Summary
The Court held that the arbitration clause in Coal India’s 2007 e-auction scheme was incorporated into individual sale orders through their governing-terms reference. These were transactions under a standard scheme, for which general words of incorporation sufficed. The clause’s broad language covered the disputed sale transactions. The Court set aside refusal of appointment and appointed a sole arbitrator by the parties’ consent, subject to statutory disclosure.
Issues
- Whether the scheme’s arbitration clause was incorporated into individual sale orders by reference.
- Whether the clause covered the disputed sale transactions.
Provisions considered
- Section 7(5), Arbitration and Conciliation Act, 1996Applied incorporation by reference to a standard scheme governing the sale orders. (¶¶ 4.1, 4.2, 4.3, 4.9, 4.10, 5)
- Section 11(6) and Sixth Schedule, Arbitration and Conciliation Act, 1996Allowed appointment of the agreed sole arbitrator subject to the prescribed disclosure and declaration. (¶¶ 1, 2.6, 2.7, 6)
Held
- An arbitration agreement may be incorporated from another document if the written contract’s reference makes it part of the bargain. General reference to applicable standard terms can suffice, distinct from mere reference to a separate contract involving other parties. (¶¶ 4.1, 4.2, 4.3, 4.9, 4.10)
- The sale orders arose under the 2007 scheme and expressly adopted Coal India and the subsidiary’s governing guidelines, circulars, orders, notices and instructions. This standard-document setting incorporated the scheme’s arbitration clause into the sale orders. (¶¶ 3.1, 5)
- The clause covered all disputes arising out of or in relation to the scheme. Its expansive language included the present sale transactions. (¶ 5.1)
- The High Court’s refusal was set aside. By consent, retired Justice Pranab Kumar Chattopadhyay was appointed sole arbitrator, subject to the Sixth Schedule disclosure and declaration, with proceedings in Kolkata. (¶¶ 5.2, 6)
Result
Appeal allowed; High Court order set aside and agreed sole arbitrator appointed to hear the scheme-related disputes in Kolkata, subject to statutory disclosure.