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Report No. 76

2.2. Validity of oral agreemen.- case law on the old Act.-

The first question that arises is this. If parties do not enter into a written agreement and there is an oral agreement of arbitration, is such parole submission legally valid, and what is its effect? The position in this respect under the old Act was not very certain. One view was1 that in such case there can be no valid submission, no valid award, no valid agreement, while the other view was2 that even an oral submission is valid.3-4

The case law in the latter category construed the definition of 'submission' in the 1899 Act (which defined a submission as a 'submission in writing') narrowly, as not excluding an oral submission, on the ground that the Act did not contain any express provision that a submission other than in writing is invalid. According to these cases, an award passed on an oral agreement would be enforceable by suit.

1. BukhanBai v. Adamji, ILR 33 Born 69 (Beaman, J.) (case under 1899 Act).

2. Mathuradas v. Madanlal, ILR 58 Born 369: AIR 1934 Born 79 (case under 1899 Act).

3. Ramautar Sah v. Iangat Singh, AIR 1931 Pat 92 (case under which Act, not clear).

4. Pannamma v. Kottamma, ILR 56 Mad 85: AIR 1932 Mad 754 (case under 1899 Act).



Arbitration Act, 1940 Back




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