Arbitration Agreement Valid Between Parties If It’s Contained In Exchange Of Email & WhatsApp: Delhi High Court
The Delhi Excessive Court docket held that the arbitration settlement is legitimate between the events whether it is contained in trade of e mail and WhatsApp.
The Court docket held thus in a Petition filed beneath Part 9 of the Arbitration and Conciliation Act, 1996 (A&C Act).
A Single Bench of Justice Jasmeet Singh noticed, “The above correspondence leaves no room for doubt that the arbitration settlement was contained within the trade of e mail and WhatsApp communications between the events, and therefore, there’s an existence of a sound arbitration settlement between the events. Therefore, concern no.1 as enumerated in paragraph 48 is determined in favor of the petitioner.”
The Bench stated that mere existence of a department workplace which, prima facie, had nothing to do with the transaction in query won’t give Delhi, jurisdiction to entertain the Petition.
Advocate Gauhar Mirza represented the Petitioner whereas Senior Advocate Krishnaraj Thaker represented the Respondents.
Information of the Case
The Petitioner was an organization included in UAE, offering high quality and bespoke providers together with promoting of coal. OCL Iron and Metal Ltd., the Respondent was engaged in manufacturing of coal based mostly direct diminished iron in addition to making of metal. Oriental Iron Casting Restricted (OICL), a completely owned subsidiary of the Respondent was engaged in manufacture of metal. Aron Auto Restricted was additionally a completely owned subsidiary of the Respondent, engaged in manufacturing of components and equipment for motorcar and their engines. In 2022, a consultant of an organization requested the Petitioner’s consultant to make a proposal on the market of cargo of coal for November by means of WhatsApp communication. In response, the Petitioner conveyed the costs and portions. Additional, discussions passed off through WhatsApp after which the Petitioner formally supplied to promote between 75,000MT to 150,000MT (+/-10%) of coal on a CFR foundation two ports (Paradip and Sagar) at a value of USD 155.50 PMT or foundation one port (Sandheads) at a value of USD 150 PMT dated (hereinafter known as Provide), which was accepted.
To formalize the deal, the Petitioner circulated a globally accepted Commonplace Coal Buying and selling Settlement. From November 3, 2022 to November 14, 2022, the Petitioner despatched a number of reminders to SMN through WhatsApp and e mail requesting the signed contract and settlement prematurely cost. Lastly, the corporate responded to the identical, asking to alter or swap the month of supply. Expressing its disappointment, the Petitioner invoked arbitration, looking for damages for wrongful termination of contract. The Petitioner was made conscious of the NCLT, Kolkata Bench’s Order sanctioning the amalgamation of the corporate with the Respondent.
Reasoning
The Excessive Court docket after listening to the contentions of the counsel, famous, “Within the details and circumstances of the current case, SCoTA was despatched vide e mail dated 02 November 2022 by the petitioner to R1. The respondent No.1 duly responded to the stated e mail on 03 November 2022 and in furtherance thereof, requested for its up to date ETA/ETB each day. Moreover, R1 through WhatsApp on 03 November 2022 knowledgeable the petitioner that the SCoTA can be signed and despatched instantly.”
The Court docket reiterated that unliquidated damages don’t give rise to debt except the legal responsibility is adjudicated upon by a reliable Court docket or an adjudicating authority and the damages have been assessed.
“When there’s a breach of contract, the aggrieved celebration, doesn’t ipso facto change into entitled to debt due from the opposite celebration. The one proper it has is the fitting to sue for damages. The aggrieved celebration will not be entitled to compensation/damages on account of an current obligation on a part of the celebration who dedicated the breach. Pecuniary legal responsibility solely arises after the Court docket has decided that the aggrieved celebration is entitled to damages”, it added.
The Court docket stated that the declare for damages will not be within the nature of a debt until it’s adjudicated upon by a Court docket or an adjudicating authority and there exists no obligation to an quantity when damages are claimed for breach of contract except the competent courtroom adjudicates upon the declare and holds that there was a breach of contract dedicated by the Defendant and is thereby liable to compensate the aggrieved celebration for the loss following which the quantum of such legal responsibility is assessed.
“A breach of contract entitles the aggrieved celebration a proper to sue for damages however doesn’t create a proper to assert “debt”. After the competent courtroom holds an enquiry, as as to whether the defendant has dedicated breach of the contract and has subsequently incurred a legal responsibility in direction of the aggrieved celebration does a declare for damages flip into “debt due”. Damages are payable solely by a decree of the Court docket and never on the account of quantification by the aggrieved celebration”, it additional remarked.
The Court docket noticed that to be able to efficiently set up a case, the Petitioner is required to indicate that the Defendant with an intent to impede or delay the execution of a decree that could be handed in opposition to him is about to get rid of entire or a part of his property or is about to take away any half or entire of his property from the native limits of the jurisdiction of the Court docket.
“It’s settled legislation that an order beneath Part 9 the Arbitration and Conciliation Act, 1996 as sought by the petitioner, can’t be handed except the situations as supplied beneath Order XXXVIII Rule 5 are glad”, it additionally famous.
Conclusion
Furthermore, the Court docket stated that the Petitioner has a declare, however that declare is but to be established, the quantity is but to be quantified, monetary well being of the Respondent being dangerous is but to be established and the truth that Respondent is malafidely disposing of its belongings can also be but to be established.
“The orders of attachment impacts the monetary well being of the corporate and are to not be handed merely as a routine. Within the current case, there’s nothing to indicate as to the intent of R1 to impede or delay the execution of a decree that could be handed in opposition to it. … The truth that R1 was beneath CIRP and R1 has loans secured by mortgaging its properties will not be adequate to go an order beneath Order XXXVIII Rule 5. R1 is a business firm and its operations require taking loans, mortgaging belongings and to my thoughts the identical can’t be adequate to impact attachment”, it concluded.
Accordingly, the Excessive Court docket dismissed the Petition.
Trigger Title- Belvedere Assets DMCC v. OCL Iron and Metal Ltd. & Ors. (Impartial Quotation: 2025:DHC:5128)
Look:
Petitioner: Advocates Gauhar Mirza and Shivi Chola.
Respondents: Senior Advocate Krishnaraj Thaker, Advocates Anand Sukumar, S. Sukumaran, Bhupesh Kumar, and Ruche Anand.
