In Brief
BGM and M-RPL-JMCT (JV) challenged the High Court's rejection of their application for arbitrator appointment under the Arbitration and Conciliation Act, 1996. The dispute arose from a transportation/handling contract with Eastern Coalfields Limited. The key issue was whether Clause 13 of the General Terms and Conditions—which stated disputes "may be sought" through arbitration—constituted a binding arbitration agreement. The Supreme Court held that permissive language like "may be sought" indicates optionality, not a binding mutual obligation. An arbitration agreement requires clear consensus ad idem and a definite obligation to arbitrate, not merely a possibility. The Court affirmed that Referral Courts need only conduct prima facie examination of arbitration agreements, not mini-trials. Since Clause 13 lacked binding language, it was merely an enabling provision, not an arbitration agreement. The appeal was dismissed.
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