4 July 2025 Legal Updates

WHATSAPP, EMAIL COMMUNICATIONS BETWEEN PARTIES CAN CONSTITUTE VALID ARBITRATION AGREEMENT: DELHI HIGH COURT

(a) Case Title:

• Belvedere Resources DMCC v. OCL Iron and Steel Ltd & Ors

(b) Court:

• High Court of Delhi at New Delhi

(c) Date of Decision:

• 01 July 2025

(d) Bench:

• Hon'ble Mr. Justice Jasmeet Singh

Key Facts

There was a coal sale contract between the Petitioner-Belvedere Resources DMCC (UAE Coal trading company) and OCL Iron and Steel Ltd. and its subsidiaries SMN Ltd. for sale of coal worth USD 2,777,000/-. An agreement was made via WhatsApp and email exchanges in October 2022 using Standard Coal Trading Agreement (ScoTA)

SMN cancelled the contract on 15 November 2022 without paying advance amount or signing formal contract. SMN was amalgamated with OCL Iron and Steel Ltd in January 2024, making OCL liable for SMN's obligations

Legal Issues Decided

1. Whether there existed a Valid Arbitration Agreement?

The Court observed that under Section 7(4)(b) of Arbitration Act, arbitration agreement can exist through exchange of emails/communications. In the present case, email exchanges and WhatsApp communications contained arbitration clause. Formal signing is also not required if parties' conduct shows acceptance. Based on the above observations, the court concluded that a valid arbitration agreement existed between the parties.

2. Whether Delhi High Court had the territorial Jurisdiction to decide the matter?

The Court observed that the contract negotiated between Dubai (Petitioner) and Kolkata (Respondent) offices. The mere existence of branch office in Delhi insufficient for jurisdiction. No part of cause of action arose in Delhi. Asset presence doesn't confer jurisdiction for contract disputes. The Court concluded that the Delhi High Court lacks territorial jurisdiction.

3. Whether Court can Grant Security/Attachment Order

The Court observed that the claim for breach of contract damages doesn't create "debt" until adjudicated by court. Damages remain mere claim until court determines liability of the party. In the present case, there is no evidence of intent to defeat decree or dispose of assets. Attachment orders are drastic remedies requiring specific condition. The Court concluded that Security cannot be granted in the present case.

Key Legal Principles

1. Arbitration Agreement Formation

• Arbitration agreements can be formed through email/electronic communications
• Formal signing not mandatory if parties' conduct shows acceptance
• Section 7(4)(b) Arbitration Act allows agreements through document exchange

2. Territorial Jurisdiction

• Mere presence of office doesn't confer jurisdiction
• Cause of action location determines jurisdiction
• Asset location irrelevant for contract disputes (relevant only for execution)

3. Debt vs. Damages

• Debt: Present obligation to pay specific amount
• Damages: Compensation claim that becomes debt only after court adjudication
• Breach of contract creates right to sue, not immediate debt

'TIME TAKEN FOR PRE-ARREST MEDICAL EXAM CAN'T JUSTIFY DETENTION BEYOND 24 HOURS': BOMBAY HIGH COURT ORDERS RELEASE OF ACCUSED

(a) Case Title:

• Hanumant Jagganath Nazirkar v. State of Maharashtra

(b) Court:

• Bombay High Court (Criminal Appellate Jurisdiction)

(c) Bench:

• Justice M.S. Sonak & Justice Jitendra Jain

(d) Date of Decision:

• 27 June 2025

Key Facts

The petitioner, a 58-year-old retired person, was arrested in connection with a cheating and forgery case involving Rs. 3,37,30,000/-. On 25 October 2024, he was taken into custody from Shivajinagar Metro Station at 1:00 PM. He was then transported to Baramati Police Station, arriving at 5:07 PM. From 7:40 PM on 25 October to 9:00 PM on 26 October, he underwent "pre-arrest medical examination". He was formally arrested at 9:00 PM on 26 October 2024. Finally produced before the Magistrate on 27 October 2024 at 12:20 PM

Legal Issues

The main question was whether the petitioner's arrest violated the 24-hour rule under:

• Article 22(2) of the Constitution of India
• Section 57 of the Code of Criminal Procedure, 1973

Court's Analysis & Reasoning

Definition of "Arrest"

The court established that "arrest" means:

• Restraint of a person's liberty
• Begins when a person is taken into custody, not when formally recorded
• Complete when restraint by authority commences
• The phrase "ताब्यात" (custody) in police records indicates arrest

Key Legal Principles

• 24-hour rule computation starts from actual custody, not formal arrest
• Only journey time from place of arrest to court can be excluded from 24-hour calculation
• Pre-arrest medical examination time cannot be excluded - no statutory provision supports this
• Medical examination under Sections 53-54 CrPC happens after arrest, not before

Court's Decision

The court held that:

• The petitioner was arrested on 25 October 2024 at 1:00 PM (or at least 5:07 PM)
• He was produced before the Magistrate after 47 hours 20 minutes
• This violated the constitutional mandate of production within 24 hours
• The arrest was therefore illegal

Petitioner to be released on PR Bond of Rs. 1,00,000 with conditional bail.

Key Takeaways

• Constitutional protection under Article 22(2) is absolute
• Custody begins when liberty is restrained, not when formally recorded
• Pre-arrest medical examination cannot justify detention beyond 24 hours
• Habeas Corpus remains available even if bail is rejected
• Police cannot use subterfuges to circumvent constitutional mandates