Al Phoenic, 46-54 Battersea Bridge Road, London, SW11 3AG

Fine Lebanese Cuisine

Al Phoenic

Arbitration Clause in an Agreement in India

Thus, an arbitration agreement may be express or implied. However, the scope of tacit acceptance of an arbitration agreement should be determined on the basis of the facts of the case in order to interpret whether the parties have tacitly consented to the arbitration in the manner set out in subsection 7(4) of the Act. The Arbitration Act does not specify any specific requirements for a valid multiparty arbitration agreement. The requirements for individual arbitration agreements set out in § 7 of the Arbitration Act also apply to arbitration agreements concluded with several parties. Therefore, the agreement is invalid and the respondent`s request for arbitration was dismissed on the grounds of reciprocity between the parties and a fair and bilateral opportunity for their appeal. Furthermore, the delhi Supreme Court`s decision that such a clause amounts to an agreement to restrict judicial proceedings in the Lucent case is unfounded. The right to arbitrate is only a contractual right that can be divided in an unbalanced manner between the parties as long as the parties consent to it. In any event, the unbalanced distribution of this right leaves no party without recourse in the event of a breach, since the right to bring a claim before a domestic court is not affected. Secondly, on procedural justice. This is where the required “prior knowledge and consent” established by the Calcutta High Court and contemporary English courts is important.

This means that, in such cases, no general presumption of procedural unfairness can be made – rather, the court must consider this on a case-by-case basis. Thus, for procedural reasons, a unilateral arbitration clause would be repealed only if it can be demonstrated that there is a flagrant difference in the treatment of bargaining power which affected the approval of the clause in that particular case. See Central Inland Water Transport Corporation v. Brojo Nath Ganguly, 1986 SCR (2) 278 for an analysis of the unscrupulous procedural nature of contracts under Indian law. However, as long as both parties actually accept the clause, it should be applied. Is it reasonable to initiate arbitration without reaction? Presumably, the party who wishes to take legal action will have to declare his hand when he receives the notice of arbitration? He cannot be allowed to wait for his time. The Arbitration Act does not provide for the pooling of arbitration procedures. However, parties have often turned to the courts or filed arbitration requests to be consolidated. In such cases, the courts will seek to determine the true nature of the trade agreement between the parties in order to reveal the intention to bind a non-signatory who is bound by the actions of a signatory. In Cheran Properties Ltd v. Kasturi and Sons Ltd (2018) 16 SCC 413, the tribunal applied the class doctrine when the circumstances indicate that the intention of the arbitration agreement was to bind both signatories and non-signatories. The author considers that the one-way arbitration clause and its enforceability are a problem in India if there were no specific interpretation on the part of the SC.

However, the judgments of the High Courts have completely opposite views. It is true that the SC did not render a specific judgment on this subject, but its interpretation of the appointment of the arbitrator by a single party, which may be biased in the attribution of the arbitral award given its relationship and positions with the company appointing it. The SC`s interpretation of subsection 12(5) in conjunction with the Seventh Schedule to the CBA puts the party in a better position than before with less bargaining power. The author also believes that the main reason for arbitration of a legal dispute is to save time and money. But if the arbitration clause is not formulated in a way that does not serve its true purpose, then the very existence of this clause makes no sense. It is therefore necessary to ensure that the arbitration clause of each agreement is hermetic, clear, precise and simple, leaving no loophole that ultimately leads to its resolution in court through litigation. In general, disputes that can be decided by a civil court and that concern in personam rights may be submitted to arbitration. In Rickitt Benckinser (India) Private Limited v. Raynders Label Printing India Private Limited and Another (2019) 7 SCC 62, the Supreme Court discussed the non-binding nature of an arbitration agreement on non-signatories when ruling on an application for the appointment of arbitrators under Article 11. In particular, the Court held that the intention of a non-signatory to accept the agreement is essential and that the burden of proof lies with the party claiming that the non-signatory is bound by the agreement.

As this burden was not alleviated in this case, the Court concluded that the non-signatory could not be subject to the proposed arbitration. The Supreme Court, in its recent decision avitel Post Studioz Ltd v. HSBC PI Holdings of 19 August 2020 (resulting from Civil Appeal No. 5145 of 2016), established the criteria for establishing “serious allegations of fraud” that cannot be resolved. Following the reasoning set out in the Swiss Timing decision, the tribunal noted that earlier decisions should have taken into account a combined interpretation of Sections 5, 8 and 16 of the Arbitration Act, which provides for an approach whereby “where an arbitration clause is demonstrated to a judicial authority in an agreement, it is mandatory for the authority to refer the parties to arbitration, taking into account that the arbitration clause is an independent agreement. of the other terms and conditions of the contract and that, consequently, a decision of the arbitral tribunal declaring the contract null and void does not ipso jure entail the nullity of the arbitration clause”.` As regards the criteria for such a finding, the Court relied on the Ayyasamy decision, which laid down the following two criteria: 1. May take the form of an arbitration clause in a contract or in the form of a separate agreement; (c) an exchange of pleadings and defences alleging the existence of the agreement by one party and not contested by the other. However, the following issues are excluded from the reference to arbitration: The Honourable Delhi High Court (hereinafter referred to as DHC) has determined, in the light of the facts and evidence presented, that the arbitration clause referred to in the contract of the parties to the dispute is invalid, as it offers the possibility of applying this clause only to the company, that is, .dem defendant, while the petitioner does not have the right to rely on it. Clause. The DHC relied on the calcutta Supreme Court`s decision in Union of India v. Rati Lal R.

Taunk. The DHC rejected this arbitration clause mainly because of the lack of reciprocity. In the case of Shri Vimal Kishor & Ors v. Jayesh Dinesh Shah & Ors, rendered on August 17, 2016, the Supreme Court ruled that cases arising from a trust deed cannot be arbitrated. The principles set forth in the judgment form the basis of any valid arbitration agreement. According to the law, an arbitration agreement, unlike a signed agreement, can also be included in: A one-way arbitration clause is a dispute settlement clause that grants a special right to choose a particular dispute settlement mechanism, that is, it offers the possibility of resorting to arbitration or litigation. Although the meaning of claims and defense statements has not been interpreted strictly to refer only to those filed in arbitration under section 7(4)(c) of the Act, it remains to be seen how it will be interpreted in future cases, particularly for legal opinions. In the present case, Contracting Parties A and B have now also agreed on a denunciation and arbitration clause as a dispute settlement mechanism. This clearly means that if the employee has been dismissed for certain reasons that he deems inappropriate and that he wants to challenge legally. However, the contract states that the parties to the dispute can rely on arbitration to resolve the issue in question and that the company`s human resources department is the sole responsibility of the arbitrator. In which cases can third parties or non-signatories be bound by an arbitration agreement? In the case of such arbitrations covered by the New York Convention, the court may refuse to refer a dispute covered by the arbitration agreement only if it concludes that the arbitration agreement may be void, ineffective or unenforced, and not on the ground that allegations of fraud or misrepresentation must be investigated as part of the resolution of disputes between the parties.

The main purpose of an arbitration clause is to represent the joint agreement of the parties to resolve disputes arising from their contractual relationship through arbitration. However, one-way arbitration clauses serve this primary purpose, while giving only one party the right to initiate arbitration. .

You might be interested in …