The Delhi High Court has ruled that arbitration agreements formed via WhatsApp and email communications are legally valid under Indian law, even in the absence of a formally signed contract. The decision was issued in a case between Belvedere Resources DMCC and SM Niryat (now merged with OCL Iron and Steel Ltd), where the parties had exchanged contractual terms over digital platforms.
Legal Background
The ruling, delivered by Justice Jasmeet Singh, interpreted Section 7(4)(b) of the Arbitration and Conciliation Act, 1996, which allows an arbitration agreement to be evidenced in writing, including electronic communication. The Court observed that the consent to arbitrate was clearly reflected in the documentary exchange between the parties.
The judgment stated, “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.”
Case Summary
The dispute originated from a transaction initiated in September 2022, with the parties negotiating terms through WhatsApp and email. By October 2022, Belvedere had shared agreement terms, but SM Niryat allegedly failed to remit an advance payment and cancelled the deal in November 2022. Belvedere later initiated arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and filed a Section 9 petition seeking interim relief.
The respondents challenged the existence of a valid arbitration agreement and disputed the jurisdiction of the Delhi High Court. However, the Court held that the exchange of emails and WhatsApp messages sufficiently evidenced the agreement to arbitrate.
Jurisdictional Finding
Despite affirming the validity of the arbitration clause, the Court dismissed Belvedere’s Section 9 petition on the grounds of lack of territorial jurisdiction. It held that the transaction was negotiated and repudiated through OCL’s Kolkata office and that the presence of a Delhi branch office was insufficient to confer jurisdiction. The Court also rejected Belvedere’s argument that OCL’s holding of shares in a listed company with a Delhi office established jurisdiction. It clarified that asset location may be relevant in execution proceedings but not for interim relief under Section 9.
Implications
This ruling reinforces the legal acceptability of modern communication tools in commercial arbitration. It also highlights the importance of jurisdictional compliance in arbitration-related litigation and could have wide-reaching implications for businesses relying on informal communication to formalize commercial terms.