WHETHER UNSTAMPED ARBITRATION AGREEMENT IS EXECUTABLE? THE CONCEPT OF SEPARABILITY OF THE ARBITRATION CLAUSE/AGREEMENT FROM THE UNDERLYING CONTRACT
Here we will discuss the following issues: (i) Whether an arbitration agreement contained in an unregistered (but compulsorily registrable) instrument is valid and enforceable? (ii) Whether an arbitration agreement in an unregistered instrument which is not duly stamped, is valid and enforceable? (iii) Whether there is an arbitration agreement between the parties and whether an Arbitrator should be appointed? What is an Arbitration Agreement? Its provided in Section 7 of the Arbitration Act, 1996. It reads as under: Arbitration agreement.—(1) In this Part, “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. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) 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) exchange of letters, telex, telegrams or other means of telecommunication 1 [including communication through electronic means] 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. (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. Section 17 of Registration Act provides for compulsory Registration: https://indiankanoon.org/doc/561156/ ( click on the link for detailed provision.) Section 49 of the said Act lays down the effect of the non-registration of documents. https://indiankanoon.org/doc/1768154/ ( click on the link for detailed provision.) Section 49 makes it clear that a document which is compulsorily registrable, if not registered, will not affect the immovable property comprised therein in any manner. It will also not be received as evidence of any transaction affecting such property, except for two limited purposes. First is as evidence of a contract in a suit for specific performance. The second is as evidence of any collateral transaction which by itself is not required to be effected by a registered instrument. A collateral transaction is not the transaction affecting the immovable property, but a transaction which is incidentally connected with that transaction. The question is whether a provision for arbitration in an unregistered document (which is compulsorily registrable) is a collateral transaction, in respect of which such unregistered document can be received as evidence under the proviso to section 49 of the Registration Act. English Law Views on distinct identity and separation of Arbitration Clause: Lord Wright in his opinion stated that: “An arbitration agreement is a collateral to the substantial stipulations of the contract. It is merely procedural and ancillary, it is a mode of settling disputes, though the agreement to do so is itself subject to the discretion of the court.” Lord MacMillan in his opinion stated that “It survives for the purpose of measuring the claims […]Read more
UNDER INDIAN LAW ONLY SIGNATORIES TO THE AGREEMENT INVARIABLY PROPER PARTIES TO THE ARBITRATION AGREEMENT? DOES INTERNATIONAL PRINCIPLES OF “GROUP OF COMPANIES” APPLY TO INDIAN ARBITRATION ?
Provisions of Law discussed: Now let us first see what does Act mean by an Agreement and what is format of an Arbitration Agreement? Arbitration Act,1996 7 Arbitration agreement. — (1) In this Part, “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. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) 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. PARITIES TO ARBITRATION: 8.Power to refer parties to arbitration where there is an arbitration agreement.—1 [(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 to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.] (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: 2 [Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.] (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. PART II ENFORCEMENT OF CERTAIN FOREIGN AWARDS CHAPTER I New York Convention Awards Power of judicial authority to refer parties to arbitration.—Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908),a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in section 44, shall, at the request of one […]Read more
International courts are formed by treaties between nations or under the authority of an international organization such as the United Nations and include ad hoc tribunals and permanent institutions but exclude any courts arising purely under national authority. What is International Court of Justice (ICJ ) ? The International Court of Justice (ICJ) is the principal judicial organ of the United Nations (UN). It was established in June 1945 by the Charter of the United Nations and it commenced its functions April 1946. For India this year is very important as it was preparing to Draft its Constitution and formed Constituent Assembly in December,1946. The seat of the Court is at the Peace Palace in The Hague (Netherlands). Out of the six principal organs of the United Nations, it is the only one not located in New York (United States of America). Early examples of international courts include the Nuremberg and Tokyo tribunals established in the aftermath of World War II. Two such courts are presently located at The Hague in the Netherlands are “the International Court of Justice (ICJ)” , and “the International Criminal Court (ICC)”. Further international courts exist elsewhere, usually with their jurisdiction restricted to a particular country or issue, such as the one dealing with the genocide in Rwanda. In addition to international tribunals created to address crimes committed during genocides and civil war, ad hoc courts combining international and domestic strategies have also been established on a situational basis. Examples of these “hybrid tribunals” are found in Sierra Leone, Lebanon, East Timor, and Cambodia. Role of ICJ: The Court’s role is to settle legal disputes submitted to it by States and to give advisory opinions on legal questions referred to it by authorized United Nations organs and specialized agencies as per provisions of its law. Composition of ICJ: The Court is composed of 15 judges, who are elected for terms of office of nine years by the United Nations General Assembly and the Security Council. It is assisted by a Registry, its administrative organ. Its official languages are English and French. List of international courts Name Scope Years active Subject matter African Court of Justice Africa 2009–present Interpretation of AU treaties African Court on Human and Peoples’ Rights Africa 2006–present Human rights Appellate Body of the World Trade Organization Global 1995–present Trade disputes within the WTO Benelux Court of Justice Benelux 1975–present Trade disputes within Benelux Caribbean Court of Justice Caribbean 2005–present General disputes COMESA Court of Justice Africa 1998–present Trade disputes within COMESA Common Court of Justice and Arbitration of the OHADA Africa 1998–present Interpretation of OHADA treaties and uniform laws Court of Justice of the Andean Community South America 1983–present Trade disputes within CAN Court of the Eurasian Economic Union Former USSR 2015–present Economic disputes and interpretation of treaties within the EAEU East African Courts of Justice Africa 2001–present Interpretation of EAC treaties Eastern Carrabian Supreme Court Caribbean 1967–present General disputes Economic Court of the Commonwealth of Independent States Former USSR 1994–present Economic disputes and interpretation of treaties within the CIS ECOWAS Community Court of Justice Africa 1996–present Interpretation of ECOWAS treaties European […]Read more