It started with a WhatsApp ping. A few emails later, a ship was en route carrying coal worth millions. But when the buyer backed out and a legal battle began, the Delhi High Court faced a crucial question: Whether WhatsApp and email document correspondence form valid arbitration agreements?
The Delhi High Court in Belvedere Resources DMCC v. OCL Iron and Steel Ltd & Ors1 has delivered a landmark ruling: WhatsApp and email exchanges may constitute a binding arbitration agreement if statutory conditions are met. With commercial conversations moving swiftly across WhatsApp and email, the Delhi High Court's recent judgment redefines what counts as an agreement. For businesses managing cross-border transactions, this ruling delivers timely clarity on digital deal-making, enforceability, and arbitration readiness.
Background: A WhatsApp deal that sailed into dispute
In this case, Belvedere ("petitioner"), a UAE-based company, entered into a coal sale agreement with OCL Iron and Steel Limited's ("respondent") former entity, SM Niryat Private Limited ("SMN"). The contract negotiations and confirmations were largely carried out through WhatsApp and emails, culminating in the circulation of a finalised Standard Coal Trading Agreement ("ScoTA") by Belvedere, which was never formally signed but allegedly confirmed through conduct. After confirming pricing, delivery timelines, and ports, a vessel was nominated and set to sail.
On November 15th 2022, SMN unilaterally cancelled the agreement, prompting Belvedere to initiate arbitration proceedings before the Singapore International Arbitration Centre (SIAC) and concurrently file a petition under Section 9 of the Arbitration and Conciliation Act, 1996, before the Delhi High Court. In doing so, the petitioner sought urgent interim relief in the form of targeting the asset security of USD 2.77 Million (United States Dollar Two Million Seven Hundred Seventy Thousand only), asset disclosure, attachment, and to safeguard its claim pending the arbitral proceedings.
The OCL contested the petition on multiple grounds:
- Lack of territorial jurisdiction since the entire transaction was centered in Dubai, Singapore, and Kolkata.
- No part of the cause of action arose in Delhi, as the registered office of the respondent was located in Kolkata.
- Asserted that the petitioner's claim was one for unliquidated damages, which does not constitute a legally enforceable 'debt' unless adjudicated by a competent authority.
- Until a competent authority adjudicates and quantifies the damages, the claim remains a mere assertion and cannot be used to seek interim relief.
- OCL strongly opposed any order for asset attachment or security, stating that such relief would be premature and legally unsustainable.
Legal Issues: Arbitration Agreements in the Digital Age
The Court considered three central questions in the petition:
- Whether the exchanged emails and messages constituted a valid arbitration agreement?
- Whether the court possessed territorial jurisdiction to entertain and adjudicate the petition?
- Whether the respondents should be directed to furnish security amount?
Judicial Analysis: No Jurisdiction, No Interim Measures
The Court's assessment of the arbitration agreement reflected a forward-looking application of Section 7(4)(b) of the Arbitration and Conciliation Act, 1996. It underscored that this provision does not hinge on traditional contractual formalities like physical signatures but rather on clear evidence of mutual intent captured through written communication. The court, relying on Cox & Kings Ltd. v. SAP India (P) Ltd. (2024) 4 SCC 1, reaffirmed that arbitration agreements can be inferred from exchanged documents if mutually acknowledged. It noted that formal signatures are not essential under Section 7(4)(b).
The court closely examined the email dated November 02, 2022, in which the petitioner shared the SCoTA contract, followed by the respondent's reply on November 3, 2022, requesting daily updates on vessel arrival times, indicating active engagement. Further, a WhatsApp message from the same day, in which the respondent confirmed that the SCoTA would be signed and sent shortly, was viewed as definitive evidence of agreement between the parties. Ultimately, the Court held that this series of communications left no ambiguity regarding the existence of a valid arbitration agreement, thereby setting an important precedent for recognising arbitration clauses formed through digital correspondence.
However, the petition was dismissed for lack of jurisdiction. Despite acknowledging that OCL maintained a branch office in Delhi, the Court applied the principle that mere existence of an office within the jurisdiction of the court would not be sufficient to permit the court to exercise jurisdiction over the subject matter of the litigation.2
The Court found that Kolkata was the hub of operations for all key operations in the dispute, including communication and contract repudiation. With negotiations via Singapore, coal sourced from South Africa, and delivery to Odisha and West Bengal, there was no link to Delhi. The court clarified that asset presence alone does not establish jurisdiction under the Code of Civil Procedure, 1908. While asset presence may matter in execution, it does not determine jurisdiction for filing the original petition.
Moreover, the court reaffirmed that unliquidated damages do not give rise to debt unless the liability is adjudicated upon by a competent Court or an adjudicating authority.3 Hence, the court noted that for damages to become a debt only after adjudication, at this stage, the petitioner only had a claim for damages, not a legally enforceable debt.
Key Takeaway: Reassessing Contractual Risk in Light of Digital Correspondence
The judgment signals a major shift in how business agreements are viewed under Indian law. It confirms that a valid arbitration agreement does not require a formal signature; what matters is clear intent, shown through emails or WhatsApp messages. The Court emphasised that mutual consent can be inferred from how parties behave, not just what they sign. By recognising everyday messaging tools like WhatsApp and email as valid channels for forming agreements, the ruling aligns the law with how modern business is done. As business transactions become increasingly fast-paced and digitally driven, organisations must recalibrate internal protocols, communication policies, and risk management strategies to address the legal implications of digital-era contract enforcement.
Footnotes
1. Belvedere Resources DMCC v. OCL Iron and Steel Ltd & Ors, O.M.P. (I) (COMM) 397/2024
2. Rattan Singh Associates v. M/S Gill Power Generation Company Pvt. Ltd. 2007 SCC OnLine Del 19
3. Union of India v. Raman Iron Foundry (1974) 2 SCC 231.
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