Supreme Court of India· 08 September 2026

Does a general reference to an earlier contract incorporate its arbitration clause into a later contract, unless the reference specifically identifies the clause?

NATIONAL SKILL DEVELOPMENT v. SURYA WIRES PRIVATE LIMITED & ORS

2026 INSC 977
Coram: Justice Pamidighantam Sri Narasimha · Justice Alok Aradhe

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Answer

A general reference to an earlier contract does not incorporate its arbitration clause into a later contract, unless the reference specifically identifies the clause.

No. A general reference to another contract does not, by itself, incorporate that contract's arbitration clause into the contract at hand under Section 7(5) of the Act; incorporation requires a specific reference to the arbitration clause itself, or, alternatively, a general reference to a standard form of terms and conditions, which suffices for that purpose. (¶17, 18)

Headnote

Arbitration and Conciliation Act, 1996 — s.7(5) — Incorporation by reference — Personal guarantee — Non-signatory — s.7(5) Arbitration and Conciliation Act, 1996 — General vs specific reference — Held: A general reference to an earlier contract does not incorporate its arbitration clause into a later contract, unless the reference specifically identifies the clause or is to a standard form of terms and conditions. (¶17, 18) s.7(5) — Composite transaction — Personal guarantee as Facility Agreement — Held further: A personal guarantee expressly defined as an integral part of a loan agreement cannot be severed, for dispute resolution alone, from the loan agreement's arbitration clause; the guarantor is bound to arbitrate. Appeal allowed. (¶25, 28, 29)

Headnote

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In the Court's own words

Paragraph 17Section 7(5) of the 1996 Act provides that a reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement, provided that the contract is in writing and the reference is such as to make the arbitration clause part of the contract. A two-Judge bench of this Court in M.R. Engineers (supra) after adverting to the relevant passages from Russell on Arbitration, 23rd Edition (2007) summarised the scope and intendment of Section 7(5) of the 1996 Act as follows:

Paragraph 18Another two-Judge Bench of this Court in Inox Wind Limited (supra) while reiterating the ratio laid down in M.R. Engineers (supra), held that general reference to an earlier contract does not suffice to incorporate an arbitration clause into a later contract, whereas a general reference to a standard form suffices for that purpose.

Acts & Sections

s.7(5) Arbitration and Conciliation Act, 1996s.16 Arbitration and Conciliation Act, 1996

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Also decided in this judgment

Can a personal guarantee expressly defined as an integral part of a loan agreement be severed from the loan agreement's arbitration clause for dispute resolution?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections