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TMI Blog2022 (9) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Court of 6th Joint Civil Judge, Senior Division, Nagpur (hereinafter referred to as the "trial Court"). Exh.24 was an application filed by the respondents (original defendants) under Section 8 of the Arbitration and Conciliation Act, 1996 (Act of 1996), for referring the matter to arbitration by contending that there was an arbitration agreement between the parties. As a consequence of the said application being allowed, order was passed on Exh.1 on the same date, whereby it was observed that in view of the application at Exh.24 being allowed, the suit itself stood disposed of, with the parties to go for arbitration in terms of the arbitration agreement. (3) It appears that aggrieved by the said orders, passed by the trial Court, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel appearing for the petitioners submitted that a perusal of the documents on record would show that there was no arbitration clause in the concluded contract between the parties. It was submitted that even if there was an arbitration clause in the proposal forwarded by the petitioners on 26/06/2012, when the petitioners communicated their response to the same, by the document dated 12/07/2012, styled as a letter of intent, the proposal was only referred to and the aforesaid document specifically laid down the manner in which the respondents would execute the project for which they were being engaged by the petitioners. It was submitted that this was the only document signed on behalf of both the parties and admittedly the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d exist between the parties. It was submitted that the appellate Court was justified in dismissing the appeal as untenable and that therefore, the writ petition itself deserved to be dismissed . (8) Heard learned counsel for the rival parties and perused the material on record. In order to exercise power under Section 8 of the Act of 1996, there has to be an arbitration agreement between the parties. Such an agreement can certainly be a clause in a document executed between the parties. In any case, existence of such a clause or agreement is a sine qua non for the Court to exercise power under Section 8 of the Act of 1996. Therefore, it needs to be examined whether the documents on record, upon which the parties have placed reliance, demon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e representatives of both the parties. (11) Thereafter, on 16/07/2012, the petitioners issued the purchase order, again referring to the letter dated 26/06/2012, whereby the respondents had forwarded their proposal, as also to subsequent discussions and the letter of intent dated 12/07/2012. This is a document signed only on behalf of the petitioners and in this document, the specifications regarding the prefabricated steel building stated in the letter of intent were reiterated and terms and conditions were again specified which contained various clauses, including a clause concerning force majeure, but significantly it did not contain any clause specifying an arbitration agreement between the parties. (12) The trial Court accepted the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of intent dated 12/07/2012 and the purchase order dated 16/07/2012, it cannot be said that an arbitration agreement came into existence between the parties. The only document i.e. the letter of intent dated 12/07/2012, signed by both the parties, merely referred to the proposal and specifically and independently recorded terms and conditions for the execution of the project by the respondents, which did not contain an arbitration clause/agreement. Mere reference to the proposal, without incorporation of the arbitration clause/agreement in the letter of intent dated 12/07/2012 and the purchase order dated 16/07/2012, would not amount to an arbitration agreement coming into existence. The trial Court failed to appreciate this aspect of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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