Arbitration In IndiaMere use of expression “Arbitration” not a binding Agreement

Roshan Agarwal v. National Projects Construction Corporation Limited (NPCCL) & Anr.

Court – Calcutta High Court

Citation – AP-COM/218/2025

Date – 04.08.2025

The Hon’ble Calcutta High Court has held that the mere use of the expression “Arbitration” in a clause is not sufficient to make the Agreement binding and the intent of the parties has to be seen.

The Court held,

“28. An arbitration agreement has to be couched not in precatory, but obligatory words. Although, there is no particular form or universally practiced format in framing an arbitration agreement, but the words used must be certain, definite and indicative of the determination of the parties to go for arbitration and not a choice or a mere possibility to refer such dispute to arbitration. In Jagdish Chander vs. Ramesh Chander reported in (2007) 5 SCC 719, the question before the Apex Court was whether Clause 16 of the deed of partnership was an arbitration agreement within the meaning of Section 7 of the Arbitration and Conciliation Act 1996 or not.

30. Thus, by applying the ratio of Jagdish Chander (supra), this Court is constrained to hold that mere use of the expression “Arbitration” in Clause 76.0, will not automatically make the clause a binding arbitration agreement as comtemplated under Section 7 of the Arbitration Conciliation Act, 1996.”

The Court relied upon following precedents to come to a conclusion:

a. Jagdish Chander vs. Ramesh Chander (2007) 5 SCC 719

b. Powertech World Wide Limited vs Delvin International General Trading LLC (2012) 1 SCC 361

c. Mahanagar Telephone Nigam Limited vs. Canara Bank and ors. (2020) 12 SCC 767

d. Jyoti Bros. vs. Shree Durga Mining Co. AIR 1956 Cal 280

e. Karma Norbu Bhutia vs National Projects Construction Corporation Ltd. (NPCCL) & Anr. APCOM/1081/2024.

-Team AMLEGALS

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