TANMOY (director) 25 November 2009
Is it possible to mention in a promissory note that in case of any dispute the matter will be referred to an arbitrator in the following form:
I, Mr. X, S/o Mr.Y promise to pay Mr.Z or his order a sum of R.10000/ and hereby agree that if any dispute will arise then the same will be referred before Mr. A , Sole Arbitrator, whose decision will be final and binding upon me.
Signed
Srinath Kondapally (Advocate) 25 November 2009
It is not possible to appoint an arbitrator in execution of pro-note proceedings, except in execution of agreements only, whereas in case of pro-notes, there will be giving and taking as well as payment and receipt . Theexecution of pro-note is very different from execution of agreement, in agreements in case of violation of respective terms and conditions of a valid agreement only arbitration clause will come into force if such clause exists in that : In execution of pronote respective transaction of payment and receipts will be completed by such execution, Whereas in agreements respective clauses of terms and conditions will not come to an end as a part of obligation of parties, hence in case of execution of pronotes arbitration will not come into picture unless and until it followed by sosme terms and conditions like in agreements/written understandings.
A V Vishal (Advocate) 25 November 2009
Tanmoy
Please understand a promissory note has to be unconditional.
Gundlapallis (Advocate) 21 December 2009
Such a clause take away legally essential charecteristics of a promissory note and that note becomes no more a promissory note.
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