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

Meera, an investor, opened a trading account with a stockbroker through an online platform. The account-opening terms were emailed to her, and she replied by email accepting them. The terms contained a clause referring all disputes with the broker to arbitration. Later the broker argues that there is no arbitration agreement because Meera never signed a paper document. Under the Arbitration and Conciliation Act, 1996, what is the position?

The agreement is valid. Under the Act, an arbitration agreement is in writing if it is contained in an exchange of communications, including electronic means, that provides a record of the agreement. Meera's emailed acceptance of the terms with the arbitration clause satisfies this, so a signed paper document is not required.

1. AThe agreement is valid, because an exchange of communications through electronic means that provides a record of the agreement is treated as being in writingCorrect
2. BThe agreement is invalid, because only a document signed by both parties can be an arbitration agreement
3. CThe agreement is valid only if it is registered with the stock exchange
4. DThe agreement is invalid, because arbitration clauses cannot be contained in a contract and must be separate agreements