{"id":320247,"date":"2024-04-18T10:00:57","date_gmt":"2024-04-18T04:30:57","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=320247"},"modified":"2024-04-23T11:59:20","modified_gmt":"2024-04-23T06:29:20","slug":"cal-hc-dismisses-application-arbitration-clause-not-incorporated-subcontrator-work-order-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/04\/18\/cal-hc-dismisses-application-arbitration-clause-not-incorporated-subcontrator-work-order-legal-news\/","title":{"rendered":"Calcutta High Court dismisses application due to non-existence of arbitration clause in subcontractor&#8217;s work order"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\"><span style=\"font-weight: bold;\">Calcutta High Court:<\/span> In an application filed by the defendant, CLE Private Limited, seeking the dismissal of the suit and the initiation of arbitration citing a forum selection clause and an arbitration provision, <span style=\"font-weight: bold;\">Krishna Rao, J.<\/span>, dismissed the defendant&#8217;s application, noting that the arbitration clause and forum selection clauses were not applicable to the plaintiff, Dascon Sourav Commercial Private Limited , and that a reference to the document in the contract should be such that shows the intention to incorporate the arbitration clause contained in the document into the contract.<\/p>\n<p style=\"font-weight: bold;\">Background:<\/p>\n<p style=\"margin-bottom: 3%;\">The plaintiff had filed a suit against the defendant, seeking various reliefs including a decree of a specific sum and injunctive relief. The disagreement stemmed from alleged breaches of contract and non-payment issues. In response, the defendant filed the present application seeking the dismissal of the suit and the initiation of arbitration based on clauses within the contractual agreement, including a forum selection clause designating Mumbai courts for jurisdiction and an arbitration provision mandating arbitration for dispute resolution.<\/p>\n<p style=\"font-weight: bold;\">Contention of the Parties:<\/p>\n<p style=\"margin-bottom: 3%;\">The plaintiff contested, stating that they were not a party to the original contract between the Damodar Valley Corporation and the defendant and that the arbitration clause was not incorporated into the work order involving the plaintiff. The plaintiff further contended that General Conditions of Contract (&#8216;GCC&#8217;) and Specific Conditions of Contract (&#8216;SCC&#8217;) entered between the Damodar Valley Corporation and CLE Private Limited is a separate and distinct contract from that of the work orders issued by the defendant to the plaintiff and thus, the GCC and SCC does not apply to the work order issued to the plaintiff.<\/p>\n<p style=\"margin-bottom: 3%;\">The defendant contended that that the dispute raised by the plaintiff in the suit had arisen out of the contract and as per the General Conditions of Contract (&#8216;GCC&#8217;), there is a forum selection clause and as per the said clause, exclusive jurisdiction vested with the Courts of Mumbai for all matters arising under the Contract.<\/p>\n<p style=\"margin-bottom: 3%;\">Analysis and Decision:<\/p>\n<p style=\"margin-bottom: 3%;\">Upon consideration of the contentions of the parties as well as the relevant provisions of the general conditions of contract (GCC) and special conditions of contract (SCC), the Court referred to Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544978\" target=\"_blank\" rel=\"noopener\">7(5)<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\" target=\"_blank\" rel=\"noopener\">Arbitration and Conciliation Act, 1996<\/a> (&#8216;Arbitration Act&#8217;), which requires a clear intention to incorporate an arbitration clause from another document into the contract.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court referred to judgment in <span style=\"font-style: italic;\">M.R. Engineers &amp; Contractors (P) Ltd.<\/span> v. <span style=\"font-style: italic;\">Som Datt Builders Ltd.<\/span>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/Xb9372q8\" target=\"_blank\" rel=\"noopener\">(2009) 7 SCC 696<\/a> when the parties enter into a contract, making a general reference to another contract, such general reference would not have the effect of incorporating the arbitration clause from the referred document into the contract between the parties. It has been held that the arbitration clause from another contract can be incorporated into the contract,where such reference is made, only by a specific reference to arbitration clause. It has further been held that where a contract between the parties provides that the execution or performance of that contract shall be in terms of another contract which contains the terms and conditions relating to performance and a provision for settlement of disputes by arbitration, then, the terms of the referred contract in regard to execution\/performance alone will apply, and not the arbitration agreement in the referred contract, unless there is special reference to the arbitration clause also.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court further referred to <span style=\"font-style: italic;\">Inox Wind Ltd.<\/span> v. <span style=\"font-style: italic;\">Thermocables Ltd.<\/span> <a href=\"http:\/\/www.scconline.com\/DocumentLink\/KNF4peDb\" target=\"_blank\" rel=\"noopener\">(2018) 2 SCC 519<\/a> wherein the Supreme Court held that while a general reference to an earlier contract might not suffice for incorporating an arbitration clause in a later contract, a general reference to a standard form would be adequate for such incorporation,<\/p>\n<p style=\"margin-bottom: 3%;\">The Court, while dismissing the present application thus held, the plaintiff herein acted as a subcontractor under the defendant and did not enter into any contracts directly with them, and hence, the arbitration clause was not incorporated into the work order issued by the defendant to the plaintiff.<\/p>\n<p style=\"margin-bottom: 3%;\">Consequently, the Court ruled that neither the arbitration clause nor the forum selection clauses were applicable to the plaintiff, and thus, the matter could not be referred to arbitration, further affirming the jurisdiction of the Calcutta High Court in adjudicating the matter.<\/p>\n<p style=\"margin-bottom: 3%;\">[<span style=\"font-weight: bold; color: #632423;\">Dascon Sourav Commercial Private Limited v. CLE Private Limited, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/6nA2d613\" target=\"_blank\" rel=\"noopener\">2024 SCC OnLine Cal 3590<\/a>, Order dated 10-04-2024<\/span>]<\/p>\n<hr\/>\n<p>Advocates who appeared in this case :<\/p>\n<p style=\"margin-left: 18pt;\"><span style=\"font-weight: bold;\">Advocate for Plaintiff:<\/span> Surya Prasad Chattopadhyay, Arjun Samant, Saptarshi Kumar Mal, Ankit Chatterjee<\/p>\n<p style=\"margin-left: 18pt;\"><span style=\"font-weight: bold;\">Advocates for Respondent:<\/span> Rohit Banerjee, Paritosh Sinha, Shrayashee Das, Rohan Kumar Thakur, Mr. Himanshu Bhawsinghka<\/p>\n<h3 style=\"color: #000080;\">Buy Arbitration and Conciliation Act, 1996 &nbsp; <a href=\"https:\/\/www.ebcwebstore.com\/product_info.php?products_id=382\" target=\"_blank\" rel=\"noopener\">HERE<\/a><\/h3>\n<p style=\"margin-bottom: 3%;\"><a href=\"https:\/\/www.ebcwebstore.com\/product_info.php?products_id=382\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/arbitration-and-conciliation-act-1996-191x300.png\" alt=\"arbitration and conciliation act, 1996\" width=\"191\" height=\"300\" class=\"aligncenter size-large wp-image-294803\" srcset=\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/arbitration-and-conciliation-act-1996-191x300.png 191w, https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/arbitration-and-conciliation-act-1996-38x60.png 38w, https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/arbitration-and-conciliation-act-1996.png 620w\" sizes=\"auto, (max-width: 191px) 100vw, 191px\" \/><\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">&#8216;A reference to the document in the contract should be such that shows the intention to incorporate the arbitration clause contained in the document into the contract&#8217;<\/p>\n","protected":false},"author":67011,"featured_media":314821,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[3226,43926,23324,2689,3174,67664,67663,59732,67665],"class_list":["post-320247","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-arbitration","tag-arbitration-act","tag-arbitration-clause","tag-Calcutta_High_Court","tag-contract","tag-intention-to-incorporate","tag-reference-to-arbitration","tag-section-75","tag-work-order"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Calcutta HC dismisses application as arbitration clause not incorporated in subcontractor&#039;s work order| SCC Times<\/title>\n<meta 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intent required for incorporating Arbitration Clause by reference under Section 7(5) of the Arbitration and Conciliation Act, 1996: Calcutta High Court","author":"Ritu","date":"August 16, 2023","format":false,"excerpt":"In the instant matter, the primary issue was the incorporation of arbitration clauses from the Master Facility Agreement and Settlement Agreement and the maintainability of a composite reference.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"calcutta high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1 1x, 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It is true that the policy decision in terms of the Circular is to make arbitration a mechanism for dispute resolution both in cases\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Calcutta High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Calcutta-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Calcutta-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Calcutta-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Calcutta-High-Court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":318200,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/03\/23\/reference-to-document-in-contract-show-intention-incorporate-arbitration-clause-supreme-court\/","url_meta":{"origin":320247,"position":2},"title":"Reference to a document in contract should show intention to incorporate arbitration clause: Supreme Court reiterates","author":"Ridhi","date":"March 23, 2024","format":false,"excerpt":"Supreme Court concluded that the instant matter was not one of \u2018incorporation\u2019 but a case of \u2018reference\u2019 and clarified that a general reference would not have the effect of incorporating arbitration clause.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"arbitration clause in contract","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/arbitration-clause-in-contract.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/arbitration-clause-in-contract.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/arbitration-clause-in-contract.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/arbitration-clause-in-contract.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":294752,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/06\/16\/calcutta-hc-application-section-11-arbitration-act-appointment-arbitrator-legal-research-news\/","url_meta":{"origin":320247,"position":3},"title":"\u201cOnly ex facie invalidity of an agreement can be a ground for refusal of reference\u201d; Calcutta High Court allows Section 11 application","author":"Ritu","date":"June 16, 2023","format":false,"excerpt":"Without questioning the validity and legality of the arbitration clause, the Calcutta High Court appointed an Arbitrator to decide the issues raised by both the parties.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"calcutta high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":296666,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/07\/13\/court-having-exclusive-jurisdiction-in-agreement-is-the-seat-of-arbitration-calcutta-hc\/","url_meta":{"origin":320247,"position":4},"title":"Calcutta High Court resolves \u2018Seat&#8217; versus \u2018Venue&#8217; enigma when agreement confers \u2018exclusive jurisdiction&#8217; upon a court other than venue","author":"Ritu","date":"July 13, 2023","format":false,"excerpt":"Calcutta High Court dismissed the present petition on the grounds of lack of jurisdiction.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"calcutta high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":318882,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/03\/30\/whether-arbitration-clause-from-primary-contract-gets-incorporated-into-subsequent-letter-of-intent-supreme-court\/","url_meta":{"origin":320247,"position":5},"title":"Whether an arbitration clause from a primary contract gets incorporated into a subsequent Letter of Intent? 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