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Agreement for Arbitration by members of HUF and to appoint Arbitrator to solve dispute.

Format of agreement to appoint arbitrators by members of Hindu Undivided Family.

Dispute between members of Hindu Undivided Family can be referred to Arbitrators by mutual consent of the Members. The members can decide who will represent them in the Arbitration and appoint the Arbitrator. Appointment of Arbitrator is governed by section 7 of The Arbitration and Reconciliation Act 1976. Relevant provision is also given here.

Sample Format of Agreement for Arbitration in HUF is given below.

 

AGREEMENT

This Agreement made at ____ on this __ day of _______ between:

1.  Mr. A __________ son of ___________ aged ___________ Resident of _________________________of hereinafter called the FIRST PARTY

AND

Mr. B Son of ___________ aged ___________ Resident of _______________of hereinafter called the SECOND PARTY

AND

Mr. C Son of ___________ aged ___________ Resident of _______________of hereinafter called the THIRD PARTY

AND

Mr. D Son of ___________ aged ___________ Resident of _______________of hereinafter called the FOURTH PARTY

AND

Mr. E Son of ___________ aged ___________ Resident of _______________of hereinafter called the FIFTH PARTY

Whereas the above parties are members if a Joint Hindu family and has joint assets and business. And

whereas differences have arisen among the parties in connection with their rights in assets and business.

And whereas the parties are not agreed in connection with division of assets and business.

And whereas parties have named also claim regarding acquiring of certain properties out of their personal resources, which are not to be divided.

And whereas parties have agreed to refer the matters to two arbitrators namely:

1. Mr. _____________ aged about ___ years s/o Mr. ____________ r/o _________________, and

2. Mr. ______________, aged  about ___ years s/o Mr. ________________, r/o _________________.

 

NOW THIS AGREEMENT WITNESSES AS UDNDER:-

1. That arbitrators shall decide the value of the joint family property and shall determine the division of the same among the members.

2. That the arbitrators shall determine the assets and shall determine the value of the goodwill of the business and shall distribute the same among the parties.

3. That the arbitrators shall divide the business and family property among the parties in the manner they decide.

4. That the arbitrators shall determine the share of unmarried daughter, which shall be given to 1st party for safe custody and give her after her marriage.

5. The arbitrate shall be entitled to award compensation in money form one party to another in order to equalize the share.

6. That the arbitrators shall be entitled to sell the property, which is not divisible and distribute the sale proceed among the parties.

7. The arbitrators shall also be entitled to partition any of the joint family property, build the structure or demolish any of them as they may think fit.

8. That the arbitrators, may issue notices in writing, mentioning the date and place of hearing, on which date the parties are bound to attend for providing evidences in connection with their claims.

9. That the arbitrators shall be entitled to appoint an accountant for accounting purposes, whose remuneration shall be included in the arbitrators fee, which they will charge.

10. That the arbitrators award shall be final and binding on all the parties, their successors, assignees and legal representatives.

11. If the arbitrators differ, they will appoint an umpire whose decision shall be find.

The above named and parties do hereby agree to all the terms and conditions mentioned above without any duress, coercion or undue influences and after fully understanding the terms and conditions of this deed of arbitration and bind ourselves, our heirs, assignees and legal representatives , and do hereby put our hands on this ___________, 20__ in the presence of the following witnesses:

A ___________________

Witnesses
1.

B ___________________

2.

C ___________________

 

D ___________________

 

E ___________________

 

Relevant Provisions in The Arbitration and Reconciliation Act 1986

 

Section 7. Arbitration agreement.

(1) In this Part, "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.

(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in-

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication including communication through electronic means which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

 

Section 10. Number of arbitrators.

(1) The parties are free to determine the number of arbitrators, provided that such number shall not be an even number.

(2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall consist of a sole arbitrator.

 

Section 11. Appointment of arbitrators.

(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.

(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.

(3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.

(4) If the appointment procedure in sub-section (3) applies and-

(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or

(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court;

(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Supreme Court or,

as the case may be, the High Court or any person or institution designated by such Court.

(6) Where, under an appointment procedure agreed upon by the parties,-

(a) a party fails to act as required under that procedure; or

(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or

(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.

(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.

(6B) The designation of any person or institution by the Supreme Court or, as the case may be, the High Court, for the purposes of this section shall not be regarded as a delegation of judicial power by the Supreme Court or the High Court.

(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to 3 the Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court is final and no appeal including Letters Patent Appeal shall lie against such decision.

(8) The Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court, before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of section 12, and have due regard to-

(a) any qualifications required for the arbitrator by the agreement of the parties; and

(b) the contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator.

(9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Supreme Court or the person or institution designated by that Court may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities.

(10) The Supreme Court or, as the case may be, the High Court, may make such scheme as the said Court may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or

sub-section (6), to it.

(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justices of different High Courts or their designates, different High Courts or their designates, the High Court or its designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request.

(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in an international commercial arbitration, the reference to the "Supreme Court or, as the case may be, the High Court" in those sub-sections shall be construed as a reference to the "Supreme Court"; and

(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in any other arbitration, the reference to "the Supreme Court or, as the case may be, the High Court" in those sub-sections shall be construed as a reference to the "High Court" within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate, and where the High Court itself is the Court referred to in that clause, to that High Court.

(13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the Supreme Court or the High Court or the person or institution designated by such Court, as the case may be, as expeditiously as possible and an endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.

(14) For the purpose of determination of the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal, the High Court may frame such rules as may be necessary, after taking into consideration the rates specified in the Fourth Schedule.

Explanation.-For the removal of doubts, it is hereby clarified that this sub-section shall not apply to international commercial arbitration and in arbitrations (other than international commercial arbitration) in case where parties have agreed for determination of fees as per the rules of an arbitral institution.



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