DOCTRINE OF SEPARABILITY OF ARBITRATION AGREEMENT: FROM BOTH NATIONAL AND INTERNATIONAL PERSPECTIVE
Introduction
Arbitration is the process of solving disputes outside the court. When two or more parties resolve the dispute among themselves by appointing a third party whose decisions are binding to both parties. Arbitration agreements are voluntary in nature that means both parties must agree to solve the dispute outside the court.
An arbitration agreement is a separate agreement as it is concluded in the contract as ‘Arbitration Clause’. According to section 2(a) “an arbitration agreement means a written agreement to submit present and future differences to arbitration, whether an arbitrator named therein or not”[i]
Arbitration clause lying in a contract; thus, both are independent of each other. This is referred to as the doctrine of “separability” or “autonomy” or “severability” of the arbitration clause.
DOCTRINE OF SEPARABILITY OF ARBITRATION AGREEMENT
The doctrine of separability is a legal doctrine that states that an arbitration agreement is separate from the underlying contract in which it is contained. As such survive termination, breach of the contract. Both agreement and contract are independent in nature. But without agreement contract can exist, but without a contract, such an agreement cannot exist. Thus, the existence of a contract is a must for the existence of the arbitration clause. The validity of the agreement is always questionable in most cases.
Buckeye cash checking Inc v cardegna[ii], according to this case supreme court of US, acknowledge that the doctrine of separability permits the court “to enforce an arbitration agreement in a contract that the arbitrator later finds out to be void”.
In the English High court similar dispute arises which raised the question before the arbitrators that “whether the English rule of public policy that a contract would not be enforced if it is provided for an illegal act in a foreign country extended to the arbitration clause.” An arbitration clause is a distinct clause. And there is nothing that prevents English public policy from the enforcement of an arbitration clause even underlying issue was illegal. Beijing Jian long Heavy Industry Group vs Golden Ocean Group Ltd. & Ors Addressed[iii]
CASE LAWS OF THE DOCTRINE
John B. Goodman Limited Partnership vs THF Construction[iv], according to this case dispute arises between the property owner and the construction contractor about the contract. In every contract, an arbitration clause was mentioned. A dispute raised in court; the court held that the dispute needs to be solved through arbitration.
Prima Pain Corporation vs. Food and Conklin Manufacturing Co.[v], “supreme court of USA held that the contract can be separate from the arbitration clause”.
Supreme court of India also held that in the case, National Agricultural Co-Op Marketing Federation of India Ltd. Vs Gains Trade Ltd.[vi] Court observed the doctrine of separability. An arbitration clause should be treated independently.
ARGUMENTS AGAINST THE DOCTRINE
One of the significant arguments against the doctrine of separability it’s a contradiction to the legally binding way to deal with arbitration law. The doctrine should be invalidated because no dispute can be sent to the arbitration unless it was mentioned in the contract. At the time of making contract parties have the option to put a clause of arbitration mutually.
The doctrine of separability distinguishes arbitration laws from important aspects of jurisprudence defenses to enforcement and does not offer the proper right to conflict with the protection of these defenses.
The doctrine is a presumption not a fixed rule of law. it does not provide substantive validity to the arbitration agreement.
ARGUMENTS IN FAVOR OF THE DOCTRINE
The fundamental principle of arbitration law is that arbitrators have the facility to rule on their own jurisdiction. That principle is usually presented as direct results of the separability doctrine. It is due to the autonomy of the arbitration agreement that any claim in the contract is in some way void would not have any direct impact on the arbitration agreement. The separability doctrine allows the examination by the arbitrators of jurisdictional challenges based on the alleged ineffectiveness of the disputed contract.[vii]
CONCLUSION
The doctrine of separability established self-governing for the arbitration clause. And prevent it from underlying contracts. It distinct the arbitration clause from the contract.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.
