ELP Arbitration Weekly Update

We had earlier examined the Supreme Court’s decision in Inox Wind Ltd. v. Thermocables Ltd. (‘Inox Wind’). The SC had laid down that a general reference in a contract to a standard form of contract of one party would be sufficient for incorporation in the contract of arbitration clause contained in such standard form of contract. (For your ease of reference, we have attached our previously shared analysis of Inox Wind.)

This week, we examine the Supreme Court’s decision in M/s Elite Engineering and Construction (Hyd.) Pvt. Ltd. v. M/s Techtrans Construction India Pvt. Ltd. In the present case while recognising that the agreement between the parties had incorporated (by reference) some terms of another agreement, the SC held that such terms incorporated by reference related only to terms of works and did not reflect an intention of parties to incorporate the arbitration agreement from the other agreement. Thus, the SC refused to read an arbitration clause from another agreement as a part of the agreement between the parties. While discussing the law on incorporation of arbitration clause by reference, the SC also analyzed its earlier decision in the case of M.R. Engineers and Contractors Private Limited v. Som Datt Builders Limited, (2009) 7 SCC 696.

We trust you will find this an interesting read. For any queries or comments on this update, please feel free to contact us at drupdate@elp-in.com.

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