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

Rohan, an investor, agreed in writing with his broker to refer disputes to arbitration. Rohan dies while a dispute is pending, and the broker contends the arbitration agreement is discharged. Under the Act, what is the position?

The arbitration agreement is not discharged by Rohan's death. It remains enforceable by or against his legal representative, both for the deceased and for the broker. The stock exchange's consent is not needed, and the dispute need not move to court.

  1. AThe agreement is discharged as to Rohan but continues against the broker
  2. BThe agreement is discharged for both parties, and the dispute must go to court
  3. CThe agreement continues and is enforceable by or against Rohan's legal representativeCorrect
  4. DThe agreement continues only if the stock exchange consents

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 laws extinguishing a right of action on death, but nothing here suggests that.

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