Q: What is an arbitration and arbitration agreement in accordance with arbitration and conciliation act, 1996 ?

Ans: According to section 2(1)(a) of arbitration and conciliation act, 1996, an arbitration means any arbitration whether or not administered by permanent arbitral institution.  

According to section 2(1)(a) of arbitration and conciliation act,  1996, the arbitration means any kind of arbitration whether adminstered by permanent arbitral institution like Indian council of arbitration or not administered by permanent arbitral institution like Indian council of arbitration. 

Note: Section 2(1)(b) of Arbitration and Conciliation Act,  1996 defines about the Arbitration Agreement and its definition is given in section 7 and section 8 of Arbitration and conciliation act, mentions about the power to refer parties to arbitration where there is an arbitration agreement.

The Act is divided into four parts:

Part I (Section 2-43) – Applies to the place of arbitration in India. The award granted is treated as a domestic award. 

Part II (Section 44-60) – Enforcement of foreign awards.

Part III (Section 61-81) – Conciliation

Part IV (Section 82-86) – Supplementary provisions

It contains three schedules:

Schedule I – Convention on the recognition of foreign awards of arbitration. 

Schedule II – Protocol to be followed on arbitration clauses.

Schedule III – Convention for the execution of foreign arbitral awards. 

Pms: Recognition and Execution 

Arbitration agreement:  Arbitration Agreement is mentioned in section 7 of Arbitration and 

Conciliation Act, 1996. It is also defined under Section 2(1)(b) of Arbitration and Conciliation Act, 1996 .

An "arbitration agreement” means an agreement which are made by the parties of all or certain disputes arising out of a defined legal relationship, whether contractual or not. Section 7(1).

For instance:

An agreement enforceable by law is a contract. 

If there is a contract between A and B and in the contract and it is mentioned in the contract that the future dispute will be solved by arbitration clause, the dispute will be settled in arbitration tribunal because it is mentioned in the contract. It is also to be noted that the legal relationship is created here which is contractual and the contract or agreement will be the arbitration agreement. It is an arbitration agreement because it is mentioned in the agreement or contract that the dispute will be settled by arbitration and not in the court.

If there is no agreement or there is no contract, the dispute can also be settled in arbitration tribunal. It is not mandatory that only the legal 

relationship arising out of contract will be applicable and the non contractual legal relationship will also be enforceable in arbitration tribunal . So, the arbitration agreement can be both in the form of contract 

and can be non contractual.

No contractual means the obligations which are not expressed in the contract but if there happens a dispute between the parties and it is not mentioned anywhere by the parties that the dispute will be resolved in arbitration tribunal, in that condition also the parties can submit arbitration agreement at later stage.

Section 7(1) of the Arbitration and Conciliation Act, 1996 defines an arbitration agreement as an agreement through which parties can resolve their dispute which has arisen or may arise, by way of arbitration. 

According to Section 7(2) of the Arbitration and Conciliation Act, 1996, an arbitration agreement can be in the following forms:

 As an arbitration clause in the agreement or

In a form of a separate agreement.

The arbitration agreement should be in writing [Section 7(3)]

(4) An arbitration agreement is in writing if it is contained in—

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a 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 part of the contract.

Types of arbitration agreement: 

There are two forms of Arbitration Agreement:

1. Arbitration clause( Agreement before dispute)

2. Submission Agreement( Agreement after dispute )

Arbitration clause is for future disputes whereas submission agreement is for disputes which have been already arisen .

Arbitration agreement can be in the form of Arbitration clause which is mentioned in short and broad in main contract and due to presence of this clause ,the agreement is called arbitration agreement. 

In submission agreement, there is separate agreement after dispute already arisen and the legal conditions of arbitration are mentioned in that separate agreement and has seperate agreement is called submission agreement. 

Significant features of an arbitration agreement are as follows: 

• An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of separate agreement.

• An arbitration agreement shall be in writing.

• An arbitration agreement will be in writing if it is contained in ; an exchange of letters, telex, telegrams, or other means of communication, which provides a record of such agreement.

Foreign Arbitration Agreement is defined under Article 7 of uncitral model law.