Agreement for reference of dispute to Arbitrator by parties on mutual consent under Section 7 of Arbitration and Reconciliation Act.

Format of agreement to refer dispute for arbitration by parties with mutual consent.

A dispute can be referred to Arbitrator by mutual consent of the parties. Agreement under section 7 of Arbitration and Reconciliation Act can be signed by the parties. The parties can decide who will be the Arbitrator and can also appoint them as per section 7 of the Act. The decision of Arbitrator is bound to all the parties.

Sample Format of Agreement to refer a dispute for Arbitration by parties with mutual consent.

AGREEMENT

This Agreement made at ____ on this __ day of _______ between Mr. X __________ son of ___________ aged ___________ Resident of _________________________of the ONE PART

AND

Mrs. Y daughter of ___________ aged ___________ Resident of _______________of the OTHER PART

Whereas Mr. X and Mrs. Y are full brother and sister and

Whereas the father of both X & Y died Intestate, on or about the _____day of ____leaving some moveable property in the shape of ornaments, Bank accounts, investment and one immovable property, and

Whereas disputes have arisen between the parties regarding their rights to and shares in the said property and also regarding partition of the said property, and

Whereas parties have agreed to refer all the disputes regarding their claims to the said property including the question of partition thereof, according to their respective rights to two arbitrators viz. Mr. M and Mr. N. the former being appointed by Mr. X and the latter by Mrs. Y. and

Whereas the parties have agreed to enter into this agreement for reference to arbitration of the said disputes and claims to the two arbitrators in the manner following.

Now It 1s Agreed Between the Parties Hereto As Follows:

1. The parties hereto refer all their disputes and claims regarding the properties left by their father the late Mr ___________ including the question of their respective shares and including effecting partition of the said properties and all other questions incidental thereto to the arbitration of the said two Arbitrators Mr. _______________M and Mr. N.

2. The said Arbitrators shall, before entering upon the reference appoint an Umpire.

3. The Arbitrators shall direct the parties to file their respective inventories of the properties left by the said deceased. as per their respective contentions.

4. The said Arbitrators shall allow the parties to file their respective claims and contentions and to file documents relied upon by them within such reasonable time as the Arbitrators may direct.

5. The said Arbitrators shall give hearing to the parties either personally or through their respective Advocates but the Arbitrators will not be bound to take any oral evidence including cross examination of any party or person.

6. The said Arbitrators shall make their Award within a period of four months from the date of service of a signed copy of this Agreement on them by any of the parties hereto provided that the Arbitrators will have power to extend the said period from time to time with the consent of both the parties.

7. The Arbitrators will not make any Interim Award.

8. The Arbitrators will have full power to award or not to award payment of such costs
of and Incidental to this arbitration by one party to the other as they may think fit.

9. Subject to the provisions of the Arbitration Act 1940 the award will be binding on the
parties hereto.

10. The Arbitration shall subject to what is herein provided, be governed by the provisions of the Arbitration Act. In Witness Whereof the parties have put their respective hands the day and year first hereinabove written.

X ___________________

In the presence of Witnesses
1.

Y ___________________

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.