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

Under a written contract with a valid arbitration clause covering all disputes, Rohan Engineering and Tapi Infra have a dispute. Before arbitration starts, Rohan, an individual proprietor, dies. Tapi Infra says the arbitration agreement has ended. What is the position under the Act?

The arbitration agreement is not discharged. Section 40(1) says death of a party does not discharge it for the deceased or any other party, and it is enforceable by or against the legal representative, so Rohan's representative can proceed or be proceeded against.

  1. AThe agreement is discharged as respects the deceased but binds Tapi Infra
  2. BThe agreement is discharged for both parties
  3. CThe agreement is not discharged and is enforceable by or against Rohan's legal representativeCorrect
  4. DThe agreement survives only if Tapi Infra consents to continue

Explanation

Section 40(1) states that 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. Tapi's contention therefore fails.

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