Delhi District Court
M/S International Recreation Parks ... vs M/S Icon Advertising & Ors on 2 July, 2014
In the court of Ms. Ina Malhotra, District & Sessions Judge
South East : Saket Courts, New Delhi
Suit No. 68/13
M/s International Recreation Parks Pvt. Ltd.
.... Plaintiff
V E R S U S
M/s Icon Advertising & Ors. ..... Defendants
O R D E R
The defendant's application under Section 8 of the Arbitration and Conciliation Act has come up for arguments and hearing.
2. The plaintiff has filed this suit for recovery of Rs.11,30,753/. As per the averments, defendant no.1 through defendants 23 had taken on lease branding sites from the plaintiff at its commercial complex i.e. The Great India Place, Noida situated at plot no. A2, Sector 38A, Noida. The charges for various hoardings put up were Rs. 11 lakhs. On account of the outstanding, the plaintiff has filed the suit for recovery which has been resisted by the defendant by filing this application under Section 8 of the Arbitration and Conciliation Act.
3. It is the defendant's case that the agreement between the parties contained the clause for reference of disputes to Suit No. 68/13 Intl. Recreation Parks V. Icon Advt. Page...1 of 6 arbitration.
4. The plaintiff has opposed this application tooth and nail and has stated that there is no agreement between the parties so as to enforce arbitration.
It is in this background that the agreement has been perused. What has been filed in court by the defendant is an unsigned agreement stated to be a draft exchanged between the parties through email which has never been signed.
6. Ld. Counsel for the defendant/applicant submits that there is no requirement under the law for the arbitration agreement to be signed by the parties. The same is in writing and has been acted upon.
7. The argument of the Ld. Counsel for the defendant is misplaced keeping in view the facts of the present case. The agreement is only a draft. Moreover as has been pointed out by the Ld. Counsel for the plaintiff even as per this unsigned draft of the proposed agreement, in addition to clause with respect of settlement of disputes, it also gives the choice of approaching the civil courts at Delhi in all matters arising out of and/or concerning the transaction. It is further submitted by the Ld. Counsel for the plaintiff that the draft agreement cannot be stated to be an Suit No. 68/13 Intl. Recreation Parks V. Icon Advt. Page...2 of 6 agreement vide which arbitration can be enforced. Reliance is placed upon the decision of the Hon'ble High Court of Delhi in the matter of Asiasoft (India) Pvt. Ltd. V. Globesyn Technologies Ltd reported in 2005(2) R.A.J. 157(Del). On appraisal of the facts of the case, the Hon'ble High Court had dismissed the application under Section 8 of the Arbitration and Conciliation Act which mandates a judicial authority to refer the parties to arbitration if the subject matter of the action was the subject matter of an arbitration. In the aforesaid case law, it was observed by the Hon'ble Court that as per section 7 of the Act :
(1) .................. "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in:
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or
(c) an exchange of statements of claim and defence Suit No. 68/13 Intl. Recreation Parks V. Icon Advt. Page...3 of 6 in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract."
8. This clarifies the situation that any agreement, which if made in writing and contained in a document, has to be signed by the parties. Where proposed joint venture agreement sent was not executed by both the parties and the agreement did not bear the signature of any one party, it could not be said to contain the clause for reference of disputes to the arbitration.
9. Drawing parity with the facts of the case law, cited above, there is no merit in the argument advanced by the Ld. Counsel for the defendant that the suit cannot be entertained by a civil court. Clearly, what has been exchanged is a draft agreement. There is no further exchange which records the acceptance of the terms including the arbitration agreement. The Hon'ble High Court of Delhi had also opined in the matter of Pyrites, Phosphate and Chemicals V. Excel Shipping Enterprises & Ors reported in 2001(4) R.A.J. 660 that an agreement not signed by parties cannot be termed as an arbitration agreement. There has never been an Suit No. 68/13 Intl. Recreation Parks V. Icon Advt. Page...4 of 6 admission of the arbitration clause in any of the correspondence between the parties so as to give it any effect.
10. This view has also been reiterated by the Hon'ble Madras High Court in the matter of SAAGRR Infra Ltd. V. Pioneer Tools & Hardware reported in 2013(5) R.A.J. 498 (Mad). It has clearly been opined that in a written format the arbitration agreement must be signed by both the parties. Clearly, this is not the situation in the present case and therefore the prayer of the defendant vide their application under Section 8 of the Arbitration and Conciliation Act is not sustainable. This is notwithstanding the fact that even the draft agreement contained the clause for invoking the jurisdiction of the civil courts. Application dismissed.
Announced.
(Ina Malhotra) District & Sessions Judge South East, Saket Courts New Delhi 02.07.2014 Suit No. 68/13 Intl. Recreation Parks V. Icon Advt. Page...5 of 6 Suit No. 68/13 Present : Counsel for the parties Vide separate Judgment, the defendant's application under Section 8 of the Arbitration & Conciliation Act stands dismissed in terms thereof.
No written statement has been filed by the defendant which was at their own peril. However in the interest of justice one last opportunity is granted to the defendant to file their written statement subject to payment of Rs. 1000/ as cost.
List this case for filing of the Written Statement on 17.07.2014.
(Ina Malhotra) District & Sessions Judge South East, Saket Courts New Delhi 02.07.2014 Suit No. 68/13 Intl. Recreation Parks V. Icon Advt. Page...6 of 6