Glen International AG (Referred as 'Glen'), a Swiss company handling the business of mining and commodity trading, entered into a series of contracts with SG Metals (Referred as 'SG') for the supply of zinc metals. All c

Key Elements of Section 45 of Arbitration and Conciliation Act, 1996 The essence of Section 45 of Arbitration and Conciliation Act, 1996 (the Act) is to restrict unnecessary court interference when parties have already agreed to settle disputes through foreign arbitration. Judicial Authority: Courts in India have the power and duty, to refer parties to arbitration if the dispute is covered by a valid foreign arbitration agreement under Section 44. Mandatory Referral: Once an arbitration clause is established, courts cannot adjudicate the matter on merits but must refer the dispute to arbitration. Scope: Applies only to foreign awards covered under the New York Convention countries (as per Section 44 of the Act). The given situation is based on the decided case law Glencore International AG v. M/s. Shree Ganesh Metals and another decided by Supreme Court on 25th August, 2025. In this case, whilst determining the issue, the Supreme Court ostensibly based its decision on the 'second alternative' of an agreement in writing, i.e., inferring the validity of an arbitration agreement through an exchange of communications such as emails, which provides a record of agreement. Along with invoking the second alternative to an agreement in writing, it was held that SG Metals cannot blithely bank upon its own failure to sign the said Contract and now renege from the binding terms and conditions contained therein. One of the most crucial factors that weighed-in against SG Metals was its communication regarding modifying the provisional prices, that was subsequently accepted by Glencore as it shared the Contract for signing by SG Metals. Thereafter, the Supreme Court relied upon Govind Rubber Limited v. Louis Dreyfus Commodities Asia Private Limited , to hold that an arbitration clause must be interpreted in a manner to give effect to the same rather than invalidate it. Coupled with this, it reiterated that at the referral stage, the scope of inquiry is limited to prima facie proof of the existence of an arbitration agreement. Subsequently, through the doctrine of Kompetenz-Kompetenz, the validity and existence of an arbitration agreement may be decided by the arbitral tribunal. Accordingly, the Supreme Court set-aside the orders passed by the High Court, restored the application filed by Glencore, and directed the parties to be referred to arbitration. Conclusion: A valid and binding arbitration agreement exists notwithstanding the absence of SG's signature on the Contract because Section 45 does not require a formally signed agreement in every case. Section 7 recognizes agreements evidenced through correspondence and conduct. SG accepted delivery of goods and acted upon the Contract. Subsequent communications demonstrated acceptance of contractual obligations. The arbitration clause forms part of the Contract accepted by SG. In view of the above discussion, Glen International AG can succeed in the case before the Supreme Court.