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Report No. 76

3.13. Position under section 7.-

Under sub-section (1) of section 7,1 the matter depends on the adoption by the Receiver of the substantive agreement. The subject of adoption of agreement by the Receiver properly pertains to insolvency law .2

Where the Receiver has not adopted the contract, the question how far effect should be given to the arbitration clause is, in substance, left by sub-section (2) of section 7 to the discretion of the court having jurisdiction in the insolvency proceedings. Any other party aggrieved or the Receiver is enabled by that sub-section to make an application for the purpose to the insolvency court. Of course, where the matter to which the arbitration agreement applies is required to be determined in connection with, or for the purposes of, the insolvency proceedings, then only this procedure is permissible.

Finally, sub-section (3) of section 7 provides that the expression "Receiver" includes an official assignee. Need for such a definition arises by reason of the fact that the Presidency Towns Insolvency Act, 1909, uses the expression "official assignee" and not the expression "receiver" used in the Provincial Insolvency Act, 1920. No changes are required in the section.

1. Compare section 3, Arbitration Act, 1950 (English), read with section 54(4), Bankruptcy Act, 1914.

2. Sections 62 and 64, Presidency Towns Insolvency Act (Act 3 of 1909).

Arbitration Act, 1940 Back

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