Introduction
In a recent judgement of the Delhi High Court, it was held that if the array of parties in both agreements is not identical an express reference to the arbitration clause in an earlier agreement is required in order to infer consent of the new party to such method of dispute resolution.

Facts in a Nutshell
A petition was filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, by the Petitioner, Murari Lal Agarwal, for reference to arbitration of the disputes alleged to have arisen out of an agreement dated 31st October 2013 between the Petitioner, M/s KMC Construction Ltd. ("KMC"), Pink City Expressway Ltd. ("Pink City"), and ETA Star Infrastructure Ltd. ("ETA"). It was the contention of the Petitioner that the 31st October 2013 agreement made reference to an agreement dated 5th October 2013 between the Petitioner and ETA, which contained an arbitration clause. The petition was opposed on behalf of KMC, one of the Respondents, who contended that there was no arbitration agreement between the Petitioner and KMC.

Issue for consideration
The issue that fell for determination before the Hon'ble Delhi High Court was whether, in the absence of a specific reference to the arbitration clause contained in a previous agreement to which all the parties of the subsequent agreement were not parties, the arbitration clause in the former agreement could be invoked in the disputes arising from the subsequent agreement.

Court’s Analysis
The Hon'ble High Court rejected the petition and relegated the parties to the remedies available to them with respect to their claims. In doing so, the Hon'ble High Court addressed the issue of whether an arbitration clause contained in one contract stands incorporated by reference into a subsequent contract. The Court held that the question had been examined in several decisions of the Supreme Court and the Hon’ble Delhi High Court. The principal authorities relied upon by the learned counsel for both sides include the judgments of the Supreme Court in M.R. Engineers and Contractors Pvt. Ltd. v. Som Datt Builders Ltd., reported at (2009) 7 SCC 696, and Mac Associates v. Parvinder Singh, reported at 2024 SCC OnLine Del 1313.

Applying these principles, the Court observed that the case at hand was factually similar to the judgment in Mac Associates. This is also a "two-contract case," rather than a "single-contract case," where the arbitration clause is incorporated by reference to standard terms and conditions. In the present case, Respondent No. 1/KMC is a party only to the agreement dated 31st October 2013, which does not contain an express arbitration clause. Furthermore, it did not include any specific reference to the incorporation of the arbitration clause.

The judgments cited above clarify that if the array of parties in both agreements is not identical, an express reference to the arbitration clause is required to infer the consent of the new party to such a method of dispute resolution. The Court held that firstly, the agreement dated 31st October 2013 did not contain an express reference to the arbitration clause. Secondly, Clause 19 of the agreement indicates a contrary intention by stating that disputes under the agreement would be subject to the "jurisdiction of Courts in Delhi, India alone."

The Court thus rejected the Petitioner’s submission that the reference to "all terms and conditions" is sufficient to incorporate the arbitration clause from the previous agreement.¹

By - Chaitanyaa Bhandarkar