M/S. GOVIND RUBBER LTD. versus M/S. LOUIDS DREYFUS COMMODITIES ASIA PVT. LTD.

Citation: [2014] 12 S.C.R. 488 · Decided: 16-12-2014 · Supreme Court of India · Bench: M.Y. EQBAL · Disposal: Dismissed

Cited by 7 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
(2014] 12 S.C.R. 488 
M/S. GOVIND RUBBER LTD. 
v .. 
M/S. LOU IDS DREYFUS COMMODITIES ASIA PVT. LTD. 
(Civil Appeal No. 11438 of 2014) 
DECEMBER 16, 2014 
[M.Y. EQBAL AND R. BANUMATHI, JJ.] 
Arbitration and Conciliation Act, 1996: ss.6, 7(4), 7(5) -
Arbitration agreement - Whether the parties we~ ad idem to 
C refer the dispute for arbitration to the Singapore commodity 
Exchange in the absence of arbitration agreement - Held: An 
arbitration agreement even though in writing need not be 
signed by the parties if the record of agreement is provided 
by exchange of letters, telex, telegrams or other means of 
D telecommunication - s. 7(4)(c) provides that there can be an 
arbitration agreement in the exchange of statements of claims 
and defence in which the existence of the agreement is 
alleged by one party and not denied by the other - If it can 
be prima facie shown that the parties are at ad idem, then 
E mere fact of one party not signing the agreement cannot 
absolve himself from the liability under the agreement -
Therefore, signature is not a formal requirement u/s. 7(4)(b) or 
s. 7(4)(c) or u/s. 7(5) of the Act - In the instant case, the 
intention of the parties is clear from the correspondence 
F regarding their meeting of mind and ad idem to the terms of 
sale contract which contained the forum of dispute resolution 
at Singapore Commodity Exchange - Apart from that, after 
the dispute was referred to Singapore Commodity Exchange 
for arbitration, the appellant in response to the notice made 
G a counter claim before the Arbitral Tribunal contending that 
the appellant had incurred huge loss in view of the failure on 
the part of the respondent to supply the goods in time - By 
making a counter claim, the appellant indeed submitted to the 
jurisdiction of the arbitrator. 
H 
488 
GOVIND RUBBER LTD. v. LOU IDS DREYFUS 
COMMODITIES ASIA PVT. LTD. 
Dismissing the appeal, the .Court 
489 
HELD: 1. An agreement even if not signed by the 
parties can be spelt out from correspondence exchanged 
between the parties. However it is the duty of the Court 
A 
to construe correspondence with a view to arrive at the 
B 
conclusion whether there was any meeting of mind 
between the parties which could create a binding contract 
between them. It is necessary for the Court to find out 
from the correspondence as to whether the parties were 
ad idem to the terms of contract. While construing an 
C 
arbitration agreement or arbitration clause, the Courts 
have to adopt a pragmatic and not technical approach. 
[Paras 12 and 13] [497-G-H] 
M.R. Engineers and Contractors (Pvt.) vs. Som Dutt 
Builders Ltd. (2009) 7 SCC 696:2009 (10) SCR 373; 
D 
Rukmanibai Gupta vs. Collector (1980) 4 SCC 556 - relied 
on. 
2.A perusal of Section 7 of AC Act would show that 
in order to constitute an arbitration agreement, it need not 
E 
be signed by all the parties. Section 7(3) of the Act 
provides that the arbitration agreement shall be in writing, 
which is a mandatory requirement. Section 7(4) states that 
the arbitration agreement shall be in writing, if it is a 
document signed by all the parties. But a perusal of 
clauses (b) & (t:) of Section 7(4) would show that a written 
F 
document which may not be signed by the parties even 
then 
it 
can 
be 
arbitration 
agreement. 
Section 7(4)(b) provides that an arbitration agreement can 
be culled out from an exchange of letters, telex, telegrams 
or other means of telecommunication which provide a G 
record of the agreement. Reading the provisions it can 
safely be concluded that an arbitration agreement even 
though in writing need not be signed by the parties if the 
record of agreement is provided by exchange of letters, 
telex, telegrams or other means of telecommunication. 
H 
490 
SUPREME COURT REPORTS 
·[2014] 12 S.C.R. 
A Section 7(4)(c) provides there can be an arbitration 
agreement in the exchange of statements of claims and 
defence in which the existence of the agreement is 
alleged by one party and not denied by the other. If it can 
be prima facie shown that the parties are at ad idem, then 
B mere fact of one party not signing the agreement cannot. 
absolve himself from the liability under the agreement. In 
the present day of E-commerce, in cases of internet 
purchases, tele purchases, ticket booking on internet and 
in standard forms of contract, terms and conditions are 
c agreed upon. In such agreements, if the identity of the 
parties is established, and there is 

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