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CS Professional · Arbitration, Mediation and Conciliation · Emerging Aspects: Fast Track and Virtual Arbitration

Pradeep, a party to a valid arbitration agreement with Kiran Estates Ltd, dies before any dispute is referred. Kiran Estates wishes to refer a dispute concerning the contract. Pradeep's son is his legal representative. Which statement is correct under the Act?

The agreement is not discharged. Under section 40(1), death of a party does not discharge an arbitration agreement as to the deceased or any other party, and it is enforceable by or against the legal representative, so no fresh agreement is needed.

  1. AThe agreement is discharged as to Pradeep but continues against Kiran Estates only
  2. BThe agreement is discharged for both parties and a civil suit must be filed
  3. CThe agreement continues but only if Pradeep's son signs a fresh agreement
  4. DThe agreement is not discharged and is enforceable by or against the legal representative of the deceasedCorrect

Explanation

Section 40(1) says an arbitration agreement is not discharged by the death of any party, either as respects the deceased or any other party, and is enforceable by or against the legal representative. Section 40(3) preserves only laws extinguishing a right of action on death, which is not shown here.

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