Arbitration Clause Need Not Be Reproduced In Work Orders If GCC Is Incorporated: Bombay High Court

The Bombay High Court has held that an arbitration clause need not be reproduced in individual work orders where the General Conditions of Contract containing the clause have been incorporated by reference.

Justice Amit Borkar held that the relevant question is whether the General Conditions were incorporated into the work orders or were referred to only for a limited purpose, while appointing a sole arbitrator in a payment dispute between Shivkumar Enterprises and TATA Projects Limited. The Bench observed:

“Section 7(5) permits an arbitration agreement to be incorporated by reference to another document. Therefore, in every case it is not necessary that the arbitration clause should be copied separately into the Work Order. What has to be seen is whether the reference to the GCC was made only for some limited purpose or whether the terms of the GCC were intended to apply to the Work Orders.”

The dispute arose from four work orders issued by TATA Projects to Shivkumar Enterprises on 13 October 2021, 12 November 2021 and 21 June 2023 (two orders) concerning the Chembur Slum Rehabilitation Project.

Shivkumar Enterprises claimed that it had completed the assigned work, submitted running account bills and received Virtual Completion Certificates from TATA Projects. It alleged that the final outstanding payments remained unpaid despite completion of the work and settlement of the running bills. It issued demand notices on 3 October and 18 October 2025. TATA Projects disputed the demands through replies dated 10 October 2025 and 6 January 2026.

Subsequently, Shivkumar Enterprises invoked Clause 41 of the General Conditions for Contract Services (GCC) on 17 December 2025, seeking arbitration. TATA Projects refused to accept the invocation notice on 24 January 2026.

Shivkumar Enterprises then approached the High Court under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator. It argued that all four work orders were governed by the GCC, which expressly provided for arbitration.

TATA Projects contended that a general reference was insufficient to incorporate an arbitration clause, particularly when Shivkumar Enterprises had not separately signed the GCC. It further argued that the mandatory amicable settlement procedure had not been followed, Goods and Services Tax documentation remained outstanding, and the four independent work orders could not be combined into a single arbitration proceeding.

Rejecting these objections, the Court held that the work orders and GCC had to be read together and that it was not necessary for each work order to separately reproduce the arbitration clause. It observed:

“The Work Orders are to be read with the GCC. The rights and obligations of the parties cannot be completely understood without looking at the conditions contained in the GCC”

Further, it held that although each work order may involve separate obligations, payment terms and claims requiring individual examination, the existence of four separate work orders did not negate a common arbitration agreement. It stated:

“It is correct that each Work Order may contain its own scope of work, obligations, payment terms and claim. Therefore, the claim under each Work Order may have to be separately examined. But the fact that there are four Work Orders does not by mean that there is no common arbitration agreement.”

The Bench also clarified that alleged non-compliance with the settlement procedure and outstanding tax documentation did not negate the arbitration agreement, and that such objections could be examined by the arbitral tribunal insofar as required.

It found that an arbitration agreement existed at least prima facie, and appointed Advocate Shadab Jan as sole arbitrator to adjudicate the disputes arising from all four work orders. It directed that the arbitration costs be shared equally initially, subject to the final award, while keeping all questions concerning the merits of the payment dispute open.

Accordingly, the High Court disposed of the application.

Appearances for petitioner (Shivkumar Enterprises): Advocates Hamid Ansari, Madhusmita Sahoo, instructed by Prashant D. Jadhav.

Appearances for respondent (TATA Projects Limited): Advocates Aushi Doshi, Surbhi Ahuja, instructed by India Law LLP.