If the litigants wish to refer their disputes to an arbitral tribunal, it is important that they mention the name and address of the arbitration body in clear and unequivocal terms. Such errors may invalidate the compromise clause. The existence of litigation is an essential condition for arbitration. If the parties have effectively settled the dispute, they cannot refute the transaction and invoke a compromise clause. The Arbitration and Conciliation Act 1996 does not contain a specific section on separation. However, Indian law generally recognizes, through jurisprudence, the teaching of dissociability and the applicable compromise clause is too separable from the parent contract and, therefore, the singular clause may also constitute an agreement for itself. While informal arbitration in India has existed for many decades, arbitration under the provisions of the law is developing and is constantly in a state of change. Important decisions have been taken by the various courts, including the Supreme Court. A careful analysis of these decisions is a more telling story that india`s arbitration law has developed far beyond what might be expected. If the parties are to ensure timely and effective arbitration and deliberately stay away from unnecessary hearings in Indian courts, they should better listen to and listen to war stories in the countless convictions that are plentiful. Simply put, the parties must ensure that the arbitration agreement is clear and leaves no room for creative and ingenious interpretations. Their intention to resolve disputes through arbitration and how such arbitration should be implemented must undoubtedly pass. It should be remembered that the devil can be in the details and often.
Have you ever been in a situation where it is not clear whether you should bring proceedings before a court or invoke arbitration? Have you ever regretted not taking the time to read the compromise clause allegedly „boiler plate“ (which was probably taken up in your last agreement)? You`re not alone! There have been enough cases where parties have argued in lengthy hearings up to the Supreme Court of India („Supreme Court“), not on the flesh of the dispute between them, but on whether the right remedy is before a court or an arbitral tribunal. This is especially true in India, where legal proceedings can be lengthy. Why is this happening? After agreeing to refer disputes to arbitration, why is the arbitration agreement not „valid and binding“ for the parties? Why do political parties have to bear huge expenses and opportunity costs and accept unnecessary litigation? The answer lies in a carefully crafted arbitration agreement. The applicant argued that the court was not required to interpret the arbitration in accordance with Part 6 (2) of the IAA because the defendants did not have an application, since the applicant had never signed the arbitration agreement. This was an issue that could only be decided by the court after a full trial, applying the usual standard of civil proof, as if there were no arbitration agreement between the parties, no court could be formed to rule on the matter. The starting point of a dispute over an agreement containing a compromise clause is, of course, a total disregard for the reference of the dispute to an arbitration procedure, as agreed. This obvious omission of the parties to act as agreed generally means that the courts are required to appoint an arbitrator, as required by law.
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