LexTRIMEX INTERNATIONAL FZE LTD. DUBAI versus VEDANTA ALUMINIUM LIMITED, INDIA
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[2010] 1 S.C.R. 820 A TRIMEX INTERNATIONAL FZE LTD. DUBAI B v. VEDANTA ALUMINIUM LIMITED, INDIA Arbitration Petition No. 10 of 2009 JANUARY 22, 2010 [P. SATHASIVAM, J.) Contract Act, 1872: ss. 4, 7 - Concluded contract containing arbitration clause - If respondent accepts the offer C of petitioner following a very strict time schedule, he cannot escape from the obligations that flowed from such an action - Arbitration clause can be .inferred from various documents duly approved and signed by the parties in the form of exchange of e-mails, letter, telex, telegrams and other means D of tele-communication even in the absence of signed agreement - If no inference can be drawn from the facts that the parties intended to be bound only when a formal agreement had been executed, the validity of the agreement would not be affected by its lack of formality - On facts, the E Commercial Offer carried no clause making the conclusion of the contra.ct incumbent upon the Purchase Order - Therefore, the moment commercial offer was accepted by the respondent, the contract came into existence - Since the contract contained arbitration clause, petitioner made out case F for appointment of arbitrator - Arbitration. Petitioner's case was that on 15.10.2007, it submitted a commercial offer through e.-mail for supply of Bauxite to the respondent. After exchange of several e-mails, respondent conveyed acceptance of offer through e-mail G on 16.10.2007 confirming the supply of 5 shipments of Bauxite. Dispute arose and petitioner served arbitration notice on the respondent. Respondent rejected the arDitration notice stating that there was no concluded contract between them. Petitioner filed arbitration petition H 820 TRIMEX INTERNATIONAL FZE LTD. DUBAI v. VEDANTA 821 ALUMINIUM LTD, INDIA for appointment of arbitrator. Allowing the arbitration petition, the Court A B HELD: 1.1. On 15.10.2007 at 4.26 p.m. the petitioner submitted commercial offer wherein clause 6 contained arbitration clause i.e. "this contract is governed by Indian law and arbitration in Mumbai courts". At 5.34 p.m. though respondents offered their comments, no comments were made in respect oL'arbitration clause'. At 6.04 p.m. the petitioner sent a reply to the comments made by the respondent. Again on 16.10.2007, at 11.28 a.m. though C respondents suggested certain additional information on the offer note, again no suggestion was made with regard to arbitration clause. At 11.48 a.m. the petitioner sent an e-mail extending validity of the offer by another one hour. At 01.38 p.m., the respond.en( made certain suggestions D on the demurrage asking the petitioner to either reduce the freight rate or the demurrage rate. On the same day at 02.01 p.m., the petitioner sent a reply on the demurrage stating that the rates cannot be reduced any further. At 02.41 p.m., the respondent informed the petitioner that E they would like to have a termination clause after two shipments. At 03.06 p.m., the petitioner sent a mail stating that "no owner will accept this condition. Respondent may accept two or five quickly". At 03.06 p.m. the respondent accepted the offer for five shipments. In response to the same at 03.49 p.m., the petitioner thanked F the respondent for acceptance and conveyed that it was "just in time" to go to the ship owners. At 03.57 p.m. the petitioner finalized the contract with the bauxite supplier in Australia. Apart from the minute to minute G correspondences exchanged between the parties regarding offer and acceptance, the offer of 15.10.2007 contained all essential ingredients for a valid acceptance by the respondents. The correspondence exchanged between the parties clearly go to show that after understanding all the details and the confirmation by the H 822 SUPREME COURT REPORTS [201 O] 1 S.C.R. A respondent, the petitioner sent a reply stating that "thanks for the confirmation, just in time to go to the ship owners". All these details clearly establish that both the parties were aware of various conditions and understood the terms and finally the charter was entered into a B contract by the parties on 17.10.2007. (Para 7) (859-H; 860- A-H; 861-A-D] 1.2. Once the contract is concluded orally or in writing, the mere fact that a formal contract has to be C prepared and initialed by the parties would not affect either the acceptance of the contract so entered into or implementa
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