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CS Professional · Arbitration, Mediation and Conciliation · Arbitration under Investors' Grievances Redressal Mechanism of Stock Exchanges

Investor Mohan and broker Kapoor Securities agreed to arbitrate disputes. Mohan dies while a dispute is pending, and the broker contends that the arbitration agreement is discharged and the arbitrator's mandate has ended. Which is correct?

The agreement survives. Death of a party does not discharge an arbitration agreement; it is enforceable by or against the legal representative. The arbitrator's mandate also does not end merely because the appointing party died, so the proceedings continue.

  1. AThe agreement is discharged as to Mohan but continues against the broker
  2. BThe agreement is discharged for both parties and fresh consent is needed
  3. CThe agreement is not discharged and is enforceable by or against Mohan's legal representative, and the arbitrator's mandate is not terminated by the death of the party who appointed himCorrect
  4. DThe agreement continues but the arbitrator's mandate ends because Mohan appointed him

Explanation

An arbitration agreement is not discharged by the death of any party, as respects the deceased or other party, and is enforceable by or against the legal representative. The mandate of an arbitrator is not terminated by the death of the party who appointed him. The broker's contention fails on both points. Option D contradicts the mandate rule.

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