Arbitration In IndiaEmail or WhatsApp can constitute valid Arbitration Agreement

INTRODUCTION

The Hon’ble Delhi High Court has recently held in Belvedere Resources DMCC v. OCL Iron and Steel Ltd. & Ors. (O.M.P.(I) (COMM.) 397/2024, CRL.M.A. 9760/2025, I.A. 2377- 78/2025) that WhatsApp or email communications between the parties can constitute a valid arbitration agreement. This highlights a critical and developing theme of arbitration law in India: the acknowledgment of arbitration agreements reached through informal and online communication.

At the core of this ruling is the Court’s construction of Section 7(4)(b) of the Arbitration and Conciliation Act, 1996, relating to form and validity of arbitration agreements. In confirming an arbitration clause which appears in a sequence of WhatsApp and email correspondence, the Court has made one thing very plain – insistence on a signed document is no longer the sine qua non for evidencing intent to arbitrate.

In the context of modern trade, where agreements are frequently discussed and finalised through informal digital media, this ruling is very significant. The decision upholds the limits of jurisdictional competence under Section 9 petitions and clarifies the amount of proof required to create an arbitration agreement under Indian law.

FACTUAL BACKGROUND

The dispute arises out of a commercial transaction that started in late September 2022 between Belvedere Resources DMCC (“Belvedere”), a UAE-based firm, and SM Niryat Pvt. Ltd., which has since merged into OCL Iron and Steel Ltd (“OCL”). The two had negotiated by WhatsApp and email. A draft agreement outlining important conditions, including product specifications, quantity, price, terms of payment, and an arbitration clause that refers disputes to the Singapore International Arbitration Centre (SIAC), had been circulated by Belvedere by the beginning of October 2022.

Despite Belvedere’s repeated follow-ups and ongoing correspondence, SM Niryat failed to make the legally required advance payment. Later, on November 15, 2022, SM Niryat abruptly ended the deal without providing sufficient justification. Interpreting this as a contract termination, Belvedere commenced arbitration proceedings under the SIAC Rules in June 2024 and also made a petition under Section 9 of the Arbitration and Conciliation Act, 1996 before the Hon’ble Delhi High Court. The petition prayed for interim relief in the form of a direction to OCL and its subsidiaries to obtain the sum of $2.77 million (approximately ₹23.34 crore), which was the damages apparently incurred as a result of breach of contract.

CONTENTIONS OF THE PARTIES

Belvedere argued that a binding arbitration agreement existed between the parties that was created by way of a recorded exchange of WhatsApp messages and emails. It relied on Section 7(4)(b) of the Arbitration and Conciliation Act, 1996 which states that an arbitration agreement shall be in writing if it is in the form of an exchange of letters, telex, telegrams or other means of telecommunication, including electronic ones, which record the agreement.

Belvedere contended that the WhatsApp and email exchanges clearly evidenced the parties’ consensus on all substantial terms, including arbitration, and the lack of an executed agreement did not invalidate the enforceability of the arbitration clause.

The losses Belvedere was claiming were significant, measurable, and backed up by unambiguous documentary evidence, Belvedere further contended, establishing a prima facie case for interim relief under Section 9, that there was a genuine risk of OCL parting ways with its assets in the absence of interim protection, which may make any final arbitral ruling worthless.

OCL, on the other hand, argued that there was no arbitration agreement in existence. Its primary contention was that the communications relied upon by Belvedere were preliminary and did not indicate a concluded contract, much less a mutual agreement to arbitrate. It contended that the arbitration clause was not found in a signed and executed document, and hence did not meet the statutory test of being “in writing” under Section 7.

It also argued that the fact of having a branch office in Delhi was not enough to impart jurisdiction on the Courts in Delhi where the transaction had no connection to the place. They relied on precedents to argue that Section 9 petitions need to be brought in a court of competent subject matter jurisdiction and the arbitration and territorial jurisdiction needs to be determined separate from corporate presence.

Furthermore, OCL argued that no case had been established for protective interim relief because the damages sought were hypothetical and unliquidated. They maintained that the Court should use caution when utilising its authority under Section 9 and that providing such relief would amount to prejudging the case’s merits, particularly in cases without a signed arbitration agreement.

DECISION OF THE COURT

The Hon’ble Court upheld that, “an effective arbitration agreement did indeed exist between the parties, without even a signed contract.” Citing Section 7(4)(b) of the Act, the Hon’ble Court reaffirmed that Indian law of arbitration authorizes an arbitration agreement to be included in a letter or a communication exchanged between the parties setting out of the agreement to arbitrate regardless of the mode or form of such communication. It ruled that the WhatsApp messages and email communication between the parties unequivocally demonstrated mutual assent to the key terms of the contract, including the arbitration term to refer disputes to SIAC.

The Hon’ble Court construed Section 7 in a broad sense, noting that the Act departed from formalistic principles of contract law towards a pragmatic approach that is compatible with contemporary means of communication. It observed that “Section 7(4)(b) abandons the traditional understanding of an agreement as a signed document. The process of agreeing must be implied from documents and communication relevant to the matter, neither of which is equivalent to a traditional contract.” Accordingly, the Hon’ble Court declared that the lack of a signed agreement could not exclude the making of a binding arbitration agreement.

However, despite affirming the existence of an arbitration agreement, the Honourable Court declined to consider the case due to a lack of jurisdiction. It stated that OCL’s office in Kolkata had negotiated, carried out, and repudiated the transaction. For jurisdictional considerations, it was decided that the existence of a branch office in Delhi that had no involvement in the transaction was irrelevant. Belvedere’s argument that jurisdiction may be predicated on the location of OCL’s assets in Delhi was also rejected by the Hon’ble Court, which held that such considerations might be pertinent during execution proceedings rather than during the Section 9 pre-award phase.

Consequently, the Hon’ble Court rejected the petition, holding that Delhi was not a proper forum for seeking interim relief.

AMLEGALS REMARKS

The case represents an important milestone in Indian arbitration jurisprudence, especially regarding the enforcement of arbitration agreements made over contemporary communication platforms. The Hon’ble Delhi High Court’s reading of Section 7(4)(b) is a purposive and technology-conducive reading of the Arbitration and Conciliation Act, as required by worldwide best practices and pro-arbitration norms.

By confirming that electronic communications like WhatsApp and emails can prove a valid arbitration agreement, the Hon’ble Court has validated the fact of modern commercial dealings where formal signatures are avoided but the terms of the contract are well understood and complied with.

The ruling also demonstrates the fine balance that courts must maintain in order to grant pre-award interim relief under Section 9. Even while the Honourable Court understood the petitioner’s concerns, it was right to insist on rigorous adherence to the text and spirit of the law. This balance is demonstrated by the refusal of relief based on jurisdiction, even when acknowledging the arbitration agreement’s effectiveness.

This ruling is a strong validation of electronic contracts and a refresher that enforceability in law now depends more on content than form. It will be authoritative guidance for subsequent cases where arbitration agreements are entered into electronically.

– Team AMLEGALS assisted by Mr. Abhijeet Patra (Intern).

For any queries or feedback, feel free to reach out to rohit.lalwani@amlegals.com