Unsigned Contract – SC affirms Arbitration via conduct of parties

 

 

 

Judgment  of the Supreme Court in Civil Appeal NO.11067 of 2025 of Glencore International AG  Vs.  M/s. Shree Ganesh Metals and another

 The appellant is a Swiss  Company and the Respondent No.1 is the Indian proprietorship concern.

 The respondent No.1 had purchased zinc metal from the appellant under contracts of 2011 and 2012.  The contracts provided for arbitration clause to be resolved under the Rules of LCIA at London.

 For the fifth contract, after exchange of the email correspondence, the appellant signed the contract dated 11.3.2016 and sent to the respondent no.1 for signatures.  Although the respondent no.1 did not sign the contract, the appellant supplied zinc metal and it was accepted by the respondent no.1. There were disputes between the parties.

 In 2017, the respondent no.1 filed civil suit for declaration that the invocation of the Standby Letters of Credit by the appellant was null and void and for decree of Rs.8 crores.

 The appellant filed application under Section 45 of the AA to refer the matter to the arbitration.

 The learned Single Judge rejected the said application on the ground that there was no concluded contract for want of signature of respondent no.1.   This was confirmed by the Division Bench.

 In that context, it was HELD that there is no denying the legal proposition that an arbitration agreement can be inferred even from an exchange of letters, including communication through electronic means, which provide a record of the agreement.   The mere fact that the contract in question was not signed by the respondent no.1 would not obviate from this principle when the conduct of the parties in furtherance of the said contract, clearly manifested respondent no.1’s acceptance of the terms and conditions contained therein which would include the arbitration agreement.