In Brief
A developer and property owner disputed whether their contract's Clause 18 was a valid arbitration agreement. The clause required disputes to be referred to arbitration under the Arbitration and Conciliation Act, 1996, but omitted the words "final and binding". The High Court rejected it for lacking essential ingredients. The Supreme Court reversed this decision, holding that an arbitration agreement's validity depends on the parties' evident intention to arbitrate, not on technical language. Clause 18 clearly mandated arbitration with specified procedures and governing law, demonstrating binding intention. Courts must adopt a pragmatic, substance-focused approach to arbitration clauses rather than a pedantic one. The Court appointed a sole arbitrator to resolve the disputes.
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