Agreement to Refer Dispute to Arbitration under Section 7
Parties who have an existing dispute may agree in writing to submit that dispute to arbitration. This page provides a practical sample format for a post-dispute arbitration agreement under the Arbitration and Conciliation Act, 1996, together with concise explanations of the main statutory provisions relevant to the agreement.
Updated: 8 September 2026
What is an Arbitration Agreement under Section 7?
Under Section 7 of the Arbitration and Conciliation Act, 1996, parties may agree to submit to arbitration all or specified disputes that have arisen, or may arise, between them in respect of a defined legal relationship, whether contractual or otherwise. The arbitration agreement may form part of a contract or may be made as a separate agreement after a dispute has already arisen.
The agreement should clearly identify the parties, the dispute or class of disputes being referred, the agreed method for appointing the arbitral tribunal, the seat or place of arbitration where appropriate, and the procedural framework to be followed.
Sample Agreement to Refer an Existing Dispute to Arbitration
This Agreement is made at __________ on this ____ day of __________, 20____.
BETWEEN
Mr./Ms. X, son/daughter of __________, aged about ____ years, residing at ________________________________, hereinafter referred to as the "First Party";
AND
Mr./Ms. Y, son/daughter of __________, aged about ____ years, residing at ________________________________, hereinafter referred to as the "Second Party".
The First Party and the Second Party are hereinafter collectively referred to as the "Parties".
Recitals
WHEREAS the Parties are related as brother and sister and their father, Late Mr. __________, died intestate on or about __________ leaving movable assets including ornaments, bank deposits and investments, and immovable property situated at ________________________________;
AND WHEREAS disputes have arisen between the Parties concerning their respective rights, shares and claims in the said properties and the partition or distribution thereof;
AND WHEREAS the Parties, with a view to resolving the disputes without prolonged litigation, have mutually agreed to submit the disputes described below to arbitration under the Arbitration and Conciliation Act, 1996;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Reference of disputes. The Parties hereby refer to arbitration all disputes and claims between them relating to the properties and assets left by Late Mr. __________, including the determination of their respective rights and shares, partition or distribution of the properties, accounts, possession, and all matters incidental or connected thereto.
2. Sole arbitrator. The disputes shall be adjudicated by a sole arbitrator, Mr./Ms. ________________________________, subject to the arbitrator making the disclosures required by the Arbitration and Conciliation Act, 1996 and being legally eligible to act as arbitrator.
3. Failure or inability of named arbitrator. If the named arbitrator declines, becomes unable to act, becomes ineligible, or the appointment otherwise fails, the Parties shall attempt to mutually appoint a substitute arbitrator. If they fail to agree, either Party may seek appointment in accordance with Section 11 of the Arbitration and Conciliation Act, 1996.
4. Written claims and documents. The arbitral tribunal may direct the Parties to file statements of claim and defence, inventories of the estate and properties, supporting documents, accounts, valuations and other material within such time as may be fixed in accordance with the Act.
5. Equal opportunity and hearing. Each Party shall be given a reasonable and equal opportunity to present its case, file documents, make submissions and participate in hearings in accordance with the Arbitration and Conciliation Act, 1996.
6. Place and language of arbitration. The place/seat of arbitration shall be ________________________________. The language of the arbitration shall be English, unless otherwise agreed by the Parties or directed in accordance with law.
7. Interim measures. Nothing in this Agreement prevents either Party from seeking interim measures available under the Arbitration and Conciliation Act, 1996.
8. Award. The arbitral award shall be made in writing, signed and delivered in accordance with the Act. The tribunal may make an interim arbitral award where permissible under Section 31.
9. Time for award. The arbitral proceedings and the making of the award shall be governed by the time limits and extension provisions contained in Section 29A, wherever applicable.
10. Costs. The costs of the arbitration shall be determined in accordance with the Arbitration and Conciliation Act, 1996, including Section 31A, subject to any lawful agreement between the Parties made after the dispute has arisen.
11. Governing law. This arbitration agreement and the arbitral proceedings shall be governed by the Arbitration and Conciliation Act, 1996, as amended and applicable in India.
12. Binding effect. The arbitral award shall be binding on the Parties subject to the remedies and enforcement provisions available under the Arbitration and Conciliation Act, 1996.
IN WITNESS WHEREOF, the Parties have signed this Agreement on the date and at the place first written above.
Name: ____________________
Signature: ________________
Name: ____________________
Signature: ________________
Witnesses
1. Name: ____________________ Signature: ____________________
2. Name: ____________________ Signature: ____________________
Relevant Provisions of the Arbitration and Conciliation Act, 1996
Section 7 - Arbitration agreement
Section 7 defines an arbitration agreement. It covers an agreement to submit all or certain disputes arising from a defined legal relationship to arbitration. The agreement may be an arbitration clause in a contract or a separate agreement and must be in writing. Written form can be satisfied by a signed document, recorded communications including electronic communications, or pleadings in which the arbitration agreement is asserted by one party and not denied by the other.
Section 10 - Number of arbitrators
Section 10 permits the parties to determine the number of arbitrators, provided the number is not even. If the parties do not determine the number, the tribunal consists of a sole arbitrator.
Section 11 - Appointment of arbitrators
Section 11 regulates appointment of arbitrators. Subject to the Act, parties may agree on an appointment procedure. If the agreed procedure fails, the statutory appointment mechanism may be invoked before the competent court or designated arbitral institution, as applicable.
Section 12 - Disclosure, independence and impartiality
A prospective arbitrator must disclose circumstances that may give rise to justifiable doubts about independence or impartiality and matters affecting the ability to devote sufficient time to the arbitration. Eligibility restrictions under the Act should be checked before naming an arbitrator.
Section 18 - Equal treatment of parties
The parties must be treated equally and each party must be given a full opportunity to present its case. Any procedural clause in an arbitration agreement should be read consistently with this requirement.
Section 29A - Time limit for arbitral award
For matters other than international commercial arbitration, Section 29A generally requires the award to be made within twelve months from completion of pleadings under Section 23(4), subject to the statutory provisions for consensual and court-ordered extensions. International commercial arbitration is treated differently under the provision.
Section 31 - Form and contents of arbitral award
Section 31 requires an arbitral award to be in writing and signed by the tribunal. It also addresses reasons, date and place of the award, delivery of a signed copy, interim awards, interest and costs.
Section 31A - Regime for costs
Section 31A gives the court or arbitral tribunal discretion over whether costs are payable, the amount of costs and when they are to be paid, subject to the statutory framework.
Practical Drafting Points
Identify the dispute clearly and avoid vague wording. If a specific arbitrator is named, include a substitute appointment mechanism in case that person cannot act. Avoid appointing two arbitrators as the final tribunal because Section 10 requires the number of arbitrators not to be even. Do not use old provisions relating to an "umpire" under the Arbitration Act, 1940.
The agreement should also avoid imposing obsolete award periods. Current time limits should instead be tied to Section 29A where that provision applies. Parties should additionally consider the seat of arbitration, language, method of service, confidentiality, institutional rules, fee arrangements, and the statutory requirements concerning independence and eligibility of arbitrators.