An unsigned arbitration clause is enforceable if the parties' conduct evidences consent
Glencore International AG v. SGM Metals
Supreme Court of India | 2025 SCC OnLine SC 1815
The Supreme Court recently held that an arbitration clause in an unsigned contract may be valid if the parties' conduct evidences consent. This ruling provides a significant clarification that even an unsigned arbitration agreement can bind parties where consent is evident through conduct and correspondence. It reduces the risk of opportunistic avoidance of arbitration by withholding signatures and reinforces confidence in India's pro-arbitration stance. Businesses should ensure meticulous documentation – through invoices, bank instruments, and communications – to evidence consent. The decision strengthens contractual certainty and signals that substance, not mere formality, governs arbitration enforceability.
SUMMARY OF FACTS
Building on their prior transactions, Glencore International AG (Glencore), a Swiss commodity trading company and Shree Ganesh Metals (SGM) entered into an agreement for the supply of 6,000 metric tons of zinc metal.
While Glencore signed and sent the finalised contract to SGM, the latter never physically signed the document (Contract). However, both parties continued dealings under the terms reflected in the unsigned Contract.
Glencore supplied 2,000 metric tons of zinc, along with invoices referencing the Contract, while SGM procured Standby Letters of Credit also referring to it; party correspondences consistently referred to the Contract and its performance.
Disputes arose, and SGM filed a civil suit. Glencore sought reference to arbitration under the Contract under Section 45 of the Arbitration and Conciliation Act, 1996 (Act). The Delhi High Court held that in the absence of signatures, no contract had been concluded and consequently, no arbitration agreement came into existence.
Aggrieved, Glencore approached the Supreme Court.
DECISION OF THE COURT
The Supreme Court reversed the Delhi High Court's decision, emphasising that an arbitration agreement in writing does not require the signatures of all parties if their conduct evidences consent. Signature is not indispensable, and an arbitration agreement's enforceability depends chiefly on written evidence of consensus ad idem.1
Clear evidence of agreement and performance cannot defeat the agreed route of arbitration, and the totality of communications and commercial conduct must be considered to discern whether parties intended to arbitrate their disputes.
Substantial performance through delivery of goods, coupled with consistent references to the Contract in invoices, Letters of Credit, and party correspondence, constituted overwhelming evidence of assent to the arbitration agreement.
Further, under Section 45 of the Act, the Court's obligation is limited – once a prima facie case for the existence of a binding arbitration agreement is made, reference to arbitration must follow without unnecessarily conducting a 'mini-trial', leaving deeper disputes about validity primarily for the arbitral tribunal.
A purely formalistic interpretation of arbitration clauses must not be adopted, particularly in high-value commercial contracts involving electronic communications, unsigned proformas, and other modern modes of recording consensus. Citing Scrutton on Charter Parties, the Court endorsed a commercially sensible approach, favouring the enforcement of arbitration agreements.2
NCLT is empowered to adjudicate on issues of fraud integral to oppression and mismanagement
Shailja Krishna v. Satori Global Ltd
Supreme Court of India | 2025 SCC OnLine SC 1889
The Supreme Court recently held that the National Company Law Tribunal (NCLT) is empowered to adjudicate allegations of fraud when such fraud is central to the claims of oppression and mismanagement, aIirming its role as a quasi-judicial body rather than a mere summary forum. This pro-shareholder ruling expands the Tribunal's jurisdiction in fraud-related company disputes.
This approach appears to contrast with IFB Agro Industries,3 where the Supreme Court observed that serious fraud allegations such as coercion and forgery, involving extensive evidence, fall outside NCLT's procedural scope and must be pursued in Civil Courts. The divergence is reconciled by distinguishing incidental fraud, which may be dealt with by Civil Courts, from foundational fraud, which triggers NCLT intervention. This pragmatic distinction allows stakeholders to resolve critical corporate disputes under company law without resorting to protracted civil litigation, ensuring timely protection of shareholder rights and eIective corporate governance, without undermining the procedural safeguards of a full trial.
SUMMARY OF FACTS
Shailja Krishna, a majority shareholder and director of Satori Global Ltd, alleged fraudulent transfer of her shares and ouster from management.
She claimed her husband and family members coerced her into signing blank documents, fabricated her resignation, and transferred her entire shareholding to her mother-in-law under a purported gift deed.
She challenged the validity of the gift deed, alleged manipulation of share transfer forms, and contested board meetings convened without notice or quorum.
In 2018, the NCLT, Allahabad, passed an order in her favour, invalidating the transfer of her shares and reinstating her as shareholder and director.
Reversing the decision, the National Company Law Appellate Tribunal, New Delhi (NCLAT), held that the NCLT lacked jurisdiction to decide issues pertaining to fraud, and directed Shailja to approach the Civil Courts under the Specific Relief Act, 1963.
Aggrieved, Shailja approached the Supreme Court.
DECISION OF THE COURT
The Supreme Court set aside the NCLAT's order and held that the NCLT has wide powers to decide issues integral to oppression and mismanagement, including examining allegations of fraud, under Sections 397 and 398 of the Companies Act, 1956 and Section 242 of the Companies Act, 2013.
The test is whether the fraud is foundational to shareholder rights and company adairs, and not whether it involves disputed facts.
Mere allegation of fraud does not automatically trigger the Civil Court's jurisdiction. The role of the NCLT is to provide edective and immediate remedies, and it cannot abdicate this duty by pushing disputes to Civil Courts when fraud is central to the complaint.
On facts, the following acts collectively amounted to oppression and mismanagement, and therefore, Shailja was reinstated as shareholder and director:
- Invalid gift deed: The gift deed was held invalid as it contravened the Articles of Association and was executed under suspicious and fraudulent circumstances.
- Defective share transfers: The share transfer forms were found to be tampered with and backdated beyond the statutory timelines, thereby rendering them void.
- Invalid board meetings: The board meetings accepting her resignation and appointing new directors were declared invalid for want of proper notice and quorum.
Deposit of the awarded sum for grant of stay includes accrued interest
State of West Bengal v. BBM Enterprise
Calcutta High Court | AP No. 808 of 2022
The Calcutta High Court has reaIirmed its jurisdiction to modify conditions for grant of stay on an arbitral award. Significantly, it clarified that the deposit required for securing a stay must cover both principal and accrued interest, as a stay does not halt the accrual of interest. By retaining the power to revisit stay conditions, the Court ensures that awardholders are not disadvantaged by delays in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996. Crucially, it recognises the necessity of depositing the entire awarded amount, noting that business common sense does not permit postponement of the fruits of an award to an uncertain future date. This pragmatic approach bolsters confidence in arbitration and safeguards the financial interests of award-holders.
SUMMARY OF FACTS
Disputes under a works contract between BBM Enterprise and the State of West Bengal were referred to arbitration.
An award of approximately INR 12.5 crore was passed in favour of BBM Enterprise, which was subsequently challenged by the State of West Bengal.
Pending the challenge, the Calcutta High Court temporarily stayed the enforcement of the award on the condition that the State deposit INR 9 crore.
The State deposited the amount, which was permitted to be withdrawn by BBM Enterprise against the furnishment of bank guarantees.
As the challenge remained pending, BBM Enterprise sought deposit of the balance amount of approximately INR 3.5 crore, along with accrued interest.
DECISION OF THE COURT
The High Court modified its stay order, directing the State to deposit the balance undeposited award sum along with accrued interest (INR 5.32 crore), permitting BBM Enterprise to withdraw it upon furnishing an unconditional bank guarantee.
The deposit of the awarded sum/decreed amount encompasses both principal and accrued interest, as the stay did not halt the accrual of interest.
Additionally, emphasising the need to deposit the entire awarded sum, the Court observed that business common sense does not permit postponement of the award's benefits to an uncertain future date. In a commercial context, a part-deposit for stay undermines equal treatment of parties.
The Court retains jurisdiction to revisit and modify stay conditions to balance equities, and does not become functus officio upon disposal of the stay application
Footnotes
1. Govind Rubber Ltd v. Louis Dreyfus Commodities Asia Pvt Ltd, (2015) 13 SCC 477; and Caravel Shipping Services Pvt Ltd v. Premier Sea Foods Exim Pvt Ltd, (2019) 11 SCC 461
2. 17th Edition, Sweet & Maxwell, London, 1964
3. IFB Agro Industries Ltd v. SICGIL India Ltd, (2023) 4 SCC 209
Dispute Resolution & ADR Newsletter - September 2025
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