Arbitration Agreement..

essential requirements
Meaning
The parties to a dispute, without approaching the court of law
may enter into an agreement to refer their matter/dispute to be
settled by a third person/s called arbitrator/arbitrators.Such
agreement is called Arbitration agreement.
Definition
According to Sec 2(1)b of the Arbitration and conciliation
Act,1996 Arbitration Agreement means an agreement referred
to in sec 7,which contains the ingredients of arbitration
agreement.
According to sec 7 ,chapter II part I of Arbitration and
conciliation Act ,1996
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.
Essential requirements as per the sec 7
1.An arbitration agreement must be in writing
a. An agreement is deemed to be in writing if it is contained
in
i. document signed by the parties
ii. an exchange of letters, telex, telegrams
iii. 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.

iv. a contract referring to an arbitration clause, provided

the contract is in writing and arbitration clause made
part of the contract
b. oral arbitration agreements will not be enforced(Gopal
chand Vs Madan Lal(1990)2 Arb.LR139).
c. The requirement for what constitutes a written arbitration
agreement varies between countries.In England, the
requirement for writing is found in s 5, Arbitration Act
1996 and is very broad.
d. The requirement for a written arbitration agreement is
also important when seeking to have a foreign or
international award recognised and enforced.

2. It must have all the essential elements of a valid contract:

a. The parties to arbitration agreement shall
capable of entering into agreement
mutually consented (ad lib) to agreement
enter into agreement for lawful consideration
b.
The terms of the agreement must be clear and
unambiguous.In a situation where foreign parties are involved
the national laws and other special requirements of must be
thoroughly examined to avoid the liability at a later stage
3 .The agreement must be to refer a dispute, present or
future, between the parties to the arbitration.If there is no
dispute, there can be no right to demand arbitration.
The dispute may relate to act of omission or commission.
In addition to the above, the courts laid down the essential
ingredients of an arbitration agreement as defined in Clause
2(1) (b) read with Section 7 as given below:
1.Arbitration

agreement - purpose and status

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It is important to determine whether the arbitration agreement

covers the full scope of the disputes between the parties..
2.Arbitration agreement - form and content
Arbitration agreements must comply with general contractual
requirements and should contain information essential to the
arbitration.Information required for the arbitration includes, for
example, the applicable law of the arbitration, confidentiality
and costs.

3.Arbitration agreement - doctrine of separability

An arbitration agreement is to be treated as separate from the
main agreement in which it is contained. This is known as the
doctrine of separability. As a consequence of the doctrine, an
arbitration agreement may still be valid, existent and effective,
even though the main agreement in which it is contained is
itself regarded as not. The Court of Appeal considered the
doctrine of separability in the Fiona Trust case.
4.Arbitration agreement - requirements of the New York
Convention 1958
The New York Convention on the Recognition and Enforcement
of Foreign Arbitral Awards requires an arbitration agreement to
be
in writing,
deal with existing or future disputes,
the disputes arise in respect of a defined legal relationship
between the parties, whether contractual or not and
the subject matter disputes capable of settlement by
arbitration.
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5 .Arbitration seat
The seat of arbitration must be provided for in the
arbitration agreement. The seat is the legal place of arbitration
and must be a country. It is important because it dictates:
a. the applicable procedural law for the arbitration
b. the national court that may assist or supervise the tribunal
during the arbitration
c. the national court that has jurisdiction to determine any
challenge or appeal of the arbitral award
d. the nationality of the award for the purposes of
recognition and enforcement
.
.