Arbitration Clause Not Binding If Mandatory Reference to Arbitration Is Absent: Calcutta High Court

The Calcutta High Court, in a recent decision by Justice Shampa Sakar, held that if an arbitration clause in an agreement merely provides a discretion to refer disputes to arbitration after they have arisen, it cannot be considered a binding arbitration agreement under the Arbitration and Conciliation Act, 1996. The court clarified that in such cases, disputes cannot be referred to arbitration without fresh consent from the other party. Background…