Validity of Arbitration clause
Querist :
Anonymous
(Querist) 29 January 2010
This query is : Resolved
After termination of agreement is Arbitration clause still valid
Ie Agreement signed in oct 2000,
valid for 3 years IE till SEp 2003.
after which agreement was not renewed.
though transaction carried out.
Transaction is also not of the period of agreement
NOw One party has filed a claim for arbitration after 6 years.
So Even after termination of agreement in 2003 is Arbitration clause still valid
Union of India vs. Kishorilal Gupta & Bros., 1960 (1) SCR 493.
Termination of an agreement arbitration clause would also cease to be operative
Learned Attorney General submitted that, as to when on termination of an agreement, arbitration clause would also cease to be operative, has been well explained by a three- Judge Bench of this Court in Union of India vs. Kishorilal Gupta & Bros., 1960 (1) SCR 493. In that case Subba Rao, J., as he then was, speaking for the majority stated at pages 513 to 514 of the report that the discussion of the law on the subject led to the emergence of the following principles in this regard :
"(1) An arbitration clause is a collateral term of a contract as
distinguished from its substantive terms; but nonetheless it is an integral part of it;
(2) however comprehensive an
arbitration clause may be, the existence of the contract is a necessary condition for its operation, it perishes with the contract;
So Even after termination of agreement in 2003 is Arbitration clause still valid
R.R. KRISHNAA
(Expert) 29 January 2010
Yes. Sometimes even after the termination of the contract/agreement the arbitration clause will survive and is valid.
Devajyoti Barman
(Expert) 30 January 2010
A party can take refuse of the arbitration clause if it refers to the dispute when the agreement itself was existing.
Guest
(Expert) 30 January 2010
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