The Arbitration and Conciliation Act (1996 Act) contains the following relevant provisions:

A sales contract for the purchase of natural rubber was entered into between Louis Dreyfus Commodities Ltd (petitioner) and Govind Rubber Ltd (respondent). The respondent issued a purchase order and, on receiving this confirmation, the respondent issued a sales contract. When the respondent requested a change to the payment terms, the petitioner issued a second sales contract and the cargo was shipped. Both contracts provided that the governing terms of those contracts were the "Singapore Commodity Exchange".

Both sales contracts also provided that the petitioner had confirmed having sold to the respondent the goods described therein, on the terms and conditions recorded in those contracts. All correspondence between the parties referred to the sales contracts. Neither of the sales contracts was countersigned by the petitioner.

After shipment of cargo, the respondent requested a reduced rate, which was refused by the petitioner. This dispute was referred to the Singapore Commodity Exchange, in accordance with the terms of the sales contracts. The tribunal rejected the respondent's argument that only the Indian courts had jurisdiction over the matter. It made an award, directing the respondent to pay to the petitioner an amount for breach of contract. The respondent did not take any steps to set aside the award. However, it filed a suit against the petitioner claiming damages and that claim is pending before the Indian courts. The. petitioner sought enforcement and execution of the award as a decree.

The Bombay High Court held that, in accordance with sections 7(4) and 7(5) of the 1996 Act, there was an arbitration agreement between the parties incorporated by reference to the Singapore Commodity Exchange. Although the arbitration clause in the sales contract was not signed by both parties, it was acted upon by them, indicating that the sales contract was a concluded contract between the parties. Thus, the petitioner had rightly invoked the arbitration clause.

The court further went on to hold that the respondent could not raise the issue of jurisdiction at this post-award stage, when it had not applied to set aside the award for lack of jurisdiction. As regards the suit for damages, the court held that the suit filed by the respondent after the arbitral tribunal had made its award is of no consequence.

The court held that the dispute between the parties was an international commercial arbitration, as defined by section 2(1)(f) of the 1996 Act. The court held that the award delivered by the arbitral tribunal was a foreign award, within the definition of section 44 of the 1996 Act. A certified true copy of the award was sufficient evidence to hold that the award was a foreign award, in compliance with section 47 of the 1996 Act.

This judgment contributes positively to the existing jurisprudence on the Indian arbitration regime. The court's finding that, based on the parties' conduct, there was an arbitration agreement, has reduced the scope for those who try to renounce their obligations.