In the case of Caravel Shipping Services Pvt. Ltd. vs. Premier Sea Foods Exim Pvt. Ltd., Supreme Court has held that the only requirement to triggering an arbitration agreement is that it should be in writing, it is not necessary for an arbitration agreement to be signed in all cases.
In this suit filed by the consignor/shipper for recovering a sum of Rs. 26,53,593 from Carvel Shipping Services Pvt. Ltd. (Appellant) who is an agent, soon after the suit was filed, latter filed an application under section 8 of Arbitration and Conciliation Act, 1996 for seeking reference to arbitration in which it was pointed out that an arbitration clause was included in the printed terms annexed to the Bill of Lading. Sub-Court dismissed the application stating that printed conditions annexed to the Bill of Lading would not be binding upon the parties. The High Court also dismissed the petition. The review filed against the judgement was also dismissed.
In this appeal before the Apex Court, the bench comprising of Justice Rohinton Fali Nariman and Justice Navin Sinha observed that, the respondent has itself relied upon the bill of Lading as part of its cause of action to recover the sum but the argument put forward by the respondent was since the Bill of Lading was not signed, it is not bound by the arbitration clause contained in that document. It was contended that section 7(4)(a) of the Act, requires an arbitration agreement to be in a document that is signed by the parties.
The Court further observed that, in Jugal Kishore Rameshwardas vs. Mrs. Goolbai Hormusji, it was stated that “an arbitration agreement needs to be in writing though it need not be signed. The fact that the arbitration agreement shall be in writing is continued in the 1996 Act in Section 7(3) thereof. Section 7(4) only further adds that an arbitration agreement would be found in the circumstances mentioned in the three sub-clauses that make up Section 7(4). This does not that in all cases an arbitration agreement needs to be signed. The only prerequisite is that it be in writing, as has been pointed out in Section 7(3)”
“Section 7(4) only further adds that an arbitration agreement would be found in the circumstances mentioned in the three sub-clauses that make up Section7(4). This does not mean that in all cases an arbitration needs to be signed”
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