Civil Procedure Code (CPC)

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varun Garg (no)     29 July 2021

Arbitrator Clause in agreement

Hello

In my service agreement company has mentioned that they can solely appoint an arbitrator for any dispute between employee and management.

I want to ask
1) Does this clause holds valid
2) Is an arbitrator must in such cases.

Thanks


 12 Replies

Advocate Bhartesh goyal (advocate)     30 July 2021

 ( 1 ) yes,it is perfectly valid.

 ( 2 ) yes, for speedy trial and decision ,it is must.

varun Garg (no)     30 July 2021

Wouldn't the company gets benefitted to such Arbitrator as they will appoint someone they know and who works ij their favor.

Thanks

Dr J C Vashista (Lawyer)     30 July 2021

Did you agree to the terms and conditions of subject service agreement ? If so, it is valid and enforceable, however, you can get the clause objected and removed from agreement.

In any case the employer shall appoint arbitrator (if required) of their choice who is bound to favour them.  

Raj Kumar Makkad   30 July 2021

M. Garg! You have already provided the facts of your matter vide which you have told that it is mwntioned in your service agreement ........

 

Once you have agreed upon the service agreement by puttinh your signature as a mark of acceptance, you cannot rise any objection after acceptance may the clause without having any opportunity to discuss whether the term of arbitrqtor is right or wrong.

 

The relevance of your questions was prior ro accepting the Service Contract.

varun Garg (no)     30 July 2021

Thankyou so much for guidance.

G.L.N. Prasad (Retired employee.)     30 July 2021

Arbitration is not ultimate and one can challenge the arbitration in Court if the employee is not satisfied.  Hence do not worry about such arbitration and submit written arguments also before Arbitrator and pray for reasoned decision.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     30 July 2021

The Hon'ble Supreme Court held that the person who has interest in the outcome of the decision of the dispute must not have the power to appoint a Sole Arbitrator.

varun Garg (no)     30 July 2021

My company can loose money and I can gain, does this states my company has interest in outcome of dispute.

P. Venu (Advocate)     31 July 2021

Such arbitration are more or less a common feature in many an agreement. Theoretically, the condition is binding, once the agreement is  signed. There is an element of unequal bargain inherent in such arbitral clauses. 

G.L.N. Prasad (Retired employee.)     31 July 2021

@Mr.Venu,  Sir, in employment agreements this arbitration clause is very rare and I have never heard of such arbitration.

varun Garg (no)     31 July 2021

The company has not exercised this clause yet, they have filled a response in labour court also.

 what are the chances of this clause to get exercised by the company now or later, is there any such law that post first reply by company or after 30 days of company not initiating arbitrator clause of when asked to resolve the isssue such clause can no longer be used by company?

P. Venu (Advocate)     31 July 2021

Originally posted by : varun Garg
The company has not exercised this clause yet, they have filled a response in labour court also.

 what are the chances of this clause to get exercised by the company now or later, is there any such law that post first reply by company or after 30 days of company not initiating arbitrator clause of when asked to resolve the isssue such clause can no longer be used by company?

Further posting, as above, only creates confusion in the absence of facts relating to the pending the court and how the arbitration clause is relevant in that proceeding.


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