Arbitration clause in purchase order

The question whether there is provision for arbitration in the contract came up again in the Supreme Court and it held that a general reference to a standard form of contract by one party would be enough to incorporate an arbitration clause. Also, a reference to the standard form of professional bodies and trade associations would be sufficient to incorporate an arbitration clause. In this case, Inox Wind Ltd vs Thermocables Ltd, a purchase order was issued by Inox, manufacturer of wind turbine generators, with Thermocables for wind power cables. The purchase order contained a clause on dispute resolution. It said that a sole arbitrator would resolve disputes according to the Arbitration and Conciliation Act. Disputes indeed arose over the quality of the cables. Inox named an arbitrator. Thermocables maintained there was no arbitration clause. The matter was taken to the Allahabad High Court. It ruled that there was no arbitration clause and therefore it could not appoint an arbitrator. On appeal, the Supreme Court set aside the high court ruling and appointed a retired judge as the arbitrator. It stated that Thermocable had accepted the terms and conditions in the purchase order, which contained the arbitration clause. “The purchase order is a single contract and general reference to the standard form even if it is not by a trade association or a professional body is sufficient for incorporation of the arbitration clause,” the judgment said.