The SC, in its decision dated September 14, 2018, in Zheijang Bonly Elevator Guide Rail Manufacture Co. Ltd. v. Jade Elevator Component[1] has upheld the validity of optional arbitration clauses i.e. dispute resolution clauses which present parties with a choice to resolve disputes between them either through arbitration or through litigation in court. The SChas held that where parties have agreed to such an optional clause, and one party invokes arbitration, the dispute shall be referred to arbitration and not litigation. This decision alters the previously settled position of law that a court shall refer parties to arbitration only if there is a clear and unequivocal intention of parties to arbitrate disputes arising out of a contract.

[1] 2018 (9) SCC 774.