Arbitration Agreement Not to Be Discharged by Death of Party Thereof

Arbitration Agreement Not To Be Discharged By Death Of Party Thereof: An Overview

Arbitration is an alternative dispute resolution method that allows parties to resolve their legal disputes outside of court. It is a confidential and less costly process, which makes it an attractive option for businesses and individuals alike.

However, what happens when a party involved in an arbitration agreement dies? Does the agreement come to an end? The answer is no. In most cases, arbitration agreements are not discharged by the death of a party.

The rule is based on the principle that an arbitration agreement is a contract between the parties involved. It is a separate and distinct agreement from the underlying contract or dispute that the parties are seeking to resolve. As such, the agreement itself is not affected by the death of one of the parties.

This means that even if one of the parties dies, the remaining parties can continue with the arbitration process. The estate of the deceased party is then considered a party to the agreement, and the arbitrator can make a decision that will bind the estate.

Of course, there are some exceptions to this rule. For example, if the arbitration agreement specifically states that it is terminated upon the death of a party, then the agreement will be discharged upon the death of that party. This is not common, however, and most agreements do not contain such a provision.

Another exception is when the arbitration agreement is tied to a personal service contract. In this case, the death of a party may affect the ability to perform the underlying contract, which may then terminate the arbitration agreement as well.

It`s also worth noting that the death of a party may affect the ability to enforce an arbitration award. For example, if the award is against the deceased party, then there may be no way to collect the amount awarded. However, this is not a reflection of the arbitration agreement itself but rather the practicalities of enforcing the award.

In summary, an arbitration agreement is typically not discharged by the death of a party. The remaining parties can still continue with the arbitration process, and the estate of the deceased party is considered a party to the agreement. Exceptions to this rule are rare and usually arise when the arbitration agreement is tied to a personal service contract.