NO VALID ARBITRATION IF CLAUSE IN UNSIGNED AGREEMENT: Delhi High Court

• Reaffirms the criteria to deem a foreign arbitral award valid under section 44 of the Arbitration and Conciliation Act, 1996 and the Convention on the Recognition and Enforcement of Awards, 1958.
• A contract containing an arbitration agreement must be signed by all parties to the contract, in order to make the arbitration agreement valid and binding upon the parties.

The Delhi High Court (“Court”) in the case of Virgoz Oils and Fats Pte. Ltd. (“Vigoz”) v National Agricultural Marketing Federation of India ¹(“NAFED”) has refused the enforcement of a foreign arbitral award after allowing an objection to its enforcement under Section 48 of the Arbitration and Conciliation Act, 1996 (“The Act”). The Court has referred to and relied upon the requirements set out under the Convention on the Recognition and Enforcement of Awards, 1958 (“The Convention”) and the Act, to examine the requirements of a valid arbitration agreement. Applying these guidelines, the Court has held that the arbitration agreement between the parties in the present matter, was a part of a written agreement which was not signed by NAFED. Thereby, rendering the arbitration agreement inoperable and invalid against NAFED.