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CS Professional · Arbitration, Mediation and Conciliation · Conceptual Framework of International Commercial Arbitration

Zenith Textiles Pvt Ltd (incorporated in India) signed a supply contract with Rhine Fabrics GmbH (incorporated in Germany). The contract was signed by both parties and contains a clause: 'All disputes shall be referred to arbitration.' Rhine Fabrics later argues that no valid arbitration agreement exists because the clause is only one line in a larger contract. Is the arbitration agreement valid in form?

The agreement is valid in form. An arbitration agreement may be a clause within a contract, and it satisfies the writing requirement because it sits in a document signed by both parties. No separate document, named arbitrator or registration is required.

  1. ANo, an arbitration agreement must always be a separate document apart from the main contract
  2. BNo, a clause in a contract is valid only if it names the arbitrator
  3. CYes, an arbitration agreement may be an arbitration clause in a contract, and it is in writing as it is in a document signed by the partiesCorrect
  4. DYes, but only if it is registered before a Court

Explanation

Section 7(2) says an arbitration agreement may take the form of a clause in a contract or a separate agreement. Section 7(4)(a) treats a document signed by the parties as writing. Naming the arbitrator or registration is not required, so the other options are wrong.

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