General Reference to Standard Agreement Terms Does Not Incorporate Arbitration Clause Without Specific Intent or Reference

The petitioner was appointed as an ad hoc dealer for a Hindustan Petroleum Corporation Ltd. (HPCL) retail outlet via a communication dated April 18, 2018

The arrangement was initially for one year, later extended due to the COVID-19 pandemic until September 30, 2020

Following HPCL’s policy dated December 3, 2003, which limits ad hoc tenures to a maximum of two years, the respondent initiated a fresh selection process and appointed a new ad hoc dealer on September 11, 2020

The petitioner challenged this replacement, asserting a right to continue until a "regular" dealer was appointed

After a civil suit was dismissed for lack of jurisdiction and a Section 9 petition was dismissed for lack of an arbitration agreement, the petitioner filed the present application under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator

1. Whether an arbitration agreement exists between the parties through the incorporation of the Standard Dealership Agreement into the ad hoc appointment letter

2. Whether the petitioner’s ad hoc arrangement could legally exceed the two-year maximum stipulated in the Corporation’s policy

Section 7(5) of the Arbitration and Conciliation Act, 1996, regarding the incorporation of an arbitration clause by reference.

The reference to a document must clearly indicate an intention to incorporate the arbitration clause and not just terms of execution as established in M.R. Engineers & Contractors Pvt. Ltd. v. Som Datt Builders Ltd. (2009).

A general reference to tender or standard conditions is insufficient; the intent to incorporate the arbitration clause must be explicitly clear and specific as affirmed in M/s Inox Wind Ltd. v. M/s Thermocables Ltd. (2018) and Maharashtra State Electricity Distribution Co. Ltd. v. R Z Malpani (2026).

The court examined the appointment communication dated April 18, 2018, noting it contained no independent arbitration clause.

While Clause 13 of said letter referred to the "Standard Dealership Agreement," the court observed that this incorporation was limited "solely for the purpose of the outlet's operation" and only to the extent not inconsistent with the temporary Nature of the ad hoc appointment

Applying the M.R. Engineers test, the court reasoned that the parties intended to exclude the arbitration clause (Clause 66 of the Standard Agreement) by specifically limiting the scope of the reference to operational matters

Regarding the tenure, the court found that Clause 7 of the appointment letter and Clause 9 of the 2003 Policy explicitly capped ad hoc arrangements at two years, meaning the petitioner’s rights expired by efflux of time and mandatory policy compliance

Consequently, the petition under Section 11(6) was dismissed as misconceived

The court ordered the associated appeal (AA No. 15/2020) to be listed before the Commercial Appellate Division