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Report No. 76

2.7. Section 2(a) and rules of Association enjoining arbitration by members.-

At this stage, it may be convenient to deal with another question which arises out of that part of section 2(a) which requires a "written agreement". Very often, rules framed by mercantile associations contain provisions for arbitration. Members of the Association are required to sign an application form agreeing to abide by its Rules.

Now, the question arises whether the signature on such application constitutes "a written agreement to submit" the differences to arbitration. On one view, when both the plaintiff and the defendant are members of the association and have signed the application form, it would amount to a written agreement to submit differences to arbitration.1-2.

According to another view "Application for membership and the acceptance thereof gave rise to a contract between the applicant and the company. There is no contract between members inter se by such application."3

1. Mohan La! v. Bissesar Lal, AIR 1947 Born 268 (270) (Bhagwati, J.)

2. Gordhan Das v. Natwar Lal, AIR 1952 Born 349 (354) (Shah, J.)

3. Hanutmal v. Khushi Ram, ILR 1949 1 Cal 199 (230, 231) (Das, J.)



Arbitration Act, 1940 Back




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