Essentials of Arbitration agreement

ARBITRAL AGREEMENT 

An Arbitral agreement is essential point in the law of Arbitration. The particular form of arbitral agreement is not provided under this Act. but there must be legal, valid and binding agreement between the parties. This Act specifically provided that arbitration agreement must be in the form of document and document must be signed by the parties yo operate as an arbitration agreement.

 Meaning of Arbitral agreement-

According to Sec.7(1) of arbitration & conciliation Act 1996 ,
"arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. 

 Essential features of an "arbitral agreement"

The essential features of an arbitration agreement, as defined by clause (b) of S.2(1) read with S. 7 , are as follows

1) Valid & binding Agreement -

There should be a valid and binding agreement between the parties.

2) Such agreement may be -

  in the form of an arbitration clause in a contract or in the form of a separate agreement.

3) Written Agreement -

An arbitration agreement shall be in writing.

4) An arbitration agreement is in writing if it is contained in—

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract 

 Who can enter into arbitration agreement ?

Every person who is competent to contract can enter into arbitration agreement. In case of partnership a partner can enter into on behalf of partnership into arbitration agreement.  The directors or other officers of the company may enter into an arbitration agreement.
A Karta of Hindu joint family can make a valid reference to the arbitration and where he acts Bonafide the award binds other members.

A) Minor and lunatics -

contract by minors and lunatics are void and therefore by themselves they cannot enter into valid agreement of arbitration. however they can enter into arbitration agreement with their natural or legal guardian's

B) Agent -

Agent recognised agent of a party can enter into an arbitration agreement on behalf of his principal.

C)   Manager of Hindu joint family-

A manager of Hindu joint family can refer the final dispute to arbitration. 

 

 

Case law -

1) Sadashiv Ramchandra Datar v. Trimbak Keshar AIR 1920 Bom 32.

In this case Bombay high Court held that if a minor is not properly represented and his guardians fails in this duty to protect his interest , the award is nor binding on minor.

2) Sunderlal  Haveliwala Vs. Bhagwati Devi AIR 1967 All 400

In this case of dispute among the partners inter se, if the deed  of partnership provides for Such disputes being referred to arbitration, a partner shall be entitled to make reference to arbitration.

Conclusion

every person who is competent to contract can enter into arbitration agreement. Minor and lunatics can enter into an arbitration agreement through their natural or legal guardian's . A manager of Hindu joint family can referred the family dispute to arbitration