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October 13th, 2021

Validity Of Arbitration Agreement In India

This article examines the applicability of asymmetric arbitration clauses agreed between demanding parties in a number of key jurisdictions. The claimant argued that the signature of the guarantee was not its own, which means that there is no valid arbitration agreement between the parties and that, therefore, it is the courts of Singapore, and not the tribunal already constituted, which have jurisdiction to determine the existence of the arbitration agreement. Subsequently, in accordance with the report of the 246th Legal Committee, section 11(6A) of the Arbitration & Conciliation Act 1996 was inserted in order to limit the courts to the examination of the arbitration agreement, while dealing with the issue of the appointment of an arbitrator. However, there has been no discussion of the issue of the cachet of such an arbitration agreement. Morison J. found that the clause called into question “better” rights for shipowners, but refused to suspend the arbitration. However, in Law Debenture Trust Corp v. Elektrim Finance BV & Ors [2005] EWHC 1412 (Ch), Mann J considered an asymmetrical clause providing for arbitration but giving one of the parties the opportunity to sue. In this case, the request for suspension of arbitration was accepted, with the right to request arbitration subject to the agreed procedural option.

These cases show that the English courts will use the dispute settlement method chosen by the parties, whether asymmetrical or not. The Arbitration and Conciliation Act is silent on multi-party arbitrations. However, Indian courts have recognized multi-party agreements. The Supreme Court of India (“Supreme Court”) has considered the issue of the severability and survival of an arbitration clause contained in a Memorandum of Understanding (“MoU”) in the case of Ashapura Mine-Chem Ltd (“Plaintiff”). The Supreme Court held that the arbitration agreement was valid to the extent that it was a stand-alone agreement independent of its underlying contract. . . .

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