India / 01 October 2008 / India, Supreme Court / M/S Unissi (India) Pvt Ltd v. Post Graduate Institute of Medical Education and Research / Civil Appeal No. 6039 of 2008
| Country | India |
| Court | India, Supreme Court |
| Date | 01 October 2008 |
| Parties | M/S Unissi (India) Pvt Ltd v. Post Graduate Institute of Medical Education and Research |
| Case number | Civil Appeal No. 6039 of 2008 |
| Applicable NYC Provisions | II | II(2) |
| Source |
http://www.judis.nic.in (website of the decisions of the Supreme Court as well as several High Courts) |
| Languages | English |
| Summary | M/S Unissi (India) Pvt Ltd (“Unissi”) made an offer to a tender floated by the Post Graduate Institute of Medical Education and Research (“PGI”) which PGI accepted, placing purchase orders with which Unissi complied by sending the appropriate equipment. PGI, after receiving the equipment and installing them, demanded the execution of an agreement containing an arbitration clause. Unissi signed the agreement and sent it to PGI, but PGI did not revert with its signature to Unissi. Further, no payment was made by the PGI for the equipment received, installed and used by it. Unissi argued that the matter should be referred to arbitration, alleging the existence of a duly executed contract with an arbitration clause. The PGI contended that no arbitration agreement had been entered into by the parties. It also informed Unissi that a Technical Committee of the PGI had not approved the purchase and installation of the equipment, with the result that the equipment was rejected. Unissi applied to the Additional District Court in Chandigarh to have an arbitrator appointed. The Additional District Court held that there was no agreement executed between the parties, rejecting Unissi’s motion to appoint an arbitrator. In the Additional District Court’s view, the conditions of Section 7 of the Arbitration and Conciliation Act 1996 (the “1996 Act”) (incorporating, in modified language, Articles II(1) and (2) NYC) had not been satisfied. Unissi appealed this decision to the Supreme Court. The Supreme Court allowed Unissi’s appeal, reversing the decision of the Additional District Court in Chandigarh and ordering that an arbitrator be appointed. According to the Supreme Court, Section 7 of the 1996 Act “is in pari materia” to Article II(2) NYC. Relying on a previous decision interpreting Article II(2) NYC, the Supreme Court considered that “agreement in writing” could mean: (i) a contract containing an arbitration clause; (ii) an arbitration agreement signed by the parties; (iii) an arbitration clause in a contract contained in an exchange of letters or telegrams; or, (iv) an arbitration agreement contained in an exchange of letters or telegrams. Turning to the facts of the case, the Supreme Court held that Unissi had sent the agreement containing the arbitration clause and had duly signed it; it was PGI who had not returned the agreement with its signature. Further, the Supreme Court noted that PGI had used the machines for about a year before it returned them to Unissi. In the Supreme Court’s view, the tender offer made by Unissi, which contained an arbitration clause, and the supply order placed thereafter by PGI meant that the parties had entered into an arbitration agreement. It was also important, in the Court’s view, that the tender of Unissi was accepted and that Unissi had acted upon it. According to the Court, PGI should not now be allowed to “wriggle out” of the arbitration agreement between the parties. |
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Attachment (1)
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