Friday, December 21, 2012

What are Arbitration Agreement and Forms of Arbitration Agreement?

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.

Alteration of agreement:
In a case it was held that – An Arbitration Agreement being completed code by itself, terms and conditions of the same can not be unilaterally altered at which of any of the parties to it.

Oral Agreement:
Where the arbitration agreement – originally oral but subsequently confirmed in writing, in Habib Ind. V. Virak Co, 1957 Karachi, case it was held that there was written agreement between the parties for the submission of the matter to arbitration.

Forms of Arbitration Agreement:
An arbitration Agreement relating to contract between the parties shall be the basis of arbitral reference. Arbitration agreement may be in the form of arbitral clause incorporated in the contract or it may be separate agreement.
Under section 9 of the Arbitration Act, 2001 the definition of the arbitration agreement has been given in more clear terms and the scope of the arbitration agreement has been liberally enlarged.
According to this section, Arbitration Agreement includes -
Documents signed by the parties- sec. 9 (2) (a), Exchange of letters - sec. 9 (2) (b), Telex, Telegrams, Fax, Email or other means of communication containing the record of agreement.
In section 9 (2) (c) of this Act, it also further includes that exchange of statement of claim and defense in which the existence of the agreement is alleged by one party and not denied by the other party.

Case Reference:
In this it was held that provisions of section 9 (2) (b) are not applicable where an agreement to refer a dispute to arbitration was to effect that “each of the parties shall appoint an arbitrator, and with the consent of both the parties or with the consent of two arbitrators, a Surapanch shall be appointed who shall bring about a mutual settlement as in terms, the agreement does not fall within the purview of section 9 (2) (b).

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