Arbitration Clause From Another Contract Can Be Incorporated Into Contract Only By Specific Reference: Delhi High Court

The Delhi High Court ruled that an arbitration clause from another contract can only be incorporated into a contract by specific reference. The case involved a Master Services Agreement (MSA) and a Statement of Work (SOW) between the petitioner and respondent. The petitioner sought the appointment of an arbitrator under the Arbitration and Conciliation Act, 1996, based on the MSA, which contained an arbitration clause. The respondent argued that the SOW, which did not contain an arbitration clause, was the governing document. The court found that the SOW was an integral part of the MSA, thus incorporating the arbitration clause. The court emphasized that a general reference to another contract is insufficient to incorporate an arbitration clause; there must be a clear intention to do so. This decision reinforces the need for explicit references to arbitration clauses in contracts to avoid disputes over their applicability.