Is the agreement containing arbitration clause valid?

Advocate

Facts:

X has entered into a Loan cum Hypothecation agreement with Y (an unregistered finance company)  for purchase of a vehicle which is in the name of Z, it was agreed between X & Y, at the time of purchase that the vehicle would be transferred in the name of X within one month and Y would get it done. Y did not get the vehicle transferred in the name of X. X stopped paying the EMI's and filed a civil suit against Y. Y appeared and moved applicatin for refer the case for arbitration. The said agreement also contained an arbitration clause.

Query :      

1. Whether the agreement is valid, since the Y got the agreement signed of the vehicle by X, which is not in the name of X? Whether Y being an unregistered company, enter into any such agreement of financing? Is'nt the agreement in itself is void?

 
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ADVOCATE & DIRECTOR

IT IS VALID IF IT GOVERN BY A.ACT1996.

 
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Legal Consultant / Solicitor

Valid.

Including Arbitration clause is common nowadays

 
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Advocate

Arbitration clause is a usal clause incorporated in an agreement and is valid and binding on each other 

 
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advocate

Reference of the case to arbitration as per the Clause to that effect in the Agreement  is  covered by the provisions of the Arbitration & Conciliation Act.   

 
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Corporate Commercial & IP Lawyer

Yes ofcourse, Arbitration clause is valid.


For more details Contact

Nagaraj

Trademark Attorney & IP Lawyer

IP Lex Global Services

E-mail: nagaraja_bs@iplexglobal.in

 
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advocate

in the given case, the Indian Arbitration & Conciliation Act will apply.  

 
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Advocate

explain the relation of z with the parties.

also, clarify whether the company is not a registered one or its just like thta the company has not taken license for money lending. 

 
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Licensed from RBI or any other regulatory body towards financing does not really matter in case the arbitration clause that has been defined in the loan agreement has been suitably drafted...and it is a valid one and both the parties are bound by this..but always appear before the arbitrator nad try and explain him all the circumstances....

 
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