Arbitration Clause Requiring Fresh Mutual Consent Is Not Binding: Karnataka High Court

The Karnataka High Court has refused to appoint an arbitrator in a dispute between Riemen Solution Private Limited and Swiggy Limited, holding that a contractual clause making arbitration conditional on fresh mutual consent does not constitute a binding arbitration agreement.

“The Court can neither delete these words from the Agreement, nor rewrite the bargain between the parties by converting a conditional reference to arbitration into an unconditional one,” Justice H T Narendra Prasad held while dismissing Riemen's petition.

The court was considering whether a clause requiring disputes to be referred to arbitration “if mutually agreed upon by the parties” constituted a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996.

The dispute arose from a Call Centre Services Agreement executed by Riemen and Swiggy on December 9, 2021. The agreement required the parties to attempt to resolve disputes mutually within 30 days of receiving written notice. If the dispute remained unresolved, it could be referred to arbitration only if both parties agreed.

Riemen issued an arbitration notice on September 2, 2025, under Section 21 of the Act. Swiggy rejected the proposal to refer the dispute to arbitration, prompting Riemen to approach the High Court under Section 11(6), seeking appointment of a sole arbitrator.

Riemen argued that the clause demonstrated the parties' intention to arbitrate. It provided for a sole arbitrator, arbitration under the 1996 Act and an award that would be final and binding. The company contended that deficiencies in drafting should not defeat the parties' intention.

Swiggy argued that the requirement of mutual agreement applied to the decision to refer the dispute to arbitration itself, rather than merely to the appointment of the arbitrator.

Accepting this interpretation, the court held that the clause made the reference to arbitration conditional on further mutual consent.

“The qualification occurs between the words 'shall' and 'be submitted for arbitration'. Therefore, grammatically as well as contextually, the requirement of mutual agreement attaches to the very submission of the dispute to arbitration,” the court observed.

It distinguished between an agreement in which the parties commit to arbitration but leave the appointment of the arbitrator to future agreement and one in which the reference to arbitration itself depends on fresh mutual consent.

The court said provisions specifying the arbitration procedure, venue and binding nature of the award could not override this condition. It also rejected the argument that the clause suffered merely from imperfect drafting.

“The clause contains an express substantive qualification making submission to arbitration dependent upon further mutual agreement,” it held.

Relying on Supreme Court decisions in Jagdish Chander v. Ramesh Chander and Nagreeka Indcon Products Private Limited v. Cargocare Logistics (India) Private Limited, the court reiterated that an arbitration clause must establish a binding obligation to arbitrate, rather than merely contemplate the possibility of arbitration in the future.

The court held that a concluded arbitration agreement was a prerequisite for appointing an arbitrator under Section 11. Since the clause did not establish such an agreement, it dismissed Riemen's petition

For Petitioner (Riemen Solution Private Limited): Advocates Kapil Malik and Manjunath C.

For Respondent (Swiggy Limited): Senior Advocate Pramod Nair and Advocate Nikhil Hegde.