- In Dr. Papia Mukherjee v. Aruna Banerjee and Others, Chief Justice Prakash Srivastava (in a single-judge bench) held that the death of a party does not discharge an arbitration agreement. The agreement remains enforceable by/against the legal representatives of the deceased party until the right to sue in respect of the cause of action survives. Furthermore, it was observed that even if the legal representatives are not signatories to the arbitration agreement, as the legal representatives of the original signatory, they are obligated by the contract to the degree required by law.
- In this instance, the applicant had signed a partnership agreement to operate a pathological laboratory, and a power of attorney had been perpetrated by the deed's co-partner in favour of his wife, Aruna Banerjea (respondent). The applicant invoked the arbitration clause, asserting illegalities on the part of the dead co-legal partner's representative following the co-partners demise. Furthermore, an application under Section 11 of the Arbitration and Conciliation Act of 1996 (Arbitration Act) was filed by the applicant to appoint an arbitrator to decide the parties' dispute as the respondent refused to accept the applicant's advice to appoint an arbitrator while claiming that there was no genuine arbitration agreement between the parties.
- Section 11 of the Arbitration and Conciliation Act of 1996 (Arbitration Act) specifies the appointment of arbitrators.
- Section 40 in The Arbitration Act, 1940 states that a Small Cause Court has no jurisdiction over arbitrations or any application from them, except for applications submitted under Section 21.
- In a relevant case, Ravi Prakash Goel v. Chandra Prakash Goel and Another (2007), the Hon'ble SC held that Section 40 of the Arbitration Act clarifies that an arbitration agreement is not discharged by the death of any party. Similarly, the arbitrator's power is not withdrawn by the death of the party appointing him, nor is it repealed by the demise of the party appointing him. Additionally, the personal representatives of the deceased party have the power to enforce and are obligated by the award. If the right to litigate in respect of the cause of action exists, the arbitration agreement is enforceable by or against the legal representative of a deceased party.
- In Aurohill Global Commodities Ltd. vs. Maharashtra STC Ltd. (2007) 7 SCC 120, the broad powers of arbitral tribunals were acknowledged.
- In another notable case, Branch Manager, Magma Leasing and Finance Limited and Others vs. Potluri Madhavilata and Others (2009) 10 SCC 103, it was ruled that the arbitration clause does not expire or become inoperative when the contract is terminated.
- After hearing both the parties and referring to the aforementioned cases, the Hon'ble HC observed that the current application was approved under Section 11 of the Act and that the arbitration agreement in the form of a partnership deed existed. Furthermore, as Dr. Dhrubajyoti Banerjea's legal representatives, the respondents were obligated by the contract to the degree permitted by law after his death.
- Therefore, the Hon'ble HC allowed the application.
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