HC: Usage of term Arbitration alone in Contract would not constitute an Arbitration Clause, Read Order

The Delhi High Court has observed that mere use of the word 'Arbitration' in the Clause's heading wouldn't inference that there exists an agreement to seek dispute resolution via Arbitation.

The single-judge bench of Justice Mukta Gupta dismissed the petition for appointment of an Arbitrator for resolving the disputes in relation to the software development arising out of the agreement  between the parties and costs.

The petitioner was facing issue in the completion of the project as delay has been caused by the respondent. Attempts were also made by the petitioner for amicable solution through dialogue but the same was in vain due to irresponsiveness of the respondent. As the last recourse, the petitioner sent a legal notice to the respondent invoking arbitration. The respondent denied having any such agreement.

The Court in line with the legal precendent, observed that mere use of word 'Arbitration' in the heading in the Clause of Agreement would not lead to the inference that there exists an agreement between such parties seeking resolution of disputes through arbitration.

"it is clear that mere use of the word ‘Arbitration’ in the heading in the Clause 11 of the Agreement between the parties in the present proceedings would not lead to the inference that there exists an agreement between the parties seeking resolution of disputes through arbitration."

Read Order Here: