The definition of arbitration agreement is provided under section 7(1) of the Arbitration Act as ‘an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not’.
The existence of a dispute is of utmost importance. The agreement can come into force only in case of a dispute or difference between the parties. Section 7(2) states that an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
As per Section 7(4), the requirement of an arbitration agreement is that it shall be in writing, if it is contained in:
- a document signed by parties,
- an exchange of letters, telex, telegrams or other means of telecommunication including communication through electronic means which provide a record of the agreement,
- an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other (S. 7(4)(c)), and
- agreement may also be incorporated by reference (reference to an agreement, which contains an arbitration clause)