hon’ble Apex Court in
Aslam Ismail Khan Deshmukh vs ASAP Fluids Private Limited and
Another reported in (2025) 1 SCC 502. The relevant part is quoted below:-
“50. As evident from the aforesaid discussion and especially in
light of the observations made in Krish Spg. [SBI General
Insurance Co. Ltd. v. Krish Spg., (2024) 12 SCC 1 : 2024 SCC
OnLine SC 1754] , this Court cannot conduct an intricate
evidentiary enquiry into the question of when the cause of
action can be said to have arisen between the parties and
whether the claim raised by the petitioner is time-barred. This
has to be strictly left for the determination by the Arbitral
Tribunal. All other submissions made by the parties regarding
the entitlement of the petitioner to 4,00,000 and 2,00,010
equity shares in Respondent 1 company are concerned with the
merits of the dispute which squarely falls within the domain of
the Arbitral Tribunal.
51. It is now well-settled law that, at the stage of Section 11
application, the referral Courts need only to examine whether
the arbitration agreement exists — nothing more, nothing less.
17
2025:CHC-OS:97
This approach upholds the intention of the parties, at the time
of entering into the agreement, to refer all disputes arising
between themselves to arbitration. However, some parties might
take undue advantage of such a limited scope of judicial
interference of the referral Courts and force other parties to the
agreement into participating in a time-consuming and costly
arbitration process. This is especially possible in instances,
including but not limited to, where the claimant canvasses
either ex facie time-barred claims or claims which have been
discharged through “accord and satisfaction”, or cases where
the impleadment of a non-signatory to the arbitration agreement
is sought, etc.
52. In order to balance such a limited scope of judicial
interference with the interests of the parties who might be
constrained to participate in the arbitration proceedings, the
Arbitral Tribunal may direct that the costs of the arbitration
shall be borne by the party which the Tribunal ultimately finds
to have abused the process of law and caused unnecessary
harassment to the other party to the arbitration.”
28. In the matter of Adavya Projects Pvt. Ltd. vs M/s Vishal
Structutals Pvt. Ltd. and Ors. reported in 2025 INSC 507, the Hon’ble
Apex Court held as follows:-
“40. Summary of Conclusions: Our legal analysis of the issues
that we set out above, as well as our findings in the facts of the
given appeal, can be stated as follows:
I. A notice invoking arbitration under Section 21 of the ACA is
mandatory as it fixes the date of commencement of arbitration,
which is essential for determining limitation periods and the
applicable law, and it is a prerequisite to filing an application
under Section 11. However, merely because such a notice was
not issued to certain persons who are parties to the arbitration
agreement does not denude the arbitral tribunal of its
jurisdiction to implead them as parties during the arbitral
proceedings.
II. The purpose of an application under Section 11 is for the
court to appoint an arbitrator, so as to enable dispute resolution
through arbitration when the appointment procedure in the
agreement fails. The court only undertakes a limited and prima
facie examination into the existence of the arbitration agreement
and its parties at this stage. Hence, merely because a court does
not refer a certain party to arbitration in its order does not
denude the jurisdiction of the arbitral tribunal from impleading
them during the arbitral proceedings as the referral court’s view
does not finally determine this issue.”
18
2025:CHC-OS:97
29. The law is well settled that, the arbitrator can rule on his own
jurisdiction. All objections which had been raised by the respondent before
this court at the referral stage, can be raised before the learned arbitrator.
The application is also allowed, leaving it open to the parties raise all
questions available to them, before the learned arbitrator.
30. The decision in M/s. Flint Group India (supra) is not applicable. In
the said case, the trial court converted a suit filed by the petitioner under
order 37 of the Code of Civil Procedure, based on the invoices, into an
ordinary suit and issued summons. The petitioner therein filed a review
which was dismissed. The order of dismissal of the review was under
challenge before the High Court at Delhi under Article 227 of the
Constitution of India. The learned judge held that an invoice which
incorporated the particulars of the seller, purchaser, description, weight,
quantity, etc., including the sales tax and other dues, would be regarded as
a written contract. Thus, it was held that the invoice could be treated as a
contract, for filing of a suit under order 37 of the Code of Civil Procedure.
However, it was made clear by the court that, the right of the defendant to
defend the suit would be decided independently, without being influenced by
the said order. The decision was not on the issue as to whether a purchase
order which contained an arbitration clause and all other terms and
conditions arising out of or relating to the commercial transaction entered
into between the parties, would be superseded by a tax invoice and whether
the terms and conditions of the tax invoice would prevail over to the
purchase order. Jatin Koticha (supra) is also a decision on institution of
192025:CHC-OS:97
summary suits under order 37 of the Code of Civil Procedure. The decisionwas as hereunder:-
“8. Besides above, the facts of the present case indicate that the
suit must be treated as a summary suit since it is based on an
enactment. In this case the facts clearly show that the goods were
delivered by the plaintiff to the defendants and the defendants
enjoyed the benefit of that, therefore they are liable under section
70 of the Contract Act to pay compensation in respect of such
goods to the plaintiff. Section 70 reads as follows:
“Obligation of person enjoying benefit of non-gratuitous act.-
Where a person lawfully does anything for another person, or
delivers anything to him, not intending to do so gratuitously,
and such other person enjoys the benefit thereof, the latter is
bound to make compensation to the former in respect of, or to
restore, the thing so done or delivered.”
31. Bharat Forge Limited (supra) is once again a decision on whether
the application for leave to contest filed by the defendant in a suit under
Section 37 of the Code of Civil Procedure, disclosed a triable issue, so as to
entitle the defendant to defend the suit. The Hon’ble Apex Court was of the
view that an invoice which incorporated the particulars of a seller,
purchaser, description of goods, quantity, rate, type, etc. along with
additional terms, would be taken as a written contract. The contention of
the defendant that the suit based on invoices was not maintainable under
summary procedure, was not accepted.
32. The defendant’s contentions were rejected on the ground that there
was nothing on record which would show that the defendant had, at any
stage disputed his liability. Rather, the cheques issued in part payment were
dishonoured, for which the defendant issued fresh cheques. There was
nothing to support the defendant’s contention that the acknowledgement of
liability as recorded in the letter dated December 19, 2000 was false or
20
2025:CHC-OS:97
forced. Thus, the Apex court disallowed the defendant to defend the suit.
The decision of a coordinate bench in R.P. Infosystems (supra) laid down
certain principles which are quoted below:-
“40. The principles which emerge from the aforesaid discussion
on law and facts have been summarised below:
a. Under Section 7 of the Act, there is no standard format
prescribed for an arbitration agreement. Parties can draft one as
per their own convenience and requirements. As long as the said
clause fulfils the requirements contained under Section 7 of the
Act, it would constitute a valid arbitration agreement.
b. Words which have been used in an arbitration clause must be
“words of choice and determination” to refer the disputes between
the parties to arbitration and not words of mere possibility.
c. While adjudicating the validity of an arbitration agreement, the
courts must also take into account the intent of the parties and
not just the mere wordings of the arbitration agreement. The
intent of the parties can be inferred from the conduct of the
parties, and the commercial relationship that exists between
them.
d. Parties can mould and shape the arbitration agreement in
whichever manner they prefer, as long as they act within the
confines of Section 7 of the Act. Party autonomy is the cardinal
principle of arbitration, and even an arbitration clause typed on
the overleaf of an invoice can be considered a valid one, if certain
requirements are met. If parties act on the invoices raised, and do
not raise any demur or register any opposition to the clauses
contained in such invoices, they will be bound by them.
e. For interpreting an agreement as an arbitration agreement,
courts have to first ascertain whether or not there is consensus
ad idem between the parties.
f. Furthermore, If courts at any particular place have been
granted exclusive jurisdiction in an arbitration agreement, all
other courts will be barred from hearing any application in
relation to any proceedings arising out of such an arbitration
agreement even if the words “exclusive”, “exclusive jurisdiction”,
“alone”, “only” have not been used in an arbitration agreement.
Directions
41. In light of the aforesaid discussion, this Court concludes that
since exclusive jurisdiction to deal with all the matters, including
those arising out of the arbitration proceedings between the
parties has been conferred upon the courts in Chennai, the
212025:CHC-OS:97
instant Section 34 application is not maintainable before this
Court.”
33. The arbitration clause in the purchase order will bind the parties, in
my prima facie view. The purchase order is an all-encompassing agreement.
The tax invoice does not contain an arbitration clause. It does not mention
that the purchase order has been superseded. The tax invoice is signed by
the respondent alone. In any event, the issue of novation of the purchase
order will be decided by the learned Arbitrator. The arbitrator can rule on
his own jurisdiction and thus, decide the arbitrability of the dispute, if
raised.
34. The dispute is referred to the sole Arbitrator. Mr. Amitesh Banerjee,
learned senior Advocate is appointed as the sole arbitrator, to arbitrate upon
the disputes between the parties. The appointment is subject to compliance
of Section 12 of the Arbitration and Conciliation Act and the learned
Arbitrator will fix his own remuneration, in accordance with the schedule of
the Act.
35. AP-COM 470 OF 2024 is accordingly allowed.
36. Urgent Photostat certified copies of this judgment, if applied for, be
supplied to the parties upon fulfilment of requisite formalities.
(Shampa Sarkar, J.)
[ad_1]
Source link