WhatsApp, email exchanges constitute valid arbitration agreement: Delhi High Court

The Delhi High Court has held that an arbitration agreement can be validly constituted through WhatsApp and email communications, even in the absence of a formally signed contract..Interpreting Section 7(4)(b) of the Arbitration and Conciliation Act, 1996, Justice Jasmeet Singh ruled that a valid arbitration agreement existed between Belvedere Resources DMCC and SM Niryat (now merged with OCL Iron and Steel Ltd)."The arbitration agreement was contained in the exchange of email and WhatsApp communications between the parties, and hence, there is an existence of a valid arbitration agreement,” the order stated..The case arose from a transaction initiated in late September 2022. The parties negotiated over WhatsApp and email, and by October 2022, Belvedere had shared the terms of the agreement.However, despite repeated requests, SM Niryat failed to remit the advance payment and on November 15, 2022, abruptly cancelled the deal. Belvedere subsequently invoked arbitration before the Singapore International Arbitration Centre (SIAC) in June 2024 and filed a Section 9 petition seeking a direction to OCL and its subsidiaries to secure the claimed amount of $2.77 million (approx. ₹23.34 crore).The respondents argued that no valid arbitration agreement existed and denied the Court's jurisdiction. They also contended that the damages were unliquidated and that no case had been made out for securing the amount under Section 9..The Court emphasised that Section 7(4)(b) does not require a signed agreement so long as the arbitration clause is evidenced through written communications that record the parties’ consent.It reiterated that the test under Section 7(4)(b) focuses on whether the consent to arbitrate is apparent from the documentary record, not whether the arbitration clause was contained in a traditionally executed contract.“Section 7(4)(b) dispenses with the conventional sense of an agreement as a document with signatories… The act of agreeing has to be inferred from relevant documents and communication, neither of which can be equated with a conventional contract.".The Court, while affirming the existence of an arbitration agreement, dismissed the petition on the ground that it lacked territorial jurisdiction. It found that the entire transaction was negotiated and repudiated through OCL’s Kolkata office, and that the mere presence of a Delhi branch address was insufficient to confer jurisdiction.“Mere existence of a branch office which, prima facie, had nothing to do with the transaction in question will not give Delhi jurisdiction to entertain the present petition.”The Court also declined to accept Belvedere’s argument that the holding of shares in a listed company with an office in Delhi was sufficient to establish jurisdiction, stating that asset location may be relevant in execution proceedings but not in pre-award interim relief..Belvedere Resources DMCC was represented by Advocates Gauhar Mirza and Shivi Chola..SM Niryat/OCL Iron and Steel was represented by Senior Advocate Krishnaraj Thaker and Advocates Anand Sukumar, S Sukumaran, Bhupesh Kumar and Ruche Anand..[Read Judgment]