The Delhi High Court appointed an arbitrator under the arbitration clause in a Master Services Agreement (MSA), even though the dispute arose from a subsequent agreement that did not contain an arbitration clause.
Background
Unthinkable Solutions entered into a MSA with Ejohri Jewels for software development services. Disputes arose under a Statement of Work (SOW) issued under the MSA. Disputes arose and Unthinkable Solutions commenced arbitration.
Ejohri Jewels contended that the Master Agreement was unsigned and therefore not binding, and that the disputes arose under the SOW, which did not contain an arbitration clause. Unthinkable Solutions submitted a signed copy of the Master Agreement and presented correspondence which it said demonstrated that the SOW was an integral part of the Master Agreement.
Decision
The Court held that:
- The signed MSA contained an arbitration clause, and the correspondence showed that the SOW was executed pursuant to the MSA.
- §7(2) of the Arbitration and Conciliation Act 1996 stipulates that the existence of an arbitration agreement can be in the form of a clause in a contract or a separate agreement.
- As the SOW formed an integral part of the MSA, and the MSA contained an arbitration clause, the arbitration clause was also a part of the SOW.
- The Court relied on the judgments of the Supreme Court in MR Engineers v Som Datt Builders1 and NBCC (India) Ltd v Zillion Infraprojects Pvt Ltd2.
Footnotes
* ARB.P. 988/2024
1. (2009) 7 SCC 696
2. (2024) 7 SCC 174
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