Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL   No  . 19         of   2018 (Arising out of SLP (Civil) No.31049 of 2016)

M/S. INOX WIND LTD. .... Appellant

Versus

M/S THERMOCABLES LTD.           ....   Respondent

J U D G M E N T

L. NAGESWARA RAO, J.

Leave granted.  

2. This appeal is directed against the judgment of the High Court

of Judicature at Allahabad dismissing the application filed by the

Appellant  under  Section  11  (6)  of  the  Arbitration  and

Conciliation Act, 1996 (hereinafter referred to as ‘the Act’).    

3. The Appellant is a manufacturer of wind turbine generators (WTGs).

The Respondent is engaged in the business of manufacture of wind

power cables and other types of cables.  Two purchase orders dated

13.12.2012  and  02.02.2013  were  issued  by  the  Appellant  to  the

Respondent for supply of cables for their WTGs.  According to the

Purchase  Order,  the  supply  was  to  be

according to  the terms mentioned in the order and the Standard

Terms and Conditions that were attached thereto.  Apart from the

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other  conditions,  the  Standard  Terms  and  Conditions  contain  a

clause pertaining to dispute resolution. The said clause provides for

a dispute to be resolved by a sole arbitrator in accordance with the

provisions of the Arbitration and Conciliation Act, 1996. The material

on record indicates that the Respondent accepted all the terms and

conditions  mentioned  in  the  Purchase  Order  except  the  delivery

period as is evident from a letter dated 15.12.2012.

4. The  Respondent,  pursuant  to  the  Purchase  Order,  supplied  wind

power cables to the Appellant. While laying the cables supplied by

the Respondent-company, the Appellant discovered that the outer

sheaths of  the cables of  150 sq.  mm. were cracked.  This  forced

them  to  stop  the  WTGs  so  as  to  avert  damage  to  expensive

equipment.  According to the Appellant, the Respondent-company

did  not  replace  the  cables.   The  Appellant,  therefore,  was

constrained to issue a notice dated 30.10.2014 proposing the name

of a sole arbitrator in terms of the Standard Terms and Conditions.

In the absence of any response, the Appellant moved the High Court

of Judicature at Allahabad by filing an application under Section 11

(6) of the Act.

5. The High Court dismissed the said application by holding that an

arbitrator cannot be appointed as the Appellant did not prove the

existence of an arbitration agreement. The High Court relied upon

the judgment of this Court in  M.R. Engineers and Contractors

Private Limited v. Som Datt Builders Limited, (2009) 7 SCC

696  to  hold  that  there is  no special  reference to  the arbitration

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clause  in  the  standard  terms  and  conditions,  so  the  arbitration

clause cannot be said to have been incorporated into the purchase

order.   

6. We have heard the counsel for the Appellant and Respondent.  The

judgment of this Court in M.R. Engineers’ case (supra) was relied

upon by both the parties.  Before proceeding further, it would be

necessary to appreciate the ratio of the said judgment.  A few facts

necessary to understand the dispute in the said case are that the

Appellant  therein  was  a  sub-contractor  of  the  Respondent.   The

Appellant  was  entrusted  a  part  of  the  work  by  the

Respondent-contractor which pertained to ‘construction of  project

directorate building’.  It was mentioned in the sub-contract that it

shall be carried out as per the terms and conditions applicable to

the main contract.  A dispute arose between the parties which made

the Appellant therein to approach the High Court for appointment of

an arbitrator under Section 11 (6) of the Arbitration and Conciliation

Act, 1996. The High Court of Kerala rejected the application on the

ground  that  the  arbitration  clause  in  the  main  contract  was  not

incorporated  by  reference  in  the  contract  between the  Appellant

and  Respondent  therein.   In  the  appeal  before  this  Court,  the

Appellant submitted that his case was squarely covered by Section

7  (5)  of  the  Act  and  that  the  arbitration  clause  from  the  main

contract was incorporated by reference in the sub contract between

him and the Respondent.   

7. This Court considered the scope of Section 7 (5) of the Act and held

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that  a  conscious  acceptance  of  the  arbitration  clause  found  in

another document is necessary for the purpose of incorporating it

into  the  contract.  It  was  further  held  that  general  rules  of

construction of contracts would have to be followed as there were

no guidelines in Section 7(5) regarding the conditions that need to

be fulfilled before construing a reference to a portion of a contract

as  a  reference  incorporating  the  whole  of  it  along  with  the

arbitration clause contained in it. While distinguishing ‘reference’ to

another document from ‘incorporation’, this Court observed that the

relevant factor was the intention of the parties either to adopt the

document in its entirety or to borrow specific portions of the said

document.    In  this  connection,  the Court  held as follows:  (M.R.

Engineers’ case, para 17-19)

“17. We will give a few instances of incorporation and mere reference to explain the position (illustrative and not exhaustive). If a contract refers to a  document  and provides  that  the  said  document  shall  form part  and parcel  of  the  contract,  or  that  all  terms  and  conditions  of  the  said document shall be read or treated as a part of the contract, or that the contract will be governed by the provisions of the said document, or that the terms and conditions of the said document shall be incorporated into the contract, the terms and conditions of the document in entirety will get bodily  lifted  and  incorporated  into  the  contract.  When  there  is  such incorporation of the terms and conditions of a document, every term of such document (except to the extent it is inconsistent with any specific provision in the contract) will  apply to the contract. If the document so incorporated contains a provision for settlement of disputes by arbitration, the said arbitration clause also will apply to the contract.

18. On the other hand, where there is only a reference to a document in a contract in a particular context, the document will not get incorporated in entirety  into  the  contract.  For  example,  if  a  contract  provides that  the specifications of the supplies will be as provided in an earlier contract or another purchase order, then it will be necessary to look to that document only for the limited purpose of ascertainment of specifications of the goods to be supplied. The referred document cannot be looked into for any other purpose, say price or payment of price. Similarly, if a contract between X and Y provides that the terms of payment to  Y will be as in the contract between  X and  Z,  then  only  the  terms  of  payment  from the  contract between X and Z, will be read as part of the contract between X and Y. The other terms, say relating to quantity or delivery cannot be looked into.

19. Sub-section  (5)  of  Section  7  merely  reiterates  these  well-settled principles of construction of contracts. It makes it clear that where there is

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a reference to a document in a contract, and the reference shows that the document  was  not  intended  to  be  incorporated  in  entirety,  then  the reference will not make the arbitration clause in the document, a part of the contract, unless there is a special reference to the arbitration clause so as to make it applicable.”

8. Relevant passages from  Russell  on Arbitration 23  rd   Edition (2007)

which were relied upon by this Court for interpretation of Section 7

(5) of the Arbitration and Conciliation Act, 1996 are as under:  (M.R.

Engineers’ case, para 20-21)  

“20. The  following  passages  from Russell  on  Arbitration throw considerable light on the position while dealing with Section 6(2) of the (English) Arbitration Act, 1996 corresponding to Section 7(5) of the Indian Act. (See pp. 52-55, 23rd Edn.):

“Reference to  another  document.—The terms of  a  contract  may have to be ascertained by reference to more than one document. Ascertaining  which  documents  constitute  the  contractual documents and in what, if any, order of priority they should be read is  a  problem  encountered  in  many  commercial  transactions, particularly those involving shipping and construction.  This  issue has  to  be  determined  by  applying  the  usual  principles  of construction  and  attempting  to  infer  the  parties'  intentions  by means of an objective assessment of the evidence. This may make questions of incorporation irrelevant, if for example it is clear that the contractual documents in question are entirely separate and no intention  to  incorporate  the  terms  of  one  in  the  other  can  be established.  However,  the  contractual  document  defining  and imposing the performance obligations may be found to incorporate another  document  which  contains  an  arbitration  agreement.  If there is a dispute about the performance obligations, that dispute may need to be decided according to the arbitration provisions of that  other  document.  This  very  commonly  occurs  when  the principal  contractual  document  refers  to  standard  form  terms containing an arbitration agreement.  However the standard form wording may not be apt for the contract in which the parties seek to  incorporate  it,  or  the  reference  may  be  to  another  contract between  parties  at  least  one  of  whom  is  different.  In  these circumstances  it  may  be  possible  to  argue  that  the  purported incorporation  of  the  arbitration  agreement  is  ineffective.  The draftsmen  of  the  Arbitration  Act,  1996  were  asked  to  provide specific guidance on the issue, but they preferred to leave it to the court to decide whether there had been a valid incorporation by reference. (Para 2.044)

*** Subject to drawing a distinction between incorporation of an arbitration agreement contained in a document setting out standard form terms and one contained in some other contract between different parties, judicial thinking  seems  to  have  favoured  the  approach  of  Sir  John  Megaw  in Aughton, namely, that general words of incorporation are not sufficient. Rather, particular reference to the arbitration clause needs to be made to comply  with  Section  6  of  the  Arbitration  Act,  1996,  unless  special circumstances exist. (Para 2.047)

Reference to standard form terms.— If the document sought to be incorporated is  a standard form set  of  terms and conditions the courts are more likely to accept that general words of incorporation will suffice. This is because the parties can be expected to be more

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familiar with those standard terms including the arbitration clause.” (Para 2.048)

21. After referring to the view of Sir  John Megaw in Aughton Ltd. v. M.F. Kent Services Ltd. [(1991) 57 BLR 1] that specific words were necessary to incorporate an arbitration clause and that the reference in a sub-contract to another contract's terms and conditions would not suffice to incorporate the  arbitration  clause  into  the  sub-contract,  followed  in Barrett  &  Son (Brickwork) Ltd. v. Henry Boot Management Ltd.[1995 CILL 1026] , Trygg Hansa  Insurance  Co.  Ltd. v. Equitas  Ltd. [(1998)  2  Lloyds'  Rep  439] and AIG  Europe  (UK)  Ltd. v. Ethniki [(2000)  2  All  ER  566  (CA)]  and Sea Trade Maritime Corpn. v. Hellenic Mutual War Risks Assn. (Bermuda) Ltd. No. 2 [2006 EWHC 2530] , Russell concludes:

“The current position therefore seems to be that if the arbitration agreement  is  incorporated  from  a  standard  form  a  general reference to those terms is sufficient, but at least in the case of reference  to  a  non-standard  form  contract  in  the  context  of construction and reinsurance contracts and bills of lading a specific reference to the arbitration agreement is necessary.”

9. This Court also discussed the scope of Section 7 (5) of the Act and

summarised as follows: (M.R. Engineers’ case, para 24) “24. The scope and intent of Section 7(5) of the Act may therefore be summarised thus: (i) An arbitration clause in another document, would get incorporated into a contract by reference, if the following conditions are fulfilled: (1)  the  contract  should  contain  a  clear  reference  to  the  documents containing arbitration clause, (2)  the  reference  to  the  other  document  should  clearly  indicate  an intention to incorporate the arbitration clause into the contract, (3)  the  arbitration  clause  should  be  appropriate,  that  is  capable  of application in respect of disputes under the contract and should not be repugnant to any term of the contract. (ii) When the parties enter into a contract, making a general reference to another  contract,  such  general  reference  would  not  have  the  effect  of incorporating the arbitration clause from the referred document into the contract between the parties. The arbitration clause from another contract can be incorporated into the contract (where such reference is made), only by a specific reference to arbitration clause. (iii) Where a contract between the parties provides that the execution or performance of that contract shall be in terms of another contract (which contains the terms and conditions relating to performance and a provision for settlement of disputes by arbitration), then, the terms of the referred contract in regard to execution/performance alone will apply, and not the arbitration  agreement  in  the  referred  contract,  unless  there  is  special reference to the arbitration clause also. (iv)  Where  the  contract  provides  that  the  standard  form of  terms and conditions  of  an  independent  trade  or  professional  institution  (as  for example  the  standard  terms  and  conditions  of  a  trade  association  or architects  association)  will  bind  them  or  apply  to  the  contract,  such standard  form  of  terms  and  conditions  including  any  provision  for arbitration in such standard terms and conditions, shall be deemed to be incorporated by reference. Sometimes the contract may also say that the parties are familiar  with those terms and conditions or that the parties have read and understood the said terms and conditions. (v) Where the contract between the parties stipulates that the conditions of contract of one of the parties to the contract shall form a part of their contract  (as  for  example  the  general  conditions  of  contract  of  the Government  where  the  Government  is  a  party),  the  arbitration  clause

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forming  part  of  such  general  conditions  of  contract  will  apply  to  the contract between the parties.”

10. It was ultimately found that the intention of the parties was not to

incorporate the main contract in its entirety into the sub-contract.

Further,  this  Court  held  that  the  arbitration  clause  in  the  main

contract was inapplicable to the contract between the parties as the

main  contract  was  between  the  Public  Works  Department,

Government of Kerala  and the contractor in which the arbitration

clause  contemplated  appointment  of  a  committee  of  three

arbitrators, with one each to be appointed by the State of Kerala

and the Respondent therein and the third to be nominated by the

Director General Road Development, Ministry of Surface Transport

Roads  in  Government  of  India.   Appointment  of  a  committee  of

arbitrators  with  representatives  of  State  of  Kerala  and  the

Government of India was totally irrelevant for the contract between

the contractor and the sub-contractor.    

11. Section 6 (2) of the Arbitration Act, 1996 which extends to England,

Wales and Northern Ireland is in  pari materia with Section 7 (5) of

the Arbitration and Conciliation Act, 1996 and it reads as under:-    

“6. Definition of arbitration agreement. ... (2) The reference in an agreement to a written form of arbitration clause or  to  a  document  containing  an  arbitration  clause  constitutes  an arbitration agreement if the reference is such as to make that clause part of the agreement.”  

12. It will be useful to understand the interpretation of the incorporation

issue  in  England.   The  question  whether  the  general  words  of

incorporation are sufficient to incorporate an arbitration agreement

arose for consideration of the High Court of Justice, Queen’s Bench

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Division, Commercial Court in Sea Trade Maritime Corporation v.

Hellenic  Mutual  War Risks Association (Bermuda)  Limited,

The Athena [2006] EWHC 2530 (Comm).  In the said case the

difference between incorporation in a single contract case and a two

contract case was recognized.  If there is a reference to a secondary

document  in  a  contract  between two parties  and that  secondary

document is a contract to which at least one party is different from

the parties to the contract in question, it would be a two contract

case.  In other words, if the secondary document is between other

parties or if only one of the parties to the contract in dispute is party

to an earlier contract to which a reference is made, then it would be

a two contract case.  In such a contract general reference to the

earlier contract would not be sufficient to incorporate the arbitration

clause.  However, if the reference is to standard terms in a contract

that would be a case of  ‘single contract’  and the use of  general

words to incorporate the arbitration agreement by a reference is

permissible.   As the reference in that case was to a standard form

of contract which was a single contract case, Justice Langley held

that the general words of incorporation were enough to incorporate

an arbitration clause.   

13. The  question  of  incorporation  of  the  arbitration  clause  from  an

earlier contract by general reference into a later  contract came up

for   consideration  before  the  Queen’s  Bench  Division  again  in

Habas Sinai Ve Tibbi Gazlar Isthisal Endustri AS v. Sometal

SAL [2010]  EWHC 29 (Comm).  The  contract  in  the  said  case

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pertained to sale of 10,000 metric tons of steel scrap.  There were

several terms in the contract under the headings material, quantity,

price, shipment, discharge, rate, payment and final weight.  Apart

from the said terms, the contract contained a clause which was in

the  following  terms:  “All  the  rest  will  be  same  as  our  previous

contracts.”

14. The  dispute  that  arose  in  that  case  was  whether  general  words

mentioned  above  were  capable  of  incorporating  an  arbitration

clause.   The  difference  in  approach between cases  in  which  the

parties  incorporate  the  terms  of  a  contract  between  the  other

parties or between one of them with a third party on the one hand

and those in which they incorporate the standard terms on the other

hand,  was noticed.   The following broad categories  in  which the

parties attempt to incorporate an arbitration clause were recognized

by the Court, which are as follows:  

“(1)  A and B make a contract in which they incorporate standard terms. These may be the standard terms of one party set out on the back of an offer letter or an order, or contained in another document to which reference is made; or terms embodied in the rules of an organisation of which A or B or both are members; or they may be terms standard in a particular trade or industry.

(2) A and B make a contract incorporating terms previously agreed between A and B in another contract or contracts to which they were both parties  

(3)  A and B make a contract incorporating terms agreed between A (or B) and C.  Common examples are a bill of lading incorporating the terms of a charter to which A is a party; reinsurance contracts incorporating the terms of  an underlying  insurance;  excess  insurance contracts  incorporating the terms of the primary layer of insurance; and building or engineering sub contracts incorporating the terms of a main contract or sub-sub contracts incorporating the terms of a sub contract.   (4) A and B make a contract incorporating terms agreed between C and D. Bills of lading, reinsurance and insurance contracts and building contracts may fall into this category.”

15. In  Habas’s case  (supra),  Justice  Christopher  Clarke  followed the

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ratio in the case of ‘the Athena’ (supra) and held that in single

contract cases (categories 1 and 2), a general reference would be

sufficient for incorporation of an arbitration clause from a standard

form  of  contract.   In  cases  falling  under  categories  3  and  4

mentioned above which are two contract cases, it was held that a

stricter rule has to be followed by insisting on a specific reference to

the arbitration clause from an earlier contract.  Reliance placed on

the judgment of Sir John Megaw in Aughton v MF Kent Services

[1991] 31 Con L.R. 60 was repelled in the following terms:  

“53 I  do not regard myself  as  bound by the decisions  of  the Court  of Appeal in Aughton v Kent and The Ethniki to reach a different conclusion. Both were two-contract cases. Further the judgments of Sir John Megaw and Lord Justice Ralph Gibson are, in part  in conflict  so as to preclude either of them being binding authority even in a two contract case. The agreement of Evans LJ with Sir John Megaw's “ analysis of the authorities with  regard  to  arbitration  clauses  and  specifically  with  regard  to  the incorporation of charterparty arbitration clauses into bills of lading  ” was obiter.”

16. The point  pertaining  to  the independent  nature  of  an arbitration

clause  being  determinative  of  the  dispute  pertaining  to

incorporation was also dealt with in the said judgment as follows:  

“51 Like Langley J, however, I do not accept that, in a single contract case, the independent nature of the arbitration clause should determine whether it is to be incorporated. A commercial lawyer would probably understand that  an  arbitration  clause  is  a  separate  contract  collateral  to  another substantive contract and that the expression “arbitration clause” is,  on that account, something of a misnomer for “the arbitration contract which is ancillary to the primary contract”. But a businessman would have no difficulty in regarding the arbitration clause (as he would call it) as part of a contract and as capable of incorporation, by appropriate wording, as any other  term  of  such  a  contract;  and  it  is,  as  it  seems  to  me  to  a businessman's understanding that the court should be disposed to. give effect. A businessman who had agreed with his counterparty a contract with 10 specific terms under various headings and then agreed with the same counterparty terms 1-5 under the same headings as before and, as to the rest, that all the terms of the previous contract should apply, would, I think, be surprised to find that “all” should be interpreted so as to mean “all but the arbitration clause”.

17. For a better understanding of the single and two contract cases and

reference to standard form terms it is relevant to examine  Russell

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on Arbitration 24  th   Edition (2015) which is as under: (See pp. 52-54, 24rd Edn.)

“Reference to standard form terms, single and two contract cases.  If the document sought to be incorporated is a standard form set of terms and conditions  the  courts  are  more  likely  to  accept  that  general  words  of incorporation will suffice.  This is because the parties can be expected to be  more  familiar  with  those  standard  terms,  including  the  arbitration clause.   In  Sea  Trade  Maritime  Corp  v.  Hellenic  Mutual  War  Risks Association  (Bermuda)  Ltd,  (The  “Athena”)  No.2  the  Court  drew  a distinction between what is described as a “two contract case”, that is where the arbitration clause is contained in a secondary document which is a contract to which at least one party is different from the parties to the contract in question, and “a single contract case” where the arbitration clause is in standard terms to be found in another document.  Relying on dictum of Bingham LJ in Federal Bulk Carries Inc v. C. Itoh & Co Ltd (The “Federal Bulker”), Langley J stated that:

“In principle, English law accepts incorporation of standard terms by the use of general words and, I would add, particularly so when the  terms  are  readily  available  and  the  question  arises  in  the context of dealings between established players in a well-known market.  The  principle,  as  the  dictum  makes  clear,  does  not distinguish between a term which is an arbitration clause and one which addresses other issues. In contrast, and for the very reason that  it  concerns  other  parties,  a  “stricter  rule”  is  applied  in charterparty/bills  of  lading  cases.  The  reason  given  is  that  the other  party  may  have  no  knowledge  nor  ready  means  of knowledge  of  the  relevant  terms.  Further,  as  the  authorities illustrate,  the  terms  of  an  arbitration  clause  may  require adjustment if  they are to be made to apply to the parties to a different contract.”

The Court therefore reinforced the distinction between incorporation by reference of standard form terms and of the terms of a different contract, and  concluded  that  in  a  single  contract  case  general  words  of incorporation are sufficient,  whereas by its  nature a two contract case may require specific reference to the other contract, unless the secondary document is stated to be based on standard form terms containing an arbitration agreement.  In that case, presumably specific reference to the arbitration clause would not be needed.  As discussed below, this approach has been endorsed in subsequent cases, albeit drawing a slightly different but “material” distinction between incorporation of the terms of a separate contract – standard or otherwise – made  between the same parties which are treated as “single contract” cases, even where there is in fact more than one  contract;  and those  where  the  terms to  be  incorporated are contained in a contract between one or more different parties which are treated as the “two contract” cases.    (Para 2-049)

Extension of the single contract cases. Recently,  the  courts  appear  to  have  extended  the  “single  contract” principle applicable to standard form contracts,  where general words of incorporation  will  suffice,  to  other  types  of  contract  where  the  same rationale  can  be  said  to  apply.  Thus,  if  the  document  sought  to  be incorporated is a bespoke contract between the same parties, the courts have accepted this  as a “single contract” case where general  words of incorporation  will  suffice,  even  though  the  other  contract  is  not  on standard  terms  and  constitutes  an  entirely  separate  agreement.  The rationale for this approach is that the parties have already contracted on the terms said to be incorporated and are therefore even more likely to be familiar with the term relied on than a party resisting incorporation of a standard  term.  Put  another  way,  if  general  words  of  incorporation  are sufficient for the latter, they should be even more so for the former. The courts also appear to have accepted as a “single contract” case a situation

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where the  contract referred to is between one of the parties to the original contract and a third party, where the contracts as a whole “were entered into  in  the  context  of  a  single  commercial  relationship”.(Para  2-050) [Emphasis Supplied]

18. This Court in  M.R. Engineers’ case, which is discussed in detail

supra, held the rule to be that an arbitration clause in an earlier

contract  cannot  be  incorporated  by  a  general  reference.   The

exception to the rule is a reference to a standard form of contract by

a  trade  association  or  a  professional  institution  in  which  case  a

general  reference  would  be  sufficient  for  incorporation  of  an

arbitration clause.   Reliance was placed by this Court on Russell on

Arbitration 23  rd   Edition (2007)  .  The development of law regarding

incorporation  after  the  judgment  in  M.R.  Engineers requires

careful  consideration. It  has been held in  Habas Sinai Ve Tibbi

Gazlar Isthisal Endustri AS v Sometal SAL [2010] EWHC 29

(Comm) that a standard form of one party is also recognized as a

‘single contract’  case.  In  the said case, it  was also held that in

single contract cases general reference is enough for incorporation

of an arbitration clause from a standard form of contract.  There is

no distinction that is drawn between standard forms by recognized

trade  associations  or  professional  institutions  on  one  hand  and

standard terms of one party on the other.   Russell on Arbitration

24  th   Edition (2015) also takes note of the Habas’s case.   

19. We are of the opinion that though general reference to an earlier

contract is not sufficient for incorporation of an arbitration clause in

the later contract, a general reference to a standard form would be

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enough  for  incorporation  of  the  arbitration  clause.    In  M.R.

Engineers this Court restricted the exceptions to standard form of

contract of trade associations and professional institutions.  In view

of the development of law after the judgment in M.R. Engineers’

case, we are of the opinion that a general reference to a consensual

standard form is sufficient for incorporation of an arbitration clause.

In other words, general reference to a standard form of contract of

one party will be enough for incorporation of arbitration clause. A

perusal  of  the  passage  from  Russell  on  Arbitration  24  th   Edition

(2015) would demonstrate the change in position of law pertaining

to incorporation when read in conjunction with the earlier edition

relied upon by this Court in  M.R. Engineers’  case.    We are in

agreement  with  the  judgment  in  M.R.  Engineer’s  case  with  a

modification that a general reference to a standard form of contract

of one party along with those of trade associations and professional

bodies will be sufficient to incorporate the arbitration clause.

20. In the present case, the purchase order was issued by the Appellant

in which it was categorically mentioned that the supply would be as

per  the  terms  mentioned  therein  and  in  the  attached  standard

terms  and  conditions.   The  Respondent  by  his  letter  dated

15.12.2012 confirmed its acceptance of the terms and conditions

mentioned  in  the  purchase  order  except  delivery  period.    The

dispute arose after the delivery of the goods.  No doubt, there is

nothing forthcoming from the pleadings or the submissions made by

the parties that the standard form attached to the purchase order is

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of  a  trade  association  or  a  professional  body.   However,  the

Respondent was aware of the standard terms and conditions which

were attached to the purchase order.  The purchase order is a single

contract and general reference to the standard form even if it is not

by  a  trade  association  or  a  professional  body  is  sufficient  for

incorporation of the arbitration clause.  

21. For  the  aforementioned  reasons,  the  appeal  is  allowed  and  the

judgment of the High Court is set aside.  Justice Sushil Harkauli is

appointed as the Arbitrator to adjudicate the dispute between the

parties.    

              ........................................J.                 [S.A. BOBDE]

..……................................J.                                                     [L. NAGESWARA RAO]

New Delhi; January 05, 2018  

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