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Notice Under Sec 21 Must Before Referring Disputes To Arbitration

The Delhi High Court, in ALUPRO BUILDING SYSTEMS PVT LTD vs OZONE OVERSEAS PVT LTD,  has clarified and settled that Section 21 of the Arbitration & Conciliation Act 1996, is mandatory to be complied with before reference of disputes to arbitration.

In other words, without such notice, the arbitration proceedings that are commenced would be unsustainable in law.

The court also held that mere acceptance of supplies by a party on the basis of invoices containing an arbitration clause would not amount to acceptance by the party of such arbitration clause. The court clarified that there could not be an arbitration agreement by implication and a mere endorsement of receipt of goods on the invoices cannot lead to an inference that a party agreed to the arbitration clause printed on the said invoices. Holding that the same is not an arbitration agreement which could be validly invoked, the court declared the award as null and void.

Article referred: http://www.livelaw.in/notice-sec-21-must-referring-disputes-arbitration-delhi-hc-read-order/

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