{"id":110109,"date":"2022-09-17T17:39:55","date_gmt":"2022-09-17T12:09:55","guid":{"rendered":"https:\/\/legalwindow.in\/?p=110109"},"modified":"2022-09-19T14:48:12","modified_gmt":"2022-09-19T09:18:12","slug":"enforcement-of-an-arbitration-agreement","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/enforcement-of-an-arbitration-agreement\/","title":{"rendered":"Enforcement of an Arbitration Agreement"},"content":{"rendered":"<p><span style=\"font-weight: 400;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-110113 size-full\" title=\"Enforcement of an Arbitration Agreement\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Enforcement-of-an-Arbitration-Agreement-1.png\" alt=\"Enforcement of an Arbitration Agreement\" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Enforcement-of-an-Arbitration-Agreement-1.png 1200w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Enforcement-of-an-Arbitration-Agreement-1-600x315.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Enforcement-of-an-Arbitration-Agreement-1-300x158.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Enforcement-of-an-Arbitration-Agreement-1-1024x538.png 1024w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Enforcement-of-an-Arbitration-Agreement-1-768x403.png 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/>Arbitration is a method of Alternative Dispute Resolution in which a third party, the arbitrator, is granted the ability to make final and legally binding decisions relating to issues. The parties opt for a private dispute resolution procedure outside of courts.<\/span><span style=\"font-weight: 400;\"> Settlement of disputes through a third person without having to take the matter before a court of law is called arbitration.<\/span><\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"border: 1px solid #555;\"><b>Table of Content:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#look\"><span style=\"font-weight: 400;\">Quick look<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#of\"><span style=\"font-weight: 400;\">History of Arbitration<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#and\"><span style=\"font-weight: 400;\">Meaning and Concept of Arbitration Agreement<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Essentials\"><span style=\"font-weight: 400;\">Essentials of Arbitration Agreement<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#in\"><span style=\"font-weight: 400;\">Common Elements included in the Arbitration Agreement<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Provisions\"><span style=\"font-weight: 400;\">Provisions of Arbitration Agreement<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Conclusion\"><span style=\"font-weight: 400;\">Conclusion<\/span><\/a><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 id=\"look\"><b>Quick Look<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">In recent years arbitration has grown worldwide. Because of the underlying principles of self-governance and confidentiality, it has succeeded as a dispute resolution mechanism. Arbitration is a method of alternative dispute resolution in which a third party, the arbitrator, is granted the ability to make final and legally binding decisions relating to the matter. The parties decide on a private dispute resolution procedure outside of the courts.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Settlement of disputes through a third person without having to take the matter before a court of law is called arbitration.<\/span> <span style=\"font-weight: 400;\">The arbitration agreement is a binding procedure that is to be followed by both the parties as well as the arbitral tribunal in its decision-making. One of its principles which is confidentiality attracts the dispute resolution process to the parties.<\/span><\/p>\n<h2 id=\"of\"><b>History of Arbitration<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The history dates back to the year 1899 when The <a href=\"https:\/\/en.wikipedia.org\/wiki\/Legislative_council\" target=\"_blank\" rel=\"noopener\">Legislative Council<\/a> enacted the Indian Arbitration Act. It was based on the model of the English Act of 1899. The Act was confined to the three princely states which were Bombay, Madras, and Calcutta. But later on, under section 89 of the Civil Procedure Code, 1902 arbitration was mentioned.\u00a0 Due to a lack of procedural modalities, it then got its independent statute which is when the Arbitration Act, of 1940 came into force and applied to the whole of India. Now, this method is governed by The <\/span><span style=\"font-weight: 400;\">Arbitration and Conciliation Act, of 1966<\/span><span style=\"font-weight: 400;\">. The Act saves the parties from the hustle and struggle of spending years and years in the Courts and a lot of time and money is saved, which otherwise would have been a lot to invest. Arbitration is a quasi-judicial process and the parties are referred to a domestic tribunal.\u00a0<\/span><\/p>\n<h2 id=\"and\"><b>Meaning and Concept of Arbitration Agreement<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Arbitration in very layman&#8217;s language means that the dispute between the parties would get referred to a third neutral party who will solve the dispute. The parties decide on a private dispute resolution procedure outside of the courts. The third-party solving the dispute is known as the Arbitrator. The decisions taken by the arbitrator would be binding on the parties. This method is governed by The Arbitration and Conciliation Act, of 1966.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">An arbitration Agreement is formed when two parties enter into a contract that states that any dispute that arises between the two parties who have entered into this contract then it should be solved outside the courtroom with the assistance of the third party which is mutually decided or appointed by both the parties, who will be the neutral person in this case and will be called the arbitrator. The decisions by the arbitrator would be final and binding and should be followed by both parties.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The arbitrator should be mentioned in the contract made by the parties. It should also be stated who would select the arbitrator, regarding this kind of dispute and the arbitrator should also give the decision on the place where the arbitration will take place. Also, they should also state the other kinds of procedures mentioned or what has to be required during an arbitration agreement.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The agreement has to be signed by both parties. These agreements are like contingent contracts, which means that these agreements shall only come into force or become enforceable if any dispute happens, and on the basis of the same dispute between two parties mentioned in the contract. It also takes place or is enforceable in light of any dispute that arises between the parties to the contract.\u00a0<\/span><\/p>\n<h2 id=\"Essentials\"><b>Essentials of Arbitration Agreement<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Following are the essentials of the Arbitration Agreement:<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">The agreement would valid only if the dispute arises between the said parties.<\/span> <span style=\"font-weight: 400;\">The presence of a dispute in between the parties is an essential condition for the contract to be valid. When the parties have already settled the dispute, in no case, they can invoke the arbitration clause to refute the settlement.<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Also, another important essential is that the arbitration agreement must be in writing. An agreement will be considered written when it is signed by both parties also can be the exchange of letters, telegram or for that matter any other communication medium that can be shown in record and should be evident that the agreement has been agreed by both parties.<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">The third essential is the intention of the parties while signing the agreement. This is one of the most important essentials of the arbitration agreement which is what and how was the intention of both the parties while signing the agreement.<\/span> <span style=\"font-weight: 400;\">The intention must show that both parties have agreed to come to the terms with the Arbitration Agreement.<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">The fourth essential is the signature. Both parties should sign the agreement after going through the agreement and accepting the terms and conditions of the agreement.<\/span><\/li>\n<\/ul>\n<h2 id=\"in\"><b>Common Elements included in the Arbitration Agreement<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Some common elements included in the Arbitration Agreement are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Place of Arbitration:<\/b> <span style=\"font-weight: 400;\">This clause states that there will be a place of arbitration in the case of a dispute. This clause is important, especially in the case of international commercial arbitration, as this seat helps in determining the procedural laws that govern the procedure of the arbitration. However, the seat of the arbitration does not have to be in the same place as the hearing of the proceedings. It is the place where the arbitration takes place, even though it differs from the place of the hearings.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Appointment of Arbitrator: <\/b><span style=\"font-weight: 400;\">The arbitrator is appointed mutually by both parties and the decision of the arbitrator should be final and binding and accepted by both parties.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Language:<\/b><span style=\"font-weight: 400;\"> the language in which the agreement is made should be understandable to both parties. There should be no communication gap between the arbitrator and the parties.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>A number of arbitrators:<\/b><span style=\"font-weight: 400;\"> The number of arbitrators should be odd in number. The reason behind this is that the decision can be made even if there is a disagreement between each other.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Kind of Arbitration:<\/b><span style=\"font-weight: 400;\"> The parties have to choose between the institutional and the\u00a0ad hoc\u00a0kind of arbitration. Institutional means that the parties agree to be bound by the rules of the arbitration institutions and ad hoc means when the parties mutually agree to arrange an arbitrator.\u00a0<\/span><\/li>\n<\/ul>\n<h2 id=\"Provisions\"><b>Provisions under Arbitration and Conciliation Act, 1966 in relation to Arbitration Agreement<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Following are the provisions under Arbitration and Conciliation Act, 1966 in relation to Arbitration Agreement:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Section 7(4) of the Arbitration and Conciliation Act states that the agreement should be in written form.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Section 11 of the Arbitration and Conciliation Act states that the arbitrator can be appointed at the mutual decision of the parties to the contract. In case, where the parties fail to decide the appointment of the arbitrator, the Chief Justice of the High Court is approached.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Section 34 of the Arbitration and Conciliation Act states that the award given by the arbitrator is final and is binding upon the parties who have signed the contract. Once the decree is granted by the court, it shall be enforceable with respect to section 34 of the Act.\u00a0<\/span><\/li>\n<\/ul>\n<h2 id=\"Conclusion\"><b><a href=\"https:\/\/legalwindow.in\/shareholders-agreement\/\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-110112 size-full\" title=\"Free shareholders agreement sample in PDF\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Get-Shareholders-Agreement-from-Expert..png\" alt=\"Free shareholders agreement sample in PDF\" width=\"1000\" height=\"200\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-Shareholders-Agreement-from-Expert..png 1000w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-Shareholders-Agreement-from-Expert.-600x120.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-Shareholders-Agreement-from-Expert.-300x60.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-Shareholders-Agreement-from-Expert.-768x154.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a>Conclusion<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Arbitration as an alternative to dispute is the much-recognized practice of affording an opportunity to the aggrieved party to exhaust the appeal remedy against the decision of the lower forum. An arbitration agreement is not only beneficial to the parties but also in means of the time and efforts put in by each of the parties in the <a href=\"https:\/\/legalwindow.in\/partnership\/\" target=\"_blank\" rel=\"noopener\">partnership<\/a>. Despite a few people stating that it is not a complete procedural aspect of dealing with the cases, one states that it does help both the parties who have faced the dispute.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, most importantly, it is important that there are certain things that have to be kept in one\u2019s mind before actually drafting or while drafting a contract for the arbitration agreement. In practice though, almost all arbitration agreements are concluded with arbitration clauses.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Arbitration is a method of Alternative Dispute Resolution in which a third party, the arbitrator, is granted the ability to make final and legally binding decisions relating to&hellip;<\/p>\n","protected":false},"author":3,"featured_media":110111,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-110109","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-agreement-drafting"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Enforcement of an Arbitration Agreement &#187; Legal Window<\/title>\n<meta name=\"description\" content=\"This article is all about the Enforcement of an Arbitration Agreement, Common Elements &amp; 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