UNICTRAL model Law and essential Arbitration Agreement

The present Act is based on model law drafted by United Nations Commission on International Trade Laws (UNICTRAL), both on domestic arbitration as well as international commercial arbitration, to provide uniformity and certainty to both categories of cases.

Certain matters which are not arbitrable are:
1. Suits for divorce or restitution of conjugal rights
2. Taxation
3. Non-payment of admitted liability
4. Criminal matters

Arbitration (The Arbitrator Decides):
Arbitration is a dispute resolution process where the opposing parties select or appoint an individual called an Arbitrator. Upon appointment, the Arbitrator will arrange the process to hear and consider the evidence, review arguments and afterwards will publish an award in which the items of dispute are decided. In some cases the Arbitrator can conduct the arbitration on documents evidence only. When published the Arbitrator’s decisions are final and binding on the parties. It is rare for an arbitration to be appealed to the courts. Arbitration may compromise a sole Arbitrator, or may be a panel of Arbitrators.

The essential of Arbitration Agreement are:
1. It must be in Writing (Section 7(3)) : Like the old law, the new law also requires the arbitration agreement to be in writing. It also provides in section 7(4) that an exchange of letters, telex, telegrams, or other means of telecommunication can also provide a record of such an agreement. It is not necessary that such written agreement should be signed by parties. No particular form of formal document is necessary. 

2. It must have all the essentials of a valid contract : An arbitration agreement stands on the same footing as any other agreement. Every person capable of entering into a contract may be a party to an arbitration agreement. The terms of the agreement must be definite and certain; if the terms are vague it is bad for
indefiniteness.

3. The agreement must be to refer a dispute, present or future, between the parties to arbitration: If there is no dispute, there can be no right to demand arbitration. A dispute means an assertion of a right by one party and repudiation thereof by another. A point as to which there is no dispute cannot be referred to arbitration. The dispute may relate to an act of commission or omission, for example with holding a certificate to which a person is entitled or refusal to register a transfer of shares. Under the present law, certain disputes such as matrimonial disputes, criminal prosecution, questions relating to guardianship, question about validity of a will etc. are treated as not suitable for arbitration.

4. An arbitration agreement maybe in the form of an arbitration clause in a contract or in the form of a separate agreement (Section 7(2)).

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