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Tax Invoices Refer to Arbitration Clause Will Not Create Mediation Agreement Between Parties: Bombay HC

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Khushi Gupta

Published on: April 13, 2022 at 21:06 IST

According to the Bench of Justice GS Kulkarni, a joint Statement cannot bring about a Mediation Agreement between the parties.

Case Title: Concrete Additives & Chemicals Pvt Ltd Vs. SN Engineering Services Pvt Ltd.

In the Case, the Respondent (SN Engineering Services Pvt Ltd) had issued the purchase Orders to the Applicants (Concrete Additive and Chemicals Pvt Ltd) but after a dispute arose between the parties the Applicant filed Application under Section11 of the Arbitration & Conciliation Act of 1996 (Act) in the Bombay High Court seeking the appointment of a Mediation Court to Adjudicate the dispute.

Before the Supreme Court, the Applicant company claimed that the Tax Invoices issued by it contained a Mediation Clause and since the Tax Invoices were accepted by the Respondents, Mediation between the parties had to be taken.

However, the Supreme Court disagreed with the Alleged Dispute and ruled that the Contract between the parties was born out of Purchase Order and did not have a Judgment Clause.

The Court further stated that the issuance of Tax Invoices is a one-sided act of the Applicant and there is no Agreement between the parties.

Accordingly, the Court ruled that there was no Arbitration between the Parties and dismissed the Plaintiff’s Application.