Judgment:
S.C. Jain, J.
(1) The facts giving rise to this a petition &re; that M/S Indian Aluminium Cables Ltd, hereinafter called the petitioner entered into negotiations with M/S Vistas Trading Company having its registered office at 106B, Sainik Farm, New Delhi, authorised agent of respondent M/S Exude Ltd, a company incorporated under the laws if kingdom for purchasing 1500 M.T.of Ec grade of aluminium rod. The terms of these discussions were communicated by Vistas Trading Company to the respondent thought telex dated 14.9.90 (Ex AW1/1) mentioning the material to be supplied, quantity of the material, price and direction for shipment on different dales. The terms of the settlement between the petitioner and Vistas Trading Company, the authorised agent of the respondent were accepted by the respondent and the acceptance was conveyed to Vistas Trading Co. with a copy to the petitioner on 17.9.90 (ExAW1/2). In pursuance of this agreement duly arrived at between the parties regarding the sale of 1500 M.T. of E.C. grade aluminium rod, the petitioner accepted 250 Mt of the said material and payment was made accordingly and thereafter on account of some restrictions imposed by the Reserve Bank of India, as per the case of the petitioner, further deliveries could not be taken by them which gave rise to disputes and differences between the parties touching this agreement of sale of 1500 M.T.of E.C. grade aluminium rod and a unilateral arbitration reference was threatened to be made for arbitration to London Metal Exchange. That reference of the matter to London Metal Exchange has been challenged by the petitioner in this petition on various grounds pleading, inter alia, that the said agreement to Sell as evidenced by two telex one dated 14.9.90 by Vistas Trading Co to the respondent and the other dated 17.9.90 addressed by the respondent to Vistas Trading with a copy to the petitioner does not contain any arbitration clause on which the parties had ever agreed to refer the mater to arbitration of London Metal Exchange or to anyone else.
(2) The petitioner in its telex dated 9.8.91 objected to the purported reference to the arbitration of London Metal Exchange alleging that the terms and conditions of the agreement duly entered between the parties are specified in telex dated 14.9.90 and 17.9.90 and they do not contain any arbitration clause. The receipt of any type of contract containing any arbitration clause or entering into any arbitration agreement has been specifically denied by the petitioner. In these circumstances, the act of the respondent referring the disputes to the arbitration of London Metal Exchange has been challenged in this petition by seeking a relief of declaration that no arbitration agreement for reference of the alleged disputes to London Metal Exchange is in existence between the parties and thereforee, the purported reference under the agreement referred by the respondent to London Metal Exchange is wholly without jurisdiction and illegal and not binding.
(3) This petition has been contested by the respondent who filed written reply pleading inter alias that the petition under Section 33 of the Arbitration Act for determining the existence and or validity of the agreement as envisaged under the Contract No. S-22616 dated 14.9.90 is not maintainable in the present form and are liable to be dismissed because in view of the arbitration agreement between the parties the venue for arbitration is in London and the arbitration proceedings will be governed in accordance with the laws of England and that the only authority having supervisory powers with respect to the arbitration proceedings in England, is the English court of Justice. On merits it has been pleaded that the parties to this petition entered into an agreement providing the arbitration clause which specifically provides that the arbitration proceedings will be governed by the laws of England. As per the petitioner's own case the parties have entered into a valid and binding contract for the sale and purchase of 1500 M.T. of E.C. grade aluminium rod and in February, 1991 received delivery of 250 M.T. of E.C.grade aluminium rod and also made full payment for the same and for the balance quantity he refused NN to take delivery due to restrictions imposed by the Reserve Bank of India. In view of this fact the petitioner is estopped from questioning the authority of the arbitration agreement contained therein.
(4) The learned counsel for the petitioner Mr Kapil Sibbal Sr Advocate assisted by Mr B. Mohan advocate argued that the alleged contract No.S-22616 dated 14.9.90. was neither received by the petitioner nor any such arbitration agreement was reduced in writing nor it was ever signed by the petitioner. There is no arbitration agreement in existence between the parties and thereforee, the petitioner cannot be compelled to submit to the jurisdiction of London Metal Exchange, the alleged arbitrator to whom the respondent threatened to refer the disputes and differences between the parties touching this contract for arbitration. According to him the respondent has to prove the existence .of the alleged arbitration agreement between the parties. He drew my attention to the telex sent by the petitioner dated 14.9.90 (Ex.AW1/1) which is the basis of the contract with respect to supply of 1500 Mt Ec grade aluminum rod. It does not contain any arbitration clause. My attention has also been drawn to telex dated 17.9.90 which also does not mention about the arbitration clause. These are the two telex (Ex AW1/1 and AW1/2) which have concluded the contract between the parties and both these documents do not contain arbitration clause. According to him reference in Ex AW1/2 that typed contract S-22616 will follow by post has never been received by the petitioner and rather it suggests that at the time when the proposal contained in Ex AW1/1 was accepted by the respondent vide their telex Ex AWI/2 there was no such contract S 22616 in existence to the knowledge of the petitioner. Regarding reference to the contract S 22616 in future correspondence, counsel, submitted that the contract which was entered into between the parties is evidenced in Ex AW1/1 and AW1/2 If the respondent has given the number of the contract as S-22616 and it included the arbitration clause without the consent and knowledge of the petitioner, it cannot be made binding on the petitioner. When no arbitration agreement exists between the parties, the question of its validity or invalidity will be a secondary thing. He also drew my attention towards the affidavit filed by Shri S.S.Bhuwania, Managing Director of the petitioner in which he has specifically mentioned that the petitioner never entered into any arbitration agreement. The said contract S-22616 dated 14.9.90 was never received by the petitioner and that there existed no arbitration agreement between the parties. According to the learned counsel the story put forward by the respondent about the sending of the alleged contract S-22616 to the petitioner falls to the ground as per the contrary stand taken by the respondent from time to time. One of the stands of the respondent is that they sent the contract to the petitioner by post and the other stand taken by the respondent is that Mr.Puneet Dhanda of Vistas Trading Co personally delivered it to the petitioner. No postal receipt showing dispatch of the contract has been proved by the respondent. According to the learned counsel, this theory, as now put up by the respondent about the delivery of the contract, which the petitioner never received is false and afterthought. The learned counsel also pointed out that the footnote on the alleged contract says 'please countersign the attached duplicate and send by post''. The respondent never received the duplicate duly countersigned by the petitioner and they never asked the petitioner to comply with the request for sending the duplicate duly counter signed, meaning thereby that no such contract was ever sent by the respondent to the petitioner nor the petitioner received the same. He argued that the reference of a contract can be made in future correspondence but that reference should be construed only with respect to admitted agreement. In this case it is not admitted fact that there existed any arbitration agreement between the parties or that the contents of the alleged contract was ever brought to the notice of the petitioner containing arbitration clause. What the petitioners were understanding it was about the contract of supply of 1500 Mt of Ec grade aluminium rod which was mentioned in two telex (EX AW1/1 and AW1/2). Learned counsel further submitted that a petition under Section 33 of the Arbitration Act is maintainable when it is intended to challenge the existence of arbitration agreement or an award.
(5) Learned counsel for the respondent argued that this petition under Section 33 of the Arbitration Act for determining the existence and/or validity of the Arbitration Act as envisaged in contract S-22616 dated 14.9.90 is not maintainable and is liable to be dismissed. According to him, nationality of the arbitration agreement is British and as such the Arbitrator has to conduct the arbitration in accordance with the rules of the London Metal Exchange in accordance with the laws of England and thereforee, the Indian Arbitration Act is not applicable to the agreement having foreign nationality. He further argued that since the arbitration is foreign, this court has no jurisdiction over London Metal Exchange, the named arbitrator in the present case. On this ground also this petition is not maintainable. Reliance has been placed on -the decision of the Supreme Court in Suresh Jindal vs . Rizsoli Corriere Delia Sera Prodzioni : AIR1991SC2092 by the learned counsel for the respondent regarding the foreign contract.
(6) According to the learned counsel, it is well settled law that to constitute the arbitration agreement in writing it is not necessary that it should be signed by the parties. It is sufficient that the terms of settlement are reduced to writing. He cited two decisions of the Supreme Court reported as : AIR1963SC1417 and : [1955]2SCR857 . According to the learned counsel contract S 22616 was reduced to writing and it was duly sent' to the petitioner for its information. He also argued that in all the correspondence the parties mentioned about this contract S-22616 and reference by incorporation is permissible in law. According to the learned counsel it does not lie in the mouth of the petitioners to say that they were not aware of this contract containing the arbitration clause when they themselves quoted this contract number in future correspondence. He also argued that the arbitration clause has been expressly set out and that it is petitioner's own case that part performance of the contract took place and complete payment was made and as a result of the part performance the petitioner is estopped from denying the existence of the arbitration clause. He drew my attention towards the affidavits filed by the respondent of various persons in support of the contention that the contract S 22616 was duly received by the petitioner and that they were aware of the contents of the contract having arbitration clause. He also drew my attention towards various correspondence on the file showing that in alt the correspondence this contract number S 22616 has been mentioned.
(7) The main question which requires determination in this case is whether the parties to this petition entered into an arbitration agreement as alleged. In this regard from the record it is apparent and it is also not disputed that M/S Vistas Trading Company having its registered office at Sainik Farm New Delhi (India) are the authorised agent of the respondent company. On account of negotiations between the petitioner and Vistas Trading Company on behalf of the respondent the terms of the agreement for the supply of 1500 Mt Of Ec grade aluminium rod Were sent to the respondent at London on 14.9.90 vide telex Ex AW1/1. In response to that communication for the respondent vide telex dated 17.9.90 ExAW1/2 confirmed having made a sale of 1500 Mt of Ec grade aluminium rod to the petitioner on the terms and conditions as mentioned in that communication. Both these documents AW1/1 and AW1/2 are sufficient to conclude the contract as far as supply of the said goods is concerned. All the terms of the agreement are contained in these two documents and nothing more was required to be completed as far as that transaction was concerned. There is no mention about referring of disputes and differences to the arbitration in either of these two documents meaning thereby that at that time the parties had not agreed to refer the disputes and differences to arbitration. It is not the case of either of the parties that in every contract arbitration clause should exist. It is for the parties whether to take their disputes and differences to arbitration or to seek the remedy in the court of law as per the law applicable to them. In the letter dated 17.9.90 sent by the respondent there is mention that 'our typed contract S-22616 will follow by post'. It means that typed contract S-22616 was not in existence on 14.9.90 when the discussion regarding contract took place between the petitioner and Vistas Trading Company New Delhi India). It is also not apparent from record that the petitioner had agreed to incorporate the arbitration clause in this agreement. This agreement was unilaterally got typed by the respondent and allegedly sent to the petitioner. This contract containing the arbitration clause cannot be said to be bilateral act of both the parlies. No doubt, it is true that arbitration agreement may not be signed by the parties but it must be in writing and parties must have agreed to it. In this case, both these documents AW1/1 and AWI/2, which form part of the contract do not contain any such arbitration clause.
(8) In this regard both the parties have filed their affidevits. Affidavits filed by the respondent are those of Robin A, Austin, H.L.Raina,Puneet Dhanda. Mr Austin and Raina belong to legal profession and they are connected with the respondent regarding their legal matters, whereas Puneet Dhanda is the proprietor of Vistas Trading Company, an agent of the respondent in India. The petitioners have controverter the allegations made in the affidavits filed on behalf of the respondent. Mr. M.L.Birmiwala, Secretary of the petitioner company, Mr. S.C. Kaushik export officer of the petitioner, Mr S.S.Bhuwania, Managing Director of the petitioner company in their affidavits have controverter the assertions of the respondent about the execution of the contract No.S-22616 and that receipt of any such contract by them at any time. Leaving aside the affidavits of the respective parties one thing is clear that the respondent has not proved that the contract S -22616 was dispatched or sent to the petitioner by post at any time as alleged. When the respondent found that they will not be in a position to show the dispatch of the alleged contract, a different stand was taken and it was got stated in the affidavit of Shri Puneet Dhanda that this contract was personally handed over by him to the petitioner. Such type of contrary stand does not help the respondent in showing or proving the execution of any contract having arbitration clause.
(9) Regarding mentioning of contract number S-22616 in the future correspondence between the parties it cannot be presumed that the petitioner had known about the existence of the arbitration clause in this agreement. As stated by them in the affidavits and as mentioned in AW1/1 and AW1/2 they only knew that the contract was with respect to supply of the material i.e. 1500M.T. of E.C.grade aluminium rod on the terms and conditions mentioned in these two documents. There is no arbitration clause mentioned in these two documents. By quoting the contract No.S-22616 in future correspondence which number the petitioners came to know by the correspondence of the respondent the petitioners would not be bound by the arbitration clause to which they had never agreed. This plea does not help the respondent in this case. Each case depends on its own merits.
(10) From the evidence, oral as well as documentary I am not inclined to hold that the parties entered into any arbitration agreement or there existed any arbitration agreement between the parties referring the disputes to the London Metal Exchange.
(11) When the existence of the arbitration agreement between the parties is not established on record, the respondent cannot take the plea that this court in India has no jurisdiction. The decision of the Supreme Court in Renusagar Power Co Ltd vs . General Electric Company : [1985]1SCR432 and Suresh Jindal v. Rizsoli Della : AIR1991SC2092 do not apply to the facts of the present case. Each case is to be decided on the basis of facts of that very case. Since the parties had not entered into any arbitration agreement in this case provisions of Foreign Awards (Recognition and Enforcement) Act 1961 will not apply to this case. A joint reading of Sections 32 and 33 of the Arbitration Act would make it clear that real mode of challenging the existence, validity or effect of an arbitration agreement or an award is by way of application under Section 33. When the existence of an arbitration agreement as alleged by the respondent is not established on record, it becomes futile to argue that nationality of the agreement is British and as such the arbitrator has to conduct the arbitration in accordance with the rules of London Metal Exchange. This question would have arisen if the respondent could have proved that there existed any arbitration agreement between the parties and that the nationality of the agreement is Brithsh. The words 'any party' in Section 33 of the Arbitration Act should be so construed so as to cover a person who is claimed to be a party to an agreement of arbitration although he does not admit its execution.
(12) Under these circumstances I hold that there is no arbitration agreement in existence between the parties for reference of the alleged disputes to London Metal Exchange and thereforee the purported reference of disputes under the alleged agreement by the respondent to the London Metal Exchange is without jurisdiction, illegal and not binding on the petitioner. However, the respondent may take any other action for the alleged breach of the contract as contained in documents Ex AW1/1 and AWI/2 in the court of law by filing a regular suit in this regard, if so advised.
(13) There is no order as to costs.