This Article discusses the role of signature in arbitration agreement and how
enormously it has validity in arbitration agreement. The Indian law in
arbitration deals under Arbitration and Conciliation Act, 1996
which has been
later amended in 2005'. Arbitration agreement is one the major and important
Document while performing or defining the legal relationship of parties while
contractual or not arbitration.
This paper will discuss comprehensively about validity
of signature and its usage. Does unsigned agreement bar to
unauthorized or invalid agreement or not? Or whether other factors or other way
can be considered as parties' intention.
This paper reviews to seek answer to
that question or till how much extent does it affect agreement it also refers to
the validity of signature in exchange letters, electronic arrangement,
telegrams, fax. The Part- I of this paper comprises with Introduction of
arbitration agreement and Part-II talks about the role
Signature in Arbitration agreement and finally Part- III wraps up with the case
law related to the Role of signature in arbitration agreement.
In India, the Arbitration and conciliation Act, 1996 later on amended in 2005
deals with the matter of arbitration agreement. Where it has been found that
of parties is requires to conduct arbitral proceedings and
sanction of consent is to be found in arbitration agreement but agreeing to it
is considered as final step where Signature is one source and confirmation of
it. This is the situation where non-signatories are founded to be in dilemma
or led to debate in the world.
Though this act talks about the signatures of
parties in section 7(4)(a) which is required. The signature is a form of
expressing consent in a good faith rather than wrong intention and it also gives
effect to the arbitration agreement and confers the intention of party. Thus, to
ensure the commitments of parties and if any reasonable consequences which may
arise are to be taken resolved by arbitral proceedings properly, has kept the
procedure of signatures which makes sure legitimacy envisaged which is not given
under any Act.
Well-drafted agreements contain signature authority section and proper clauses
by signing agreement parties are bound to follow the agreement clauses and its
rules as long as the sign is not forged or done fraudulently for example Any
business owner can put up with the arbitration agreement in business if any
consequences related to profit or supply are to be solved through arbitration
instead of litigation and in case of more serious business conflicts, it can be
put up with the mandatory arbitration clause.
Some analysis on arbitration
agreement on New York convention and Model Law which is based in UNICTRAL as per
Model Law discusses arbitration agreement defines as article 7.1-
As per Model Law agreement
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
As per New York convention agreement
Each Contracting states shall recognize an agreement in
writing under which the parties undertake to submit to arbitration all or
differences which have arisen or which may arise between them in respect of a
defined legal relationship, whether contractual or not, concerning a subject
matter capable of settlement by arbitration
The Model law and New York has a mandatory requirement in agreement to be duly
signed and stamped but it has debated that it creates conflicts in modern laws
which is a mere disadvantage in relation because modern laws do not concerned
signature as a validity clause or requirement which creates all the way
different scenario whereas compared to English arbitration clause which says
that in English Arbitration clause 1996
Later on as per article 2 which
talks about Electronic signature' which e-signature and is on trend these days
moreover e-agreements have become staple of e-world. E-signature is related to
data text or message which provides electronic signatory approval. The UNICTRAL
provision has widened the concept for the arbitration agreements in purposes of
signature' Though without signature it is slightly confusing or may be
impossible to prove the consent of parties.
Signature makes Document authenticate and effective
But as per law it is not necessary for parties to signed the arbitration
Agreement for instance a father made a Will for family and stated that further
disputes are to be resolved by the arbitration matters relating to joint family
and even if the sons are not signatories in that Will where award are to be
bound to be made upon it and father has a power to define as he desire to be and
sons are bound to it as per however clause incorporated in will.
Where two parties enter into a contract and made an arbitration agreement where
future disputes are to be resolve by arbitration but it was not signed by any
one of parties and sent it to other party who have signed now in future disputes
if respondent denies or refuse to appoint arbitrator on ground of absence of
signature then it will be rejected because valid arbitration agreement have been
already held and accepted too.
Now, in case arbitration agreement drafted vaguely or contains uncertainty and
not duly signed by parties so mere vagueness and non-clarity would not be
subject to take aid of section 11(5) for petitioner.
The section reads as-
Failing any agreement referred to in sub-section (2), in an arbitration with a
sole arbitrator, if the parties fail to agree on the arbitrator within thirty
days from receipt of a request by one party from the other party to so agree the
appointment shall be made, upon request of a party, by the Chief Justice or any
person or institution designated by him
For that matter it is essential to constitute the intention of parties for
adopting arbitration as a method of dispute resolving. Therefore, any party in
future dispute rely on absence of signature or makes it ground then it shall be
rejected. (trimex Int FZE ltd v Vedanta aluminium
In Arbitration and Conciliation Act 1940, it was not a clause or requirement of
signature for an effective arbitration agreement or it ought to have formatted
in agreement but in section 7 sub section 4 of arbitration agreement reads as:
An arbitration agreement is in writing if it is
- a document signed by the parties;
- an exchange of letters, telex, telegrams or other means of
telecommunication which provide a record of the agreement; or
- an exchange of statements of claim and defense in which the existence of
the agreement is alleged by one party and not denied by the other.
Therefore, a plain reading of this act indicates that provision of section 7 of
1996 of Act must be in writing which is to be in the form of arbitration clause
and may be contained a signature by parties.
Written and signature agreement in E-electronic contract
In world and trend of e-technology and internet the agreement has taken place in
form of electronic also and drastic change and development has brought major
changes in a way of work these days so as it has brought change in agreement
too, transaction now conducted by way of electronic means.
Technology, 2000 Act has given guidelines for all electronic transaction which
came into effect 17,October, 2000 it provides legal recognition by all means it
is an alternative method for hand written and books method but it online
facilitate legal formation by electronic method and electronic way of filling
method with storage procedure but it is not any essential and legal requirement
in law or act it is only alternative method of electronic data.
validity of e-contract and agreement cannot be questioned after enactment of
this Act any company, arbitration proceeding, and dealings can be done by
forming agreement and document by this way. So far as the as per Indian Contract
Act has requirement of signing and recording where signature asserts the careful
thinking and validity of agreement. Now in this new era it has made easy to sign
agreement and document electronically.
Section 15 of IT Act provides digital
signature which deemed to be alternative of manual signature. The digital
signature can be verified through crypto system and hash function so
authentication of signature cannot be questioned as long as it is not forged.
Such act and provisions are now complying with section 7 of IT Act and contract
entered through electronic way is valid so as signature but in arbitration act
there is no requirement as such.
Even if we see English Arbitration Act 1996,
agreement need no to be sign exchange of communications are valid and agreement
through electronic method as well.
In case of TVC Sky Shop Ltd. V Sahar Airlines Ltd 2010(1)
It was found that appeal was filed in Supreme Court stating that they were
agreed in agreement to appoint Justice S. Ranganathan as a sole arbitrator for
any disputes arising in future. All parties even signed this appeal before
filing now after signing they all have agreed to compliance with the requirement
of Section 7 of the Act and carefully Arbitration agreement has been made.
Respondent revert and opposed this and contended that arbitration clause was not
duly signed by petitioner but only signed by respondent and respondent forwarded
the copy to the appellant showing his willingness for disputes arising in future
should be resolved through arbitration and respondent even accepted the goods
and services by petitioner and agreement came into existence and stated that
section 7 (3) us the only requirement which is agreement should be in writing.
Therefore, arbitrator was appointed, and application was accepted.
- The Arbitration And Conciliation Act, 1996
- Principle XIV.1 - Law Applicable to International Arbitration Agreements
- What Is an Arbitration Agreement?
accessed 17 April 2019
- What Is an Arbitration Agreement? (FreeAdvice)
- UNCTAD/EDM/MISC232/ADD39 Dispute Settlement 70
- UNCTAD/EDM/MISC232/ADD39 Dispute Settlement 70
- AA 1996—the Arbitration Agreement—England and Wales—Overview - Lexis®P