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Arbitration and Insurance

We undertake matters involving arbitration with respect to corporate sector such as preperation and settlement of Arbitration Deeds and also in the appointment of mutually agreable Arbitrators and in further proceedings. We have been rendering services in finalizing insurance claims and in effectively conducting litigation relating to corporate insurance.

The Arbitration and Conciliation Act,1996, came into force on and from 16 August 1996.  Section 2(1)(b) of the Act defines arbitration agreement o mean an agreement referred to in section 7 of the Act.  Chapter II of the Act deals with arbitration agreements.

Arbitration Agreement

Section 7 of the Act defines arbitration agreement to mean an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. Section 7(2) provides that an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.  In particular, section 7(3) mandatorily provides that an arbitration agreement shall be in writing.

According to section 7(4),an arbitration agreement is in writing, if it is contained in –

      1. a document signed by the parties;
      2. an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement;  or
      3. an exchange of statements of claim and defense in which the existence of the agreement is alleged by one party and no denied by the other.

It is further stipulated in section 7(5) that the reference in a contract to document containing an arbitration clause, constitutes an arbitration agreement, if the contract is in writing and the reference is such as to make that arbitration clause as part of the contract.  Therefore, the emphasis under the Arbitration and Conciliation Act, 1996, is clearly and unambiguously on an arbitration agreement in writing as the basis for invoking the proceedings for arbitration and/or conciliation.

The expression ‘arbitration agreement as defined in section 2(a) of the Arbitration Act,1940 (which has since been repealed by the Arbitration and Conciliation Act,
1996) had been defined earlier to mean a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not. Therefore, in the absence of a written agreement between the parties, the nature of the dispute as well as the terms of reference to the arbitrator(s) cannot be determined and, hence the agreement in writing, have been narrated in section 7(4) and the instances given therein are illustrative and cannot be regarded as exhaustive.
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