The Supreme Court of India has set aside Delhi High Court’s ruling and upheld the arbitration agreement between Swiss company Glencore International AG and Indian firm Shree Ganesh Metals. The apex court clarified that even if a contract is not formally signed by both parties, their conduct and acceptance of terms can bind them to arbitration.
Case Background
Glencore, a Switzerland-based mining and commodity trading company, had business dealings with Shree Ganesh Metals, a proprietorship firm in Himachal Pradesh producing zinc alloys. Between 2011 and 2012, four contracts were executed, each containing arbitration clauses referring disputes to the London Court of International Arbitration (LCIA) with London as the seat.
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In March 2016, both parties negotiated a fresh contract for supply of 6,000 metric tons of zinc metal. Email exchanges finalized terms, including pricing based on average of 5 LME (London Metal Exchange) days, as suggested by Shree Ganesh Metals. Glencore then issued Contract No. 061-16-12115-S dated 11.03.2016, signed by it and sent for countersignature.
Although Shree Ganesh Metals never signed, they accepted 2,000 MT zinc supplies, allowed invoices quoting the contract, and even arranged Standby Letters of Credit through HDFC Bank referring to the same contract.
When disputes arose in 2016 over Letters of Credit and supply obligations, Shree Ganesh Metals filed a civil suit in Delhi High Court, seeking recovery of around ₹8 crores and an injunction against Glencore.
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Glencore invoked Section 45 of the Arbitration and Conciliation Act, 1996, arguing that the arbitration clause in the 2016 contract bound both parties.
However, the Delhi High Court (single judge in 2017 and Division Bench in 2019) rejected Glencore’s plea, holding that no concluded contract existed since Shree Ganesh Metals had not signed the document.
The Supreme Court disagreed with the High Court and emphasized that an arbitration agreement need not always be signed if conduct and communications show consent.
“The mere fact that Contract No. 061-16-12115-S was not signed by respondent No.1 would not negate its binding effect when both parties acted upon it, including supply, invoices, and Letters of Credit.” – Justice Sanjay Kumar
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The Court noted:
- Shree Ganesh Metals accepted supplies and issued Letters of Credit under the disputed contract.
- Email correspondence clearly showed acceptance of modified pricing terms.
- The civil suit itself was based on Letters of Credit linked to the 2016 contract, proving its existence.
The bench also cited earlier rulings like Govind Rubber Ltd. vs. Louis Dreyfus Commodities Asia Pvt. Ltd. and Caravel Shipping Services Pvt. Ltd. vs. Premier Sea Foods Exim Pvt. Ltd., which held that a written arbitration agreement can be binding even without signatures if parties act upon it.
The Supreme Court allowed Glencore’s appeal, set aside the Delhi High Court’s orders of 2017 and 2019, and directed that the disputes be referred to arbitration in line with the 2016 contract’s arbitration clause.
This ruling reinforces the principle that conduct and performance matter as much as formal signatures when determining validity of arbitration agreements in commercial contracts.
Case: Glencore International AG vs. Shree Ganesh Metals & Anr.
Case Number: Civil Appeal No. 11067 of 2025 (arising out of SLP (C) No. 27985 of 2019)
Date of Judgment: 25 August 2025
Appellant: Glencore International AG (Swiss company, mining & commodity trading)
Respondents:
- M/s Shree Ganesh Metals (Indian proprietorship, zinc alloys producer, Himachal Pradesh)
- HDFC Bank (related to issuance of Standby Letters of Credit)
