Arbitration In IndiaDelhi High Court Endorses Digital Communication: WhatsApp and Email Validated for Arbitration Notices

The Hon’ble Delhi High Court in the case of M/S Lease Plan India Private Limited v. M/S Rudraksh Pharma Distributor & Ors, ARB.P. 1273/2023 decided on 10.04.2024 held that service notice of arbitration on WhatsApp number and email address is a valid delivery.

FACTS OF THE CASE

The dispute arises out of a “Lease Agreement” dated 21.03.2018, where M/s Rudraksh Pharma Distributor (herein referred to as ‘Respondent’), a partnership firm, leased vehicles from M/s Lease Plan India Private Limited (herein referred to as ‘the Petitioner’).

The agreement contains an arbitration clause (Clause 10.2) providing for arbitration of disputes at the Delhi International Arbitration Centre (hereinafter referred to as “DIAC”), New Delhi, and designates New Delhi courts with exclusive jurisdiction.

The Petitioner claims that disputes arose between the parties and it invoked arbitration through a legal notice dated 31 December 2022, proposing three names for arbitrators. However, the Respondent No. 1 did not respond to this notice.

Arbitration Notice was issued on 04.12.2023. Service was initially attempted by registered post and Speed Post but was not effective. Service by email and WhatsApp was successfully completed on 20.02.2024.

ISSUES BEFORE THE HON’BLE DELHI HC

• Whether there exists a valid arbitration agreement between the parties.
• Whether the notice invoking arbitration was effectively served on the Respondent.
• Whether the petition for the appointment of an arbitrator should be allowed given the effective service of notice and the existence of an arbitration agreement.

CONTENTIONS OF THE PARTIES

Petitioner:

The Petitioner contented that a valid arbitration agreement existed under Clause 10.2 of the “Lease Agreement” dated 21.03.2018. This clause specifically provided for the resolution of disputes through arbitration at the DIAC. The clause specifically stated the exclusive jurisdiction of courts in New Delhi, further emphasizing the enforceability of the arbitration agreement between the parties.

The Petitioner claimed that it had properly invoked the arbitration process by issuing a legal notice dated 31.12.2022 to Respondents. In this notice, the Petitioner proposed three names of potential arbitrators and requested the Respondent to agree on one of the names for appointment as the arbitrator. However, no response was received from the Respondent, effectively creating a situation where the Petitioner was forced to approach the Court under Section 11 of the Arbitration and Conciliation Act, 1996, for the appointment of an arbitrator.

The Petitioner submitted that service of notice invoking arbitration had been effectively made via multiple modes of communication. While Speed Post and registered post failed due to non-availability of the Respondent at the given address, service through email and WhatsApp was completed successfully. The email addresses and mobile numbers used were specified in the Agreement itself, which substantiated the adequacy and legality of the service.

The Petitioner argued that the Respondent had chosen not to respond to the notices or appear before the Court, despite being properly served. The failure of the Respondent to engage in the arbitration process or the court proceedings should not delay the process of appointing an arbitrator and resolving the disputes

 Respondent:  

The Respondent did not appear or present any contentions in the Court proceedings. As a result, there were no opposing arguments or challenges to the Petitioner’s claims regarding the existence of an arbitration agreement or the service of notices. Given the absence of any objections, the Court primarily relied on the Petitioner’s submissions and the evidence of service provided.

DECISION AND FINDINGS OF THE COURT

The Hon’ble Delhi High Court confirmed the existence of a valid arbitration agreement between the parties under Clause 10.2 of the Lease Agreement.

The Court accepted that service of notice via email and WhatsApp was effective, despite the unsuccessful attempts via registered and Speed Post. The Petition was allowed, and the disputes between the parties were referred to arbitration under the DIAC. DIAC was directed to appoint an arbitrator from its panel, and the arbitration proceedings were to be governed by DIAC rules, including the arbitrator’s remuneration.

The Court clarified that all rights and contentions of the parties regarding the maintainability of claims and the merits of the dispute were reserved for adjudication by the arbitrator. The petition was disposed of in accordance with the above directions.

AMLEGALS REMARKS

This judgment by the Hon’ble Delhi High Court in this case represents a significant step forward in recognizing modern communication methods as valid means of delivering arbitration notices. By affirming the effectiveness of service via WhatsApp and email, the Court not only aligns with contemporary practices but also reinforces the integrity of the arbitration process.

The decision underscores the importance of ensuring that arbitration agreements are honoured and that parties remain accountable, even in the face of non-responsiveness. This case exemplifies the balance between upholding legal protocols and adapting to the evolving landscape of communication, thereby enhancing the efficacy of alternative dispute resolution. Overall, the Court’s ruling promotes a more accessible and efficient framework for resolving disputes, which is beneficial for all stakeholders involved.

-Team AMLEGALS, assisted by Mr. Akshat Sood

For any query or feedback, please feel free to get in touch with rohit.lalwani@amlegals.com or himanshi.patwa@amlegals.com