Bombay HC on Term Sheet & Arbitration

Judgment dated 12.8.2026 of the High Court of Bombay in Commercial Arbitration Application No.14 of 2016 of Urban Infrastructure Trustees Limited   Vs.  Mr Bhavik Bhimjiyani and others

On 21.2.2007, the applicant executed the Term Sheet with the Respondent for the terms and conditions in respect of the investment of the Applicant in Neelkanth.

The Term Sheet was signed by the respondent no.1 for himself and as agent of other promoters of Neelkanth operating as a group.

Clause 41 of the Term Sheet dated 21.2.2007.

Whether the Term Sheet dated. 21.02.2007 is a concluded contract with arbitration clause or whether the Term Sheet only makes a reference to a future contract and has no binding effect on the parties?

(ii) Whether the Applicant has locus to file the present Application, i.e., whether it can represent the party to the Term Sheet?

(iii) Whether this court can examine the issue of limitation of the underlying claim made in section 11 application? And If yes, whether the claim made in the present application is barred by limitation?

(iv) Whether the Respondents can be referred to arbitration as signatory and non-signatory parties to the Term Sheet?

In the instant case, there is an arbitration clause in the Term Sheet and the parties have acted upon the Term Sheet to an extent as provided in the Term Sheet, thus, any dispute arising therefrom is required to be adjudicated as provided in the arbitration clause of the Term Sheet. The Term Sheet is not merely the terms of future agreement that would come into existence, but the working of the Term Sheet itself provides for arbitration. This Court is prima facie of the view that there is an arbitration clause in the Term Sheet and the parties have acted upon the Term Sheet and thus, the dispute arises from the Term Sheet has to be referred to the Arbitrator. The parties may take up the matter further before the arbitrator.