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CS Professional · Arbitration, Mediation and Conciliation · Arbitration: Introduction, Agreements and its Institutions

Under a contract, Arjun and Bhavna agreed to arbitrate disputes. Arjun dies before any dispute arises, and his son Karan, his legal representative, wishes to enforce the agreement against Bhavna. What is the effect of Arjun's death on the arbitration agreement?

The agreement is not discharged. Under section 40(1), death of a party does not end an arbitration agreement for either side, and it can be enforced by or against the deceased party's legal representative, here Karan.

  1. AIt is discharged as to Arjun but binds Bhavna alone
  2. BIt is discharged for both parties
  3. CIt is suspended until the court appoints a new party
  4. DIt is not discharged and is enforceable by or against the legal representativeCorrect

Explanation

Section 40(1) provides that an arbitration agreement is not discharged by the death of any party, as respects the deceased or any other party, and is enforceable by or against the legal representative. Option one wrongly treats it as discharged for the deceased.

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