In short. Yes, a dispute can reach DIAC even if your contract never mentions it. Both sides can sign a submission agreement once the dispute has started. The Delhi High Court can appoint an arbitrator on an ad hoc clause and send the case to DIAC. Or a court can refer a pending suit there with everyone's consent. What you can't do is arbitrate with no written agreement at all. A submission agreement can be signed in days. A Section 11 order usually takes a few months. So start by finding out what you actually have in writing.
Is this your situation?
- You've just reread the contract. There's an arbitration clause, but it doesn't name DIAC or any centre at all.
- There's no arbitration clause anywhere, and you'd still rather not spend five years at Saket on a suit.
- The clause says their managing director picks the arbitrator. You don't fancy that.
- Your suit has been crawling along for two years, and at the last hearing both sides quietly said they'd consider arbitration.
- Everything you agreed sits in a purchase order footer, an email chain, or the terms printed on the back of an invoice.
- A DIAC notice has landed on your desk. You're fairly sure nobody in your company ever signed a DIAC clause.
- You're a small supplier with a Udyam certificate, and someone told you the MSME Council can push your case to an institution.
Can you get a DIAC reference without a clause in your contract?
Often, yes. Your original contract doesn't have to name DIAC. What DIAC needs is what every arbitration in India needs: a written agreement to arbitrate. And that agreement can come into being in more than one way. In practice, most DIAC cases without a DIAC clause arrive by one of three roads. The parties sign a fresh agreement after the dispute has arisen. Or the Delhi High Court passes an order under Section 11 of the Arbitration and Conciliation Act, 1996, appointing an arbitrator and sending the matter to DIAC. Or a court refers a pending suit, with both sides consenting.
The outer limit is just as firm. No written arbitration agreement of any kind, and the other side won't sign one? Then nobody can drag the dispute into DIAC. The Centre can't summon a party that never agreed to arbitrate. A court can't invent consent either. Your case then belongs in a civil or commercial court, and if it's a commercial dispute of Rs 3 lakh or more, you'll be dealing with the Commercial Courts Act, 2015 and its pre-institution mediation step.
We'll take each route in turn below, with what you need and where claimants and respondents tend to trip up. New to DIAC itself? Start with our plain guide to what DIAC is and how it works.
Why everything starts with written consent
Arbitration is private. It exists only because the parties picked it. Section 7 of the Act defines an arbitration agreement as an agreement to submit to arbitration disputes which have arisen or which may arise in respect of a defined legal relationship, contractual or not. Two bits of that definition carry most of the weight. 'Have arisen' tells you that you can agree to arbitrate a fight that's already started. The agreement doesn't have to come first. 'In writing' tells you it must be recorded somewhere, though Section 7(4) is fairly relaxed about the form.
So the real question isn't whether your contract mentions DIAC. It's whether a written arbitration agreement exists, and whether DIAC can administer the dispute under it (or be brought in). A clause that reads only 'disputes shall be referred to arbitration of a sole arbitrator, seat Delhi' is a perfectly good arbitration agreement. It just doesn't name an institution. The parties can fill that gap by agreeing. If they can't, the court fills it.
A clause naming some other institution is a different story. Say it names the India International Arbitration Centre, or a chamber of commerce. The parties chose that body, and a court will usually hold them to it. Shifting to DIAC then needs both sides on board.
Six ways a dispute ends up at DIAC with no DIAC clause
- You both sign a submission agreement after the dispute. It's a short document sending the existing dispute to arbitration under the DIAC Rules. It works whether your contract had an ad hoc clause or nothing at all.
- The High Court passes a Section 11 order on an ad hoc clause. The clause says arbitration, but you can't agree on who the arbitrator should be. The High Court appoints one, and in Delhi it often directs that the case run under the aegis of DIAC.
- The clause gives one side the power to appoint alone. That term can't stand. The court puts in a neutral arbitrator instead, quite often through DIAC.
- A pending suit is referred. Under Section 8 (if there's a clause) or Section 89 of the Code of Civil Procedure, 1908 (if everyone consents), the court can send the dispute to arbitration, DIAC included.
- The agreement turns out to be sitting in emails or incorporated terms. Sections 7(4)(b) and 7(5) can turn an email exchange, or a contract that pulls in general terms with an arbitration clause, into a written arbitration agreement.
- The other side takes part and never objects. Section 7(4)(c) treats an exchange of claim and defence, where one party alleges an arbitration agreement and the other doesn't deny it, as an agreement in writing.
What's a DIAC submission agreement, and what goes in it?
It's a short document both parties sign after the dispute has arisen, agreeing that the Delhi International Arbitration Centre will administer the arbitration under its rules. It doesn't matter if the original contract said nothing about arbitration. It also works where there was an ad hoc clause and both sides would rather have an institution run things. DIAC publishes a model format. Once it's signed, the claimant files a Request for Arbitration with the agreement attached, as our guide on how a DIAC arbitration is started explains step by step.
Put in the parties' full legal names and addresses. Identify the contract or the relationship. Describe the dispute widely enough to take in counter claims. State that DIAC will administer the arbitration under the DIAC (Arbitration Proceedings) Rules, 2023, and that fees will follow the DIAC (Administrative Costs and Arbitrators' Fees) Rules, 2018. Fix the seat (usually New Delhi), the number of arbitrators, the language and the governing law. It's sensible to record if you want the fast track procedure under Section 29B, or mediation first.
When Advocate B.K. Singh drafts one of these, most of his time goes on a single line. The description of the dispute. Write it narrowly, say 'the claim for unpaid invoices of March to June', and you're inviting trouble. The other side will later say its counter claim for defective goods falls outside the reference. Or that an invoice from July isn't covered. Tie the description to the whole contract, with claims and counter claims expressly included, and you won't face a Section 16 jurisdiction fight halfway through.
Check who's signing. A company's signatory should hold a board resolution or a power of attorney that covers agreeing to arbitration. For a partnership firm, look at the deed. If an officer without authority signs, that's an easy target later.
Section 11 DIAC references: when the court steps in
This is the road most clause-less DIAC cases actually take. The contract has an arbitration clause. The claimant sends a notice under Section 21 invoking it and suggesting an arbitrator. The other side ignores it, or says no. Under Section 11(5), if the parties haven't agreed within 30 days of a request, the court can appoint. Section 11(6) lets the court act too, where a party fails to follow the appointment procedure it agreed to.
If the seat is Delhi, the petition goes to the Delhi High Court. And the court's look at the case is narrow. After In re Interplay between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 (seven judges, 2023) and SBI General Insurance v. Krish Spinning (2024), the referral court checks only whether an arbitration agreement exists on a prima facie view. Limitation on the merits, arbitrability and the like are left for the arbitrator. The order usually appoints a sole arbitrator and directs that the arbitration run under DIAC's rules and aegis. Fees go by the DIAC schedule or the Fourth Schedule to the Act, whichever the order says.
Don't forget limitation for the petition itself. In BSNL v. Nortel Networks (2021), the Supreme Court held that the Limitation Act applies to Section 11 petitions, which ordinarily gives you three years from the failure or refusal to appoint. We've set out the whole process, notice to order, in our guide on Section 11 petitions that end in a DIAC reference. We won't repeat it here.
What if the clause lets one side pick the arbitrator?
You'll see this a lot in standard-form contracts. Government departments, PSUs, builders and lenders love it. The clause says the managing director, or some senior officer of their side, will appoint the arbitrator. That term doesn't work on its own any more. In TRF Ltd v. Energo Engineering Projects (2017) and Perkins Eastman Architects v. HSCC (India) (2019), the Supreme Court held that a person ineligible to act as arbitrator under Section 12(5) and the Seventh Schedule can't appoint one either, and that one party can't unilaterally appoint a sole arbitrator. Then in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (2024), a Constitution Bench held that unilateral appointment clauses offend the principle that parties must be treated equally.
The clause itself survives. Only the appointment term falls away. The claimant writes proposing a neutral arbitrator. If the other side digs in and insists on its own man, a Section 11 petition follows. In Delhi, the court will usually appoint someone independent and, very often, send the matter to DIAC. That's how a clause that never said DIAC ends up there.
Are you the side holding the appointment right? Then don't just appoint and carry on. An award by an arbitrator who was ineligible under Section 12(5) can be challenged. The ineligibility can be waived only by an express written agreement made after the dispute arose. Frankly, agreeing to DIAC early tends to cost you less.
Can a suit that's already pending be sent to DIAC?
Yes. There are two ways. The first applies where the contract has an arbitration clause and the defendant applies under Section 8 of the Act, no later than its first statement on the substance of the dispute, with the original agreement or a certified copy. The court then has to refer the parties to arbitration unless it finds, prima facie, that no valid arbitration agreement exists. If the clause is ad hoc, the parties can agree in court that DIAC will administer it, and the court will record that.
The second way applies when there's no clause at all, but both sides decide, mid-suit, that they'd rather arbitrate. Section 89 of the Code of Civil Procedure, 1908, read with Order X Rule 1A, lets the court refer a dispute to arbitration among other modes of settlement. In Afcons Infrastructure v. Cherian Varkey Construction (2010), the Supreme Court said a Section 89 reference to arbitration needs every party's consent. Once it's made, the case leaves the court and is governed by the Arbitration Act as if there were an arbitration agreement. In practice you file a joint statement or application that records the consent and names DIAC.
Two warnings. If you're the plaintiff in a commercial suit, think about the court fee you've paid and how far the case has got before you agree. Whether you get any court fee back on referral or settlement depends on the court fee law that applies, so check the current position. And if you're the defendant and you file a written statement on the merits without a Section 8 application, you may lose the right to insist on arbitration later.
Is there an arbitration agreement hiding in your emails or purchase orders?
It happens more than you'd think. A business is sure it has no arbitration clause, and it does. Section 7(4)(b) treats an exchange of letters or electronic communications that records the agreement as an agreement in writing. Suppose your quotation said 'disputes to be resolved by arbitration at DIAC, New Delhi' and the buyer accepted it by email. That may well be enough, even though nobody ever signed a formal contract.
Then there's Section 7(5), which deals with incorporation by reference. If a written contract refers to another document that contains an arbitration clause, and the reference makes that clause part of the contract, the clause binds. Common examples are purchase orders that say 'subject to our general terms and conditions', or work orders that pull in a tender document. The fight is usually over how specific the reference was. A loose mention of 'terms' is weaker. A pointed reference to the arbitration clause, or to the document holding it, is stronger.
Look hard at who the parties are, too. A clause signed by one group company doesn't automatically bind its sister company. In Cox and Kings v. SAP India (2023), a Constitution Bench of the Supreme Court accepted that non-signatories can be bound in some cases, depending on how the parties behaved and what they intended. But that's a question that turns on facts. We discuss broader arbitration questions of this kind, beyond DIAC, on our network site arbitrationlawyer.in, which covers arbitration generally.
Can joining a DIAC case without objecting create an agreement?
It can. Respondents walk into this one all the time. Under Section 7(4)(c), an exchange of statements of claim and defence, where one side alleges an arbitration agreement and the other doesn't deny it, counts as an arbitration agreement in writing. Section 16(2) says a plea that the tribunal lacks jurisdiction must be raised no later than the statement of defence. And Section 4 treats a party who carries on without objecting in time as having waived the objection.
So say a DIAC Request reaches you, based on a contract you're sure has no arbitration clause. Don't file a defence on the merits and stay silent on jurisdiction. Object straight away. Put it in your response to the Request and again in the statement of defence, and reserve your defence on the merits. Taking part to protect yourself, with a clear objection on record, isn't consent.
Whenever a client brings Advocate B.K. Singh a DIAC notice, he asks one thing first. Where's the written arbitration agreement this claim stands on? If it's a document the client never signed, or a set of terms nobody ever sent them, the objection goes into the very first reply. Some clients want to skip it, because they've a strong answer on the merits anyway. That's a mistake. Miss the deadline and the jurisdiction point may be gone for good.
Can the MSME Facilitation Council send your case to an institution?
It can. Under Section 18 of the MSMED Act, 2006, a registered micro or small supplier can take a delayed-payment dispute to the Micro and Small Enterprises Facilitation Council. The Council tries conciliation first. If that fails, Section 18(3) says the Council shall either take the dispute up for arbitration itself or refer it to an institution or centre that provides alternate dispute resolution services. That's a statutory road to institutional arbitration, and it doesn't depend on any clause in your contract. The Supreme Court held in Gujarat State Civil Supplies v. Mahakali Foods (2022) that Section 18 overrides a private arbitration clause.
Whether a given Council sends cases to DIAC or arbitrates them itself depends on how that Council runs. Ask the Council concerned. The MSMED (Amendment) Act, 2026 has also been published. Parts were reportedly brought into force from 15 October 2026, but we couldn't find the new Sections 18, 18A and 19 notified as of late October 2026, so check the current position before you rely on either version. Our guide comparing DIAC with the MSME Facilitation Council sets out which one usually suits a supplier better.
When DIAC simply isn't open to you
- There's nothing in writing at all. No clause, no email exchange recording one, no incorporated terms, and the other side won't sign a submission agreement. You're going to court.
- Your clause names some other institution. You both chose a different centre. Moving to DIAC needs both of you to agree.
- The seat is outside Delhi and the other side won't agree to DIAC. The High Court of the seat hears any Section 11 petition, and it may appoint an arbitrator without sending the case to DIAC.
- The dispute isn't arbitrable. Criminal offences, insolvency proceedings and certain rights against the world at large can't go to an arbitrator, whatever the parties sign.
- The person you want to claim against never signed. Unless the facts pull a non-signatory within the clause, you may need a separate suit against them.
- A statute gives some tribunal exclusive power. Certain bank recovery and insolvency matters are like this. Private arbitration can't take their place.
The provisions that decide whether DIAC is open to you
Section 7, Arbitration and Conciliation Act, 1996
Defines an arbitration agreement. It can cover disputes that have already arisen or may arise later. It must be in writing, which includes a signed document, letters or electronic messages that record it, or a claim and defence where one side alleges it and the other doesn't deny it (Section 7(4)). If a written contract refers to a document containing an arbitration clause, that clause can become part of the contract (Section 7(5)).
Sections 8 and 11 of the Act
Under Section 8, a court hearing a suit must send the parties to arbitration if a valid arbitration agreement exists and a party applies in time. Section 11 lets the High Court appoint an arbitrator when the parties can't agree, or when one of them doesn't follow the agreed procedure. In Delhi, the court often directs that the appointment run under DIAC.
Sections 4, 12(5) and 16 of the Act
Section 4 covers waiver of the right to object. Section 12(5), with the Seventh Schedule, makes certain people ineligible to be arbitrators. That also limits who can appoint. Section 16 lets the tribunal decide its own jurisdiction, and Section 16(2) says the objection has to come no later than the statement of defence.
Section 89 and Order X Rule 1A, Code of Civil Procedure, 1908
Let a court refer a pending dispute to arbitration, among other ways of settling it. Sending it to arbitration needs every party's consent (Afcons Infrastructure v. Cherian Varkey Construction, 2010).
Section 18(3), MSMED Act, 2006
If conciliation fails, the Facilitation Council either arbitrates itself or sends the dispute to an institution or centre offering alternate dispute resolution services. Check where the 2026 amendments stand.
How to take a dispute to DIAC when your contract has no DIAC clause
These steps are for the claimant. If you're the respondent, read the part above on objecting first.
Dig out every written term
Pull together the contract, purchase orders, quotations, acceptance emails, general terms and any tender papers. Read every one for an arbitration clause or a reference to one. If you find a clause, note down the seat, the institution and how the arbitrator is to be appointed.
Work out your limitation date
When did the money fall due, or the breach happen? Was there any written acknowledgment or part payment after that? If time's running short, send a notice invoking arbitration now. Under Section 21, the arbitration commences when the other side receives it.
Propose DIAC in writing
Write to the other side suggesting DIAC under its rules, and attach a draft submission agreement. If there's an ad hoc clause, fold this into your Section 21 notice and suggest a neutral arbitrator from the DIAC panel.
Sign the submission agreement if they agree
Settle the wording. Parties, the dispute (counter claims included), DIAC Rules, seat, number of arbitrators, language, fees. Check each signatory's authority. Then file a Request for Arbitration at DIAC with the agreement attached.
They refuse and there's a clause? File under Section 11
Wait 30 days from your request to appoint. Then file a Section 11 petition in the High Court of the seat and ask that the arbitration be run under DIAC. Annex the clause, the notice and proof it was delivered.
They refuse and there's no clause? Look at court
With no written agreement, arbitration's off the table. Weigh up a commercial suit, with Section 12A pre-institution mediation first, or a summary suit if your claim rests on invoices or a written contract.
Keep the date of every letter and the date it was delivered, all the way through. Limitation, the 30-day wait under Section 11 and the other side's objection deadline all hang on proof of receipt.
Routes to DIAC side by side: what you need, how long, what it costs
| Route | What you need | Usual time to reach DIAC | Costs (other than lawyers' fees) |
|---|---|---|---|
| Submission agreement | A written agreement both sides sign after the dispute | Days, or a few weeks if there's haggling | DIAC filing and administrative charges, then fee deposits under the 2018 rules; check the current schedule |
| Section 11 order on an ad hoc clause | A valid arbitration clause, a Section 21 notice, and 30 days with no agreement | Often a few months after the petition is filed | High Court court fee and filing costs, then DIAC charges and deposits |
| Section 11 order on a unilateral appointment clause | The clause, plus a notice objecting to one-sided appointment and naming a neutral arbitrator | Often a few months after filing | Same as above |
| Referral from a pending suit (Section 8) | An arbitration clause and an application before your first statement on the merits | Depends on the court's board; often one or two hearings | Court fee is already paid in the suit; refund rules differ, so check |
| Referral from a pending suit (Section 89 CPC) | Every party's consent, recorded before the court | Usually an early hearing once consent is given | Same as above, then DIAC charges and deposits |
| MSME Council referral (Section 18(3)) | A registered micro or small supplier, and conciliation that failed | Depends on the Council's list | The Council's procedure; the institution's charges if it refers |
Papers to gather before you propose DIAC
What you agreed
- The signed contract, with every annexure and amendment
- Purchase orders, work orders, quotations, and the emails accepting them
- Any general terms, tender documents or standard forms mentioned anywhere
What went wrong
- Invoices, running bills, the ledger and bank statements
- Every letter and email about the dispute, in date order
- Any legal notice, the reply, and proof of delivery
If you're signing a submission agreement
- Each party's full legal name, address and CIN or registration details
- A board resolution or power of attorney for every signatory
- What you've agreed on seat, number of arbitrators and language
If you're filing a Section 11 petition
- A copy of the arbitration clause
- Your Section 21 notice naming an arbitrator, with courier receipt and email proof
- Their reply, or a note that nothing came within 30 days
Which court decides whether the dispute can go to DIAC?
For a Section 11 petition, it's the High Court of the seat. If the clause names Delhi or New Delhi as the seat, that's the Delhi High Court, wherever the parties happen to be based. No seat named? Then it's less settled, and usually turns on where the cause of action arose and where the parties agreed hearings would happen. Take advice before you file. A clause seated in Gurugram points to the Punjab and Haryana High Court, and one seated in Noida to the Allahabad High Court. Either may appoint an arbitrator without directing that the case go to DIAC, unless the parties agree.
For a referral out of a pending suit, it's the court where the suit is pending. In Delhi, that means a district Commercial Court for commercial suits up to Rs 2 crore, or the Commercial Division of the Delhi High Court above that figure. There's been a proposal to raise the district limit, so check what it is today. In UP and Haryana, whichever court is designated as the district's Commercial Court hears these suits.
Once the arbitration's under way, the tribunal itself rules on objections to its jurisdiction under Section 16. That includes any argument that the submission agreement or the clause doesn't cover a particular claim. Court work after that, such as a Section 34 challenge, goes to the court with jurisdiction over the seat under Section 10 of the Commercial Courts Act, 2015 for commercial matters.
An invented example: two businesses with no clause pick DIAC
This one's made up. An Okhla printing firm has printed school textbooks for a Gurugram publisher for four years. It's all been purchase orders and invoices, with no arbitration clause anywhere. Then a print run goes wrong. The publisher says the pages were smudged. The printer claims Rs 38 lakh in unpaid invoices, and the publisher says it's owed Rs 11 lakh for reprinting. Both still want to work together next academic year. Neither wants a public fight at Saket.
Their lawyers settle on a DIAC submission agreement. It names both companies with their CIN numbers. It describes the dispute as all claims and counter claims arising out of print orders placed between April 2023 and March 2026. It adopts the DIAC Rules and fee rules, fixes New Delhi as the seat, provides for a sole arbitrator, and records that the parties will try DIAC mediation for 30 days first. Each signatory brings a board resolution.
Mediation doesn't work. So the printer files a Request for Arbitration with the agreement attached. Because the dispute is described across the whole period and covers both sides' claims, the publisher's counter claim is heard in the same case. No jurisdiction objection. Again, this is invented, and a real matter could go quite differently.
What to do this week
Pull out every written term that touches the relationship, from the signed contract down to the small print at the foot of a purchase order. Look for an arbitration clause, or any reference to one. Work out your limitation date. Found an ad hoc clause? Get a Section 21 notice ready that proposes DIAC and a neutral arbitrator. Found nothing? Decide whether to offer a submission agreement or prepare a commercial suit. Don't let time run out while you wait for them to reply.
If you're on the receiving end of a DIAC notice and never signed a DIAC clause, find the agreement the claimant is relying on. Then decide quickly whether to object under Section 16. Our page on our DIAC arbitration work explains how we act for both claimants and respondents in these cases. And if you'd like to avoid the whole question next time, read our guide on how to draft a DIAC arbitration clause.
Want your contract, emails and notices looked at to see whether DIAC is open to you? Or updates when the law on arbitration agreements shifts? You can reach Advocate B.K. Singh's team through our contact page.
Frequently asked questions
Can DIAC take a case if only one party wants arbitration?
No, not unless a written arbitration agreement binds the other party. DIAC can't force someone who never agreed. If there's a valid clause and the other side just won't cooperate, you go to the High Court under Section 11.
Does the Delhi High Court always send Section 11 cases to DIAC?
Not always. Often, though. The court can appoint an arbitrator to sit ad hoc, refer the matter to DIAC, or go with an institution the clause already names. The order tells you which, and how fees will be fixed.
Can we sign a submission agreement after a suit has been filed?
Yes. You can agree to arbitrate at any stage. The court records your consent and refers the matter under Section 89 of the CPC. The suit is then disposed of according to that referral, and the arbitration runs under the Act.
Is a WhatsApp message agreeing to arbitration enough?
It can be, if the messages clearly record an agreement to arbitrate the dispute. Section 7(4)(b) accepts electronic communications that provide a record of the agreement. Still, we'd get a proper signed agreement. It saves an argument later.
Can we go to DIAC after the limitation period has run out?
Agreeing to arbitrate won't revive a time-barred claim. The tribunal will apply the Limitation Act. A written acknowledgment of the debt made within the period can extend time under Section 18 of the Limitation Act. Check your dates before you rely on any route.
Does DIAC charge more when there was no DIAC clause?
No. Fees follow DIAC's fee rules and depend on the sum in dispute, however the case got there. If a court order fixes fees differently, say under the Fourth Schedule, the order decides the arbitrator's fee.
Can a foreign party agree to DIAC after the dispute arises?
Yes. A foreign party and an Indian party can sign a submission agreement choosing DIAC. Spell out the seat, governing law and language. Think about enforcing the award abroad before you sign.
They signed the submission agreement and now won't take part. What happens?
The arbitration goes on. The tribunal can proceed without a party that had notice, and the award will bind them. Deposits are still a headache, because DIAC may ask you to pay the defaulting side's share to keep your claim going.
Advocate B.K. Singh
Founder of B.K. Singh & Associates. MCA, LL.B., LL.M. More than twenty years in practice before the Supreme Court, the Delhi High Court, district and commercial courts in Delhi NCR, and tribunals.
This guide explains the law in general terms and is not legal advice. For advice on your own papers, contact the team.