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CS Professional · Arbitration, Mediation and Conciliation · Emerging Aspects: Fast Track and Virtual Arbitration

Sunrise Textiles Pvt Ltd (Surat) and Kaveri Dyes Ltd (Chennai) signed a supply contract with an arbitration clause. After a dispute, they exchanged emails in which each confirmed that the dispute would be referred to arbitration, and the email trail records this. Kaveri later argues there is no valid written arbitration agreement because nobody signed a document. Under the Act, what is the position?

The agreement is in writing. Section 7(4)(b) accepts an exchange of communication through electronic means that provides a record of the agreement, so signed paper is not essential. The email trail confirming reference to arbitration therefore satisfies the writing requirement, and Kaveri's objection fails.

  1. AThe agreement is not in writing because only a document signed by the parties qualifies
  2. BThe agreement is in writing because an exchange of communication through electronic means that provides a record of the agreement qualifiesCorrect
  3. CThe agreement is valid only if the emails are later printed and signed
  4. DThe agreement is valid only if a court confirms it before the tribunal is appointed

Explanation

Section 7(4)(b) treats an arbitration agreement as being in writing if it is contained in an exchange of letters, telex, telegrams or other means of telecommunication, including communication through electronic means, which provide a record of the agreement. The email trail therefore satisfies the writing requirement. Option A ignores clause (b), which is an alternative to a signed document.

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