AN ARBITRATION AGREEMENT SHALL BE DISCHARGED BY THE DEATH OF A PARTY AND SHALL REMAIN ENFORCEABLE BY THE LEGAL REPRESENTATIVES - CALCUTTA HC

The Calcutta High Court reiterated that an arbitration agreement is not discharged by the death of a party and shall remain enforceable by the legal representatives of the deceased party provided, the right to sue in respect of the cause of action survives. 

The applicant executed a partnership deed for running a pathological laboratory, Calcutta Clinical Laboratory. The co-partner executed the power of attorney in favour of his wife, the respondent.

After the death of the co-partner, the applicant invoked the arbitration clause stating the illegalities on the part of the legal representative of the co-partner. The applicant requested the respondent to appoint an arbitrator. However, the respondent denied it by contending that there was no valid arbitration agreement. The applicant then moved to the High Court for the appointment of an arbitrator.

The Court noted that Section 40 of the Arbitration Act provides that an arbitration agreement cannot be discharged on the death of parties to the agreement and shall be enforceable by the legal representatives of the deceased.

The HC placed reliance on the decision of the Supreme Court in Ravi Prakash Goel v. Chandra Prakash Goel and Another (2007), wherein the top court had noted that persons claiming the rights of a deceased person are the personal representatives of the deceased party and have the right to enforce an Arbitration award and also bound by it.

In this instant case, the High Court allowed the application by stating that the respondent is not a signatory to the arbitration agreement but is the legal representative of the deceased and is bound by it to the extent provided in law.