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Unsigned Arbitration Agreement Not Invalid In All Cases

In Caravel Shipping Services Pvt. Ltd. Vs. Premier Sea Foods Exim Pvt. Ltd., the argument of the plaintiff was that since the Bill of Lading was not signed, it is not bound by the arbitration clause contained in that document. It was contended that Section 7(4) (a) of the Arbitration and Conciliation Act, 1996, requires an arbitration agreement to be in a document that is signed by the parties.

The Supreme Court referring to the judgment in Jugal Kishore Rameshwardas vs. Mrs. Goolbai Hormusji, held that an arbitration agreement needs to be in writing though it need not be signed. The fact that the arbitration agreement shall be in writing is continued in the 1996 Act in Section 7(3) thereof. Section 7(4) only further adds that an arbitration agreement would be found in the circumstances mentioned in the three sub-clauses that make up Section 7(4). This does not mean that in all cases an  arbitration agreement needs to be signed.

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