2. INTRODUCTION
“It is a good and fair settlement, when neither
party likes the outcome, but agree to it”.
There is a trend world over, in particular among
companies and corporate not to drag disputes
into long drawn courtroom battles. There comes
the significance of arbitration, mediation,
conciliation and such ADR mechanism. Hence is
the added advantages of saving in time as well
as the cost of proceedings. Moreover the parties
settle the matter in a win-win spirit.
3. DEFINITION
Arbitration agreement is defined as an agreement
to submit present or future dispute to arbitration.
This generic concept comprises two basic type :
a. A clause in a contract, by which the parties to a
contract undertake to submit to arbitration the
disputes that may arise in relation to that
contract (arbitration clause); or
b. An agreement by which the parties to a dispute
that has already arisen submit the dispute to
arbitration (submission agreement).
4. The Model Law defines the arbitration agreement as:
article 7.1
“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” .
According to the New York Convention:
article II.1
“Each Contracting State shall recognize an agreement in
writing under which the parties undertake to submit to
arbitration all or any differences which have arisen or
which may arise between them in respect of a defined
legal relationship, whether contractua1 or not,
concerning a subject matter capable of settlement by
arbitration” .
5. According to Section 7of Arbitration Conciliation Act, 1996 the
features of Arbitration Agreement are :
1. An arbitration agreement may be in the form of an
arbitration clause in a contract or in the form of a separate
agreement.
2. An arbitration agreement shall be in writing.
3. 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 defense in which
the existence of the agreement is alleged by one party and
not denied by the other.
4. 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.
6. THE LAW APPLICABLE TO
ARBITRATION AGREEMENT
The law applicable to the arbitration agreement is defined as
the law governing the questions relating to the formation,
validity, enforcement and termination of the arbitration
agreement.
There are different criteria for determining the law applicable
to the arbitration agreement. We shall focus on the most
common ones:
• The law chosen by the parties
• The law applicable to the contract
• The procedural law applicable to the arbitration
• The law of the place of the arbitration
• The Model law
• The New York convention
7. REQUIREMENTS FOR THE
ARBITRATION AGREEMENT
1) It must arise out of mutual consent.
2) The parties must have legal capacity.
3) The agreement must be made in writing.
4) It must arise out of a defined legal
relationship.
5) The subject matter must be arbitral.
8. KINDS OF ARBITRATION
AGREEMANT
ARBITRATION CLAUSE
• Future disputes.
• Short and broad.
• Provided clause in
the main contract.
SUBMISSION AGREEMENT
• Disputes which have
already arisen
• Detailed and
specific setting out
the exact dispute.
• After dispute arisen.
9. Section. 8 of arbitration conciliation
act 1996
Power to refer parties to arbitration where there is an
arbitration agreement -
1. A judicial authority before which an action is brought in a matter which is
the subject of an arbitration agreement shall, if a party so applies not later
than when submitting his first statement on the substance of the dispute,
refer the parties to arbitration.
2. The application referred to in sub‐section (1) shall not be entertained
unless it is accompanied by the original arbitration agreement or a duly
certified copy thereof.
3. Notwithstanding that an application has been made under sub‐section (1)
and that the issue is pending before the judicial authority, an arbitration
may be commenced or continued and an arbitral award made.
10. SECTION. 9 OF ARBITRATION
CONCILIATION ACT 1996
Interim Measures by Court : A party may, before or during arbitral
proceedings or at any time after the making of the arbitral award
but before it is enforced in accordance with Section 36, apply to a
Court –
1. For the appointment of a guardian for a minor or a person
of unsound mind for the purposes of arbitral proceedings;
or
2. For an interim measure of protection in respect of any of
the following matters, namely :
a. the preservation, interim custody or sale of any goods
which are subject‐matter of the arbitration agreement;
b. securing the amount in dispute in the arbitration;
11. c. The detention, preservation or inspection of any
properly or thing which is the subject matter of the
dispute in arbitration, or as to which any question
may arise therein and authorizing for any of the
aforesaid purposes any person to enter upon any
land or building in the possession of any party, or
authorizing any samples to be taken or any
observation to be made, or experiment to be tried,
which may be necessary or expedient for the
purpose of obtaining full information or evidence;
d. Interim injunction or the appointment of a receiver;
e. Such other interim measure of protection as may
appear to the Court to be just and convenient and
the court shall have the same power for making
orders as it has for the purpose of, and in relation to,
any proceedings before it
12. TERMINATION OF ARBITRATION
AGREEMANT
Termination of arbitration agreement by
mutual consent
other grounds for termination of the
arbitration agreement:
1. Although the death of one of the parties is not generally
considered a ground for termination of the agreement, it is
expressly provided for under some laws.
2. The death of the arbitrators is not normally a ground for
terminating the arbitration agreement, either. Some laws set forth
otherwise when the parties regard the intervention of a specific
arbitrator as a condition for the arbitration.
13. CONCLUSION
It is said that when two great powers disagree
about anything it doesn’t matter what they
must find a way to settle it somehow by
arbitration or by negotiation, not by war or
threat of war.
All the wars follies very expensive and very
mischievous ones. In my opinion there never
was a good war or a bad peace when will
mankind be convinced and agree to settle their
difficulties by arbitration ?