A Cross-Border Coal Deal, WhatsApp Negotiations, and a Cancelled Contract: The Dispute Explained in the case of Belvedere Resources DMCC v. OCL Iron and Steel Ltd. & Ors. by the Delhi High Court

Index of Headings

1. Introduction
2. Defining and Proving Electronic Evidence
3. Admissibility of Electronic Records
4. Subject Matter
5. Contentions of the Petitioner
6. Contentions of Respondent No. 1
7. Court’s Analysis and Findings
8. Alignment with International Standards
9. Conclusion
10. FAQs

Introduction

The Delhi High Court, in the case of Belvedere Resources DMCC v. OCL Iron and Steel Ltd. & Ors., has ruled that an arbitration agreement can be validly constituted through WhatsApp and email exchanges, even without a formally signed contract, under Section 7(4)(b) of the Arbitration and Conciliation Act, 1996.

Defining and proving electronic evidence
Under Section 3 of the Evidence Act, 1872, “evidence” includes all documents produced for the court’s inspection, which covers electronic records defined in Section 2(t) of the Information Technology Act, 2000 as data, images, sounds or records stored, received or sent electronically or on computer-generated media. As per Section 22A of the Evidence Act, oral admissions about the contents of electronic records are generally irrelevant unless the record’s genuineness is questioned. Further, Section 59 clarifies that facts can be proved by oral evidence except where they relate to the contents of documents or electronic records, which must be proved by producing the records themselves rather than by oral description.

Admissibility of electronic records:

Under Section 65A of the Evidence Act, special rules apply to proving electronic records, which must be done according to Section 65B. As per Section 65B (1), any information from an electronic record that is printed, stored, or copied from a computer is treated as a document and is admissible in court without needing the original, provided certain conditions are met. Section 65B (4) requires a certificate to accompany such evidence, which must (i) identify the electronic record and describe how it was produced, (ii) provide details of the device that produced it, (iii) confirm that the computer was regularly used and properly functioning during the relevant period as per Section 65B (2), and (iv) be signed by a person stating these facts to the best of their knowledge and belief.

Subject Matter

The dispute arose from a commercial transaction initiated in September 2022 involving the sale of coal. The parties—Belvedere Resources DMCC (a UAE-based company) and SM Niryat (merged with OCL Iron and Steel Ltd.) negotiated terms primarily over WhatsApp and email. Belvedere shared the terms of the agreement by October 2022. Despite repeated requests, SM Niryat failed to make the advance payment and abruptly canceled the deal in November 2022. Belvedere then invoked arbitration at the Singapore International Arbitration Centre (SIAC) in June 2024 and filed a Section 9 petition to secure approximately $2.77 million (about ₹23.34 crore) from OCL and its subsidiaries.

The respondents challenged the existence of a valid arbitration agreement, arguing that no signed contract existed, and denied the court’s jurisdiction. The central legal question was whether the arbitration agreement could be deemed valid based solely on digital communications like WhatsApp messages and emails.

Contention of the Petitioners

The petitioner argued that a valid ScoTA contract was concluded after thorough negotiations, and under English law, acceptance can be inferred from conduct even without a formal signature (Anotech International v. Reveille). SMN’s cancellation on 15 November 2022 itself shows the existence of a binding contract, which was wrongfully repudiated after the petitioner had already performed key obligations like nominating a vessel.

Due to this breach, the petitioner suffered real and direct losses by reselling the coal at a lower market price (Golden Strait Corp v. Nippon Yusen). It was also pointed out that SMN concealed ongoing amalgamation proceedings with R1 during contract talks, and after the merger, R1 inherited all SMN’s liabilities under Section 232 of the Companies Act.

The petitioner sought interim relief under Section 9 to secure about USD 2.77 million. R1 delayed filing asset disclosures and falsely claimed to have no office in Delhi, despite using a Delhi address in official filings and holding valuable shares in a company with a Delhi office. Most of R1’s assets are heavily mortgaged, raising concerns over its ability to satisfy an arbitral award. Overall, the petitioner has a strong prima facie case, and there is a real risk that any award could become unenforceable if assets are dissipated.

Contention of the Respondent no. 1

The respondent argues there is no valid arbitration agreement because the ScoTA contract was never fully executed, and merely negotiating terms is insufficient. They also contend this Court lacks territorial jurisdiction since neither party has an office in Delhi at the relevant time, and the presence of assets here doesn’t create jurisdiction under the law; jurisdiction depends on where the defendant resides or carries on business when proceedings are filed. They further say the initial notice sent in December 2022 was only a demand letter, not a valid arbitration invocation; actual invocation happened much later in June 2024. No part of the cause of action arose in Delhi, and under CPC Sections 16–20, the Delhi court couldn’t have entertained a suit for damages for breach of contract.

Additionally, the respondent says the claim is for unliquidated damages, which isn’t an admitted debt, so no security can be granted under Section 9 of the Arbitration Act. They argue no evidence shows dissipation of assets to justify attachment, and the CIRP process was already resolved. The resale contract relied on to prove loss wasn’t filed with the petition and doesn’t match the original contract terms, so actual loss isn’t shown. There’s also an unexplained delay since the breach in November 2022. Finally, they say the petitioner should have used SIAC Rule 30 (like Section 17 of the Act) for interim relief once the tribunal was formed, so this application is barred by Section 9(3).

Court’s Analysis and Findings

• Interpretation of Section 7(4)(b) of the Arbitration Act: The Court emphasized that this provision does not mandate a signed physical contract for an arbitration agreement to be valid. Instead, it requires that the arbitration clause be evidenced by written communications showing the parties’ consent to arbitrate.
• Consent inferred from electronic communications: Justice Jasmeet Singh held that the arbitration agreement was clearly contained in the WhatsApp and email exchanges, which showed mutual consent to arbitrate disputes. The Court stated that the act of agreeing can be inferred from relevant documents and communications, which need not be in the form of a traditionally executed contract.
• Existence of clear terms and repeated confirmations: The Court found that the parties had exchanged detailed terms, including references to a Standard Coal Trading Agreement (ScoTA) incorporating arbitration clauses. SM Niryat had acknowledged receipt, promised to sign, and repeatedly confirmed the transaction through these digital communications, evidencing their intention to be bound by the arbitration clause.
• Jurisdictional ruling: Although the Court affirmed the validity of the arbitration agreement, it dismissed the Section 9 petition on the ground that it lacked territorial jurisdiction. The transaction was negotiated and repudiated through OCL’s Kolkata office, and the mere presence of a Delhi branch or holding shares in a listed company with a Delhi office was insufficient to confer jurisdiction.

Alignment with International Standards

The amendment to Section 7(4)(b) of the Arbitration and Conciliation Act, 1996, aligns Indian law with international standards on electronic arbitration agreements by expressly recognizing that arbitration agreements can be validly formed and evidenced through electronic communications, such as emails and digital signatures. This legislative move mirrors the provisions of the UNCITRAL Model Law, which allows arbitration agreements to be concluded by electronic means as long as the content is accessible for future reference.

The recent and proposed amendments, including those in the Draft Arbitration and Conciliation (Amendment) Bill, 2024, further modernize the Indian arbitration framework by validating digitally signed arbitration agreements and incorporating technology into arbitral proceedings. These changes provide legislative backing to practices already accepted internationally, such as the use of audio-video electronic means for hearings and the recognition of electronic records as evidence of consent to arbitrate. 

Conclusion

This judgment is a landmark in recognizing digital communications such as WhatsApp messages and emails as valid and binding sources of arbitration agreements under Indian law. It reflects the modern commercial reality where contracts and dispute resolution agreements increasingly arise from electronic correspondence rather than traditional signed documents.

FAQs

Q: How is electronic evidence proved and admitted in Indian courts?
A: Electronic records are treated as documentary evidence under Section 3 of the Evidence Act, 1872. To be admissible, Section 65B requires a certificate describing how the record was produced, details of the device, and confirmation it was used regularly and properly. Oral evidence alone isn’t enough unless genuineness is questioned. The certificate must be signed by someone stating these facts to the best of their knowledge.

Q: What was the dispute about?
A: It concerned a September 2022 coal sale deal negotiated mainly over WhatsApp and email between Belvedere Resources DMCC and SM Niryat. After SM Niryat cancelled the deal without paying, Belvedere sought arbitration and interim relief. The key legal issue was whether these digital messages could form a valid arbitration agreement.

Q: What did the Court decide?
A: The Court held that an arbitration agreement can be validly formed through emails and WhatsApp messages showing mutual consent. It found clear terms and repeated confirmations in the chats. However, it dismissed the Section 9 petition, ruling it lacked territorial jurisdiction in Delhi.