Arbitration Agreement Section 7 Notes

The existence of a dispute is an essential condition of arbitration. Once the parties have effectively resolved their disputes, they cannot rebut the settlement and invoke an arbitration clause. (2) An arbitration agreement may take the form of an arbitration clause in a contract or in the form of a separate agreement. An analysis of the above-mentioned judgments suggests that the High Courts have generously interpreted the term “statement of claim and defence” as including the exchange of communications and responses between the parties in accordance with the liberal and correct interpretation of the Supreme Court of India in S.N. Prasad v. Monnet Finance Ltd.35, which was discussed. In fact, the Delhi High Court in G. Kapoor43 and the Karnataka High Court in Shyamraju47 refer explicitly to the Supreme Court`s decision in Monnet Finance.35 Although Monnet Finance35, which does not contain an exhaustive definition of the words “statement of claim and defence” in section 7(4)(c) of the Arbitration Act, advocates a liberal and expansive interpretation of the words “statement of claim and defence” in section 7(4)(c) of the Arbitration Act. Apart from this, no other aspect appears to have been considered by the Karnataka High Court and the Delhi High Court, while it considers that an exchange of communications and responses will result in the formation of an “arbitration agreement” under Section 7(4)(c) of the Arbitration Act.

Subsection 16(2) of the Arbitration Act clearly provides that the objection that the arbitral tribunal does not have jurisdiction must be raised no later than in the defence. Thus, if a party is aggrieved by the absence of an arbitration agreement but does not take this allegation into account in its defence, it is deemed to have waived its right under Article 16(2) in conjunction with Article 4 of the Arbitration Act. Paragraph 4 of the Arbitration Act provides that a party has waived its right if it does not object to non-compliance with a provision different from the Arbitration Act. Arbitration Act. Therefore, Article 16, paragraph 2, of the Arbitration Rules already deals with scenarios in which the arbitration agreement would exist in the claim and is not challenged by the other party in its application “before” the arbitral tribunal. Therefore, in order to take effect under Article 7(4)(c) of the Arbitration Act, it must be interpreted as covering scenarios in which the exchange of claim and defence took place `not before` the arbitral tribunal. Otherwise, section 7(4)(c) and section 16(2) of the Arbitration Act will apply in the same area, abusing section 7(4)(c) of the Arbitration Act. The Arbitration and Conciliation Act, 1996 (“the Act”) is the law governing arbitration in India.

Section 7 of the Act defines an “arbitration agreement” as an agreement between the parties to submit to arbitration any dispute that has arisen or may arise between them in connection with a defined legal relationship.3 In addition, subsection 7(3) of the Act requires that an arbitration agreement be “in writing”. By law, an arbitration agreement is deemed to be in writing if (a) it is contained in a document signed by the parties;4 (b) an exchange of letters, telex, telegram or other means of telecommunication that provides a record of the agreement;5 (c) an exchange of notice of claim and defence in which the existence of the agreement is claimed by one party and not contested by the other;6 or (d) a contract between the parties; which refers to another document containing an arbitration clause stipulating that the arbitration clause of that other document must be incorporated into the contract.7 The parties must sign the arbitration agreement and the decision is binding on the parties. If you are a party to the Contract and wish to resolve disputes with the assistance of an arbitrator without going to court, you must enter into this Agreement. Prior to the enactment of section 7 of the Act, there was no provision in Indian law comparable to that section. The Arbitration Act was enacted to consolidate and amend the Arbitration Act in India taking into account the Model Law of the United Nations Commission on International Trade Law (“UNCITRAL Model Law”).8 Thus, article 7 of the Arbitration Act reflects article 7 of the UNCITRAL Model Law of 1985.9 Therefore, the reports setting out the historical context of the formulation of the UNCITRAL Model Law are as follows: for the interpretation of paragraph 7(4)(c) of the Arbitration Rules. Indeed, the Supreme Court of India has recently considered the provisions of the UNCITRAL Model Law to interpret the provisions of the Arbitration Act.10 It should be noted that the reports of the ad hoc committees prior to promulgation may be examined to interpret the meaning of an ambiguous and unclear law, or to assess the context, which led to the adoption of paragraph 11 31Id, paragraphs 34 to 35; Settlement of commercial disputes: preparation of a model written provision for the arbitration agreement, A/CN.9/WGII/WP.136, para. 10; Report on the work on arbitration at its forty-fourth session (A/CN.9/592), paragraph 68. The formation of an arbitration agreement takes place when two parties enter into a contract and the contract stipulates that all disputes arising between the parties must be resolved without going to court with the help of a person who would be a neutral person, a third party appointed by both parties, known as an arbitrator who would act as a judge. The arbitrator so appointed should have been mentioned in advance in the contract concluded by him.

You also need to specify who should choose the arbitrator, in terms of the type of dispute on which the arbitrator should make decisions, the place where the arbitration would take place. In addition, they should also indicate the other types of procedures mentioned or required under an arbitration agreement. The amendment to Article 7 is gradual and now considers the agreement concluded electronically as a written agreement. The jurisdiction of the arbitral tribunal results from the agreement between the parties.1 Therefore, the existence of the arbitration agreement between the parties is an indispensable condition for reference to disputes between the parties to the arbitration.2 8. (1) In this Part, the term “arbitration agreement” means an agreement between the parties, all disputes or specific disputes that have arisen between them in connection with a defined contractual relationship are or may be the subject of arbitration. An arbitration agreement is a type of agreement that must be entered into in accordance with the provisions of the Indian Contracts Act. For the existence of an agreement, there is an “ad idem consensus”, which means that the parties to the agreement must agree on the same point and that they must also agree in the same direction. Similarly, the parties must have the intention and willingness to submit the dispute to arbitration, which is reflected in the terms and conditions set out in the agreement. There are essential elements of section 7, some of which are: 22 Report of the Working Group on International Commercial Arbitration of its third session (A/CN.9/216), paragraph 24 (in this context, the question has been raised as to whether a party who has appeared before an arbitral tribunal without challenging jurisdiction may subsequently invoke the absence of a written arbitration agreement. It was considered that, in those circumstances, such a party could not rely on the absence of a written agreement.

However, it was agreed that the issue should be dealt with in the Model Law, as it was an issue that could be adequately addressed under national law. » Treaty on International Trade: Analytical commentary on the draft text of a model law on international commercial arbitration (A/CN.9/264), paragraphs 6 to 8. Section 7 of the Arbitration and Conciliation Act 1996 deals with arbitration agreements and their components. It also makes the agreement in writing compulsory. It must be signed by both parties. The arbitration agreement is essentially an agreement entered into by the parties to resolve their disputes through arbitration. The agreement may also be concluded at the time when the parties enter into a contract for the settlement of future disputes in the context of arbitration. One of the reasons for this is that the parties attach great importance to their reputation, which could be affected by the court process. It was also suggested that the phrase “exchange of a statement of claim and defence in which the existence of an agreement is alleged by one party and not contested by the other” should be deleted from article 7 of the UNCITRAL Model Law because (i) the words “statement of claim and defence” were misleading because the earlier phase of the arbitration referred to the existence of an arbitration agreement, It`s. at the time of arbitration; and (ii) the subject matter was already covered by article 4 in conjunction with article 16(2) of the UNCITRAL Model Law on Arbitration and no further provision was required.30 Article 4 of the UNCITRAL Model Law provides that a party has waived its right to object to non-compliance with a different provision if it does not object to such non-compliance and initiates arbitration. Article 16, paragraph 2, of the UNCITRAL Model Law provides that any objection to the jurisdiction of the arbitral tribunal shall be raised no earlier than the proceedings and no later than the filing of the defence. .