Using ‘Arbitration’ or ‘Arbitrator’ in a Title Does Not Automatically Imply an Arbitration Agreement

Pure Diets India limited Vs Lokmangal Agro Industries Ltd (Delhi High Court)

Delhi High Court held that the main attribute of an arbitration agreement is thus consensus ad idem to refer the disputes to arbitration. Mere use of the word ‘arbitration’ or ‘arbitrator’ is not enough to construe an agreement to be an arbitration agreement.

Facts- Present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of a sole Arbitrator in respect of a Supply Agreement dated 18.08.2017.

The controversy in the present case pertains to construction of Clause 15.7 of the Agreement dated 18.08.2017 and while it is the contention of the Petitioner that Clause 15.7 is an arbitration clause providing for reference of the disputes between the parties to Arbitration, Respondent contends to the contrary.

Conclusion- Held that the language of the purported arbitration clause must evidence an unambiguous, explicit and unequivocal intention to refer the disputes to arbitration, leaving no room for doubt that parties chose arbitration as their only mode of resolution of disputes. The main attribute of an arbitration agreement is thus consensus ad idem to refer the disputes to arbitration. An agreement to enter into an arbitration agreement cannot be an arbitration clause and therefore Courts have also held that mere use of the word ‘arbitration’ or ‘arbitrator’ is not enough to construe an agreement to be an arbitration agreement.

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