WHAT IS ARBITRATION CLAUSE
Arbitration Clause refers to the clause which allows the parties to refer their dispute to Arbitration under the seen or unforeseen circumstances of disputes among the parties to a contract. Further this clause provides an opportunity to settle the disputes at an economic and time saver manner as compared with that of Litigation.
WILL THE CLAUSE IMBIBED UNDER A PURCHASE ORDER BE BINDING?
In cases where there is a purchase order or sales invoice issued containing the Arbitration Clause in its’ terms and conditions that will be binding if and only if there is no other contract between the parties. Notwithstanding to, if there is already an agreement or contract which already contains an Arbitration clause, in such cases the Arbitration clause under the said contract will supersede the other clause contained in the Purchase Order.
WHY DOES THE CLAUSE IN CONTRACT SUPERSEED THE OTHER CONTAINED IN INVOICES?
There is a major reason behind the ideology of the judgement rendered by the Hon’ble High Court in the matter of Sanghvi Movers Ltd. versus Vivid Solaire Energy Pvt. Ltd. it was observed that the contract between the parties is a comprehensive document encompassing all terms of the transaction between the parties, while purchase order is for the limited purpose of supply of the goods with no specific details.
CONCLUSION
The contract between the parties consists of consensus ad idem to the terms and conditions contained therein which is comprehensive and encompassing all terms of the transaction and such agreement also contains an arbitration clause which is different from the arbitration clause provided in the purchase order which is for the limited purpose of supply of the produce with more specific details and thus, the clause contained in a contract supersedes the other clause contained in the purchase orders/invoices.
DUCTUS EDGE 