Bombay HC Sends Four Kotak Credit-Card Disputes To Arbitration Despite Unsigned Applications, Finding Prima Facie Evidence Of Card Use

Kotak Mahindra Bank filed four applications under Section 11 of the Arbitration and Conciliation Act, 1996, seeking reference of disputes concerning credit-card facilities to arbitration under Clause 32 of its Cardholder Agreement.

In the lead matter, the Bank alleged that the respondent obtained and used a credit card and accepted the applicable terms.

The application and electronic records showing acceptance were not produced; the Bank stated that the records were with a former vendor.

It relied instead on the Cardholder Agreement, a summary account statement and an affidavit from its authorised representative asserting that the respondent had obtained and used the facility.

Clause 2.1 provided that use of the card constituted acceptance of the Agreement.

Section 7 of the Arbitration and Conciliation Act, 1996 requires an arbitration agreement to be in writing, but a signature is not indispensable: the agreement may be evidenced by a signed document, recorded communications, an exchange of pleadings, or incorporation by reference, as applicable.

In Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia (P) Ltd., (2015) 13 SCC 477, the Supreme Court held that an unsigned agreement may be established by a written record demonstrating the parties’ assent and that the parties’ identity and a record of agreement must be shown.

Under Section 11(6-A), the referral court’s inquiry is prima facie and should not become a mini-trial; the party relying on the arbitration agreement must nevertheless adduce prima facie material of its existence.

The Court relied on A.P. Power Generation Corpn. Ltd. v. Tecpro Systems Ltd., (2026) 3 SCC 491, and Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1.

Objections to the tribunal’s jurisdiction and the agreement’s existence or validity may be considered under Section 16.

The Court treated the lack of a signed application and missing digital records as relevant, but not conclusive.

Clause 2.1 expressly recognised card use as acceptance; the Bank’s authorised representative stated on oath that the respondent obtained and used the facility, and the account statement linked the respondent to the card and recorded an outstanding balance.

Taken together, this material was sufficient for the limited prima facie inquiry under Section 11, notwithstanding that the statement did not disclose individual transactions.

The Court did not treat the Bank’s explanation about its former vendor as proof of consent, nor did it decide the authenticity of the digital process, the transactions or the debt. Those matters were left for the tribunal.

It allowed the applications and appointed Mr. Shadab Jan, Advocate, as sole arbitrator to adjudicate the disputes in all four matters, subject to the directions concerning disclosure, communications and costs.

Questions concerning the digital applications, card use, transaction authority, account accuracy and amounts claimed were expressly left open for independent determination by the tribunal.