Arbitration as a mode of dispute resolution rests on party autonomy. The cornerstone is the arbitration agreement, which signifies the willingness of the parties to submit disputes to arbitration rather than litigation. Traditionally, such agreements are executed in writing and duly signed, leaving little room for controversy over their validity. However, modern commercial dealings—conducted through emails, digital confirmations, and informal exchanges—often complicate this neat picture.
The critical question arises: Can an arbitration agreement still be enforced if one party has not signed the contract, but has otherwise accepted and acted upon it?
The Supreme Court of India, in its August 2025 decision in Glencore International AG v. M/s Shree Ganesh Metals & Anr., decisively addressed this question. The Court clarified that signatures are not indispensable where parties’ conduct clearly demonstrates consent. This article examines the legal principles governing unsigned arbitration agreements, the facts and reasoning of the Glencore judgment, and its implications for Indian and international arbitration law.
Legal Framework: Arbitration Agreement under Indian Law
Definition under the Arbitration and Conciliation Act, 1996
Section 7 of the Arbitration and Conciliation Act, 1996 defines an arbitration agreement as an agreement by the parties to submit disputes to arbitration. It provides:
- Section 7(3): Arbitration agreement shall be in writing.
- Section 7(4): An arbitration agreement is in writing if it is contained in:
a document signed by the parties,
an exchange of letters, telex, telegrams, or other means of telecommunication providing a record of the agreement, or
an exchange of statements of claim and defence where one party asserts its existence and the other does not deny it.
The law thus explicitly recognises records of agreement beyond signed documents.
Foreign Awards: Sections 44 and 45
When foreign awards are involved, Part II of the Act governs. Section 44 requires the arbitration agreement to be “in writing,” and Section 45 mandates judicial authorities to refer parties to arbitration unless the agreement is “null and void, inoperative, or incapable of being performed.” Neither provision insists upon signatures.
This statutory design underscores a deliberate policy choice: written evidence of consensus is sufficient, even if signatures are absent.
Dispute in Glencore International AG v. Shree Ganesh Metals
Background
Parties: Glencore International AG, a Swiss commodity trading company, and Shree Ganesh Metals, an Indian zinc alloy producer.
Prior Dealings: Between 2011–2012, four signed contracts containing arbitration clauses were executed.
Fifth Contract (2016): Parties negotiated a contract for 6,000 metric tons of zinc. Terms were settled through email exchanges. Glencore drafted and signed the written contract (No. 061-16-12115-S) and sent it for counter-signature. Shree Ganesh Metals did not sign.
Parties’ Conduct
Despite the absence of signature:
- Glencore supplied 2,000 metric tons of zinc.
- Shree Ganesh Metals accepted deliveries and raised invoices referring to the contract.
- HDFC Bank, at Shree Ganesh Metals’ request, issued multiple Standby Letters of Credit citing the contract.
- Email correspondence consistently referred to the contract number and obligations.
Dispute
When payment defaults arose, Glencore invoked arbitration under clause 32.2 of the 2016 contract (providing for LCIA arbitration, seat in London). Shree Ganesh Metals resisted, arguing that no arbitration agreement existed because it had never signed the contract.
The Delhi High Court (Single Judge and Division Bench) sided with Shree Ganesh Metals, holding that unsigned contracts lacked enforceability.
Supreme Court’s Ruling
The Supreme Court overturned the High Court and held that the arbitration agreement was valid and enforceable.
Key Findings
1) Conduct outweighs absence of signature:
The Court emphasised that Shree Ganesh Metals had acted upon the 2016 contract—accepting supplies, arranging bank guarantees, and acknowledging contractual obligations in correspondence. These actions manifested consent to the contract, including its arbitration clause.
2) Email exchanges suffice as “agreement in writing”:
Section 7(4) expressly recognises exchanges through telecommunication. The emails confirming terms and price adjustments evidenced consensus ad idem.
3) Signature is not a statutory requirement:
Referring to precedents (Govind Rubber Ltd. v. Louis Dreyfus (2015) 13 SCC 477; Caravel Shipping Services v. Premier Sea Foods (2019) 11 SCC 461), the Court reiterated that an arbitration agreement must be in writing, but need not be signed.
4) Commercial efficacy and intention:
Courts must lean towards giving effect to arbitration clauses rather than nullifying them on technicalities. Commercial documents should be construed pragmatically to preserve business efficacy.
5) Referral Court’s limited role under Section 45:
Courts need only make a prima facie determination of an arbitration agreement’s existence; a full-fledged trial on validity belongs to the arbitral tribunal (doctrine of Kompetenz-Kompetenz).
The Court held that clause 32.2 of the 2016 contract was binding, and disputes must be referred to arbitration. The refusal of the Delhi High Court was unsustainable in law.
Key Highlights of the Decision
Justice Sanjay Kumar and Justice Satish Chandra Sharma stated:
“There is no denying the legal proposition that an arbitration agreement can be inferred even from an exchange of letters, including communication through electronic means, which provide a record of the agreement. The mere fact that Contract No. 061-16-12115-S was not signed by respondent No.1 would not obviate from this principle when the conduct of the parties in furtherance of the said contract, clearly manifested respondent No. 1’s acceptance of the terms and conditions contained therein, which would include the arbitration agreement in clause 32.2 thereof.”
The Supreme Court, relying on Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia Pvt. Ltd. (2015) 13 SCC 477, emphasised:
“It is clear that for construing an arbitration agreement, the intention of the parties must be looked into. The materials on record which have been discussed hereinabove make it very clear that the appellant was prima facie acting pursuant to the sale contract issued by the respondent. So, it is not very material whether it was signed by the second respondent or not.”
Precedents Supporting Unsigned Arbitration Agreements
- Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia (2015): Held that arbitration agreements need not be signed if there is written evidence (letters, emails, telex). Party conduct demonstrating consensus is sufficient.
- Caravel Shipping Services Pvt. Ltd. v. Premier Sea Foods Exim Pvt. Ltd. (2019): Reiterated that only writing, not signature, is essential under Section 7(3). Arbitration clauses embedded in commercial documents were enforced despite the lack of signatures.
- Jugal Kishore Rameshwardas v. Goolbai Hormusji (1955): Earlier jurisprudence affirmed that arbitration agreements could exist without signatures if writing evidenced mutual consent.
- Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd. (2005): Held that courts, at the referral stage, should only take a prima facie view and leave deeper examination to the arbitral tribunal.
Implications of the Judgment
- Reinforcement of Party Autonomy: The decision strengthens party autonomy by prioritising the parties’ actual conduct and intent over formal signatures. Businesses can no longer avoid arbitration merely by withholding a signature while benefiting from the contract.
- Certainty for Cross-Border Trade: In international commerce, deals are often concluded swiftly via emails and electronic confirmations. The ruling reassures foreign investors that Indian courts will uphold arbitration commitments even in the absence of formal signatures.
- Reduced Scope for Dilatory Tactics: Parties cannot exploit technicalities to delay dispute resolution. If evidence shows they acted on a contract, arbitration will be enforced.
- Emphasis on Commercial Sense: By construing commercial documents to preserve efficacy, the Court affirms that arbitration law must adapt to modern business realities, including e-commerce and electronic contracting.
Conclusion
The Supreme Court’s judgment in Glencore International AG v. Shree Ganesh Metals & Anr. is a landmark reaffirmation that arbitration agreements can be enforced even without signatures, provided the parties’ conduct evidences clear acceptance.
By aligning with international standards and giving primacy to substance over form, the Court has ensured that Indian arbitration law keeps pace with modern commercial realities. The ruling curbs dilatory tactics, strengthens contractual certainty, and reassures global investors of India’s pro-arbitration stance.
Ultimately, the decision underscores a pragmatic truth: in arbitration, what matters most is not the ink on the paper, but the intent and conduct of the parties.