Arbitration agreement not discharged by death of parties; enforceable against legal representatives: Calcutta High Court

The Calcutta High Court recently reiterated that an arbitration agreement is not discharged by the death of a party and shall remain enforceable by or against the legal representatives of the deceased party provided the right to sue in respect of the cause of action survives [Dr Papia Mukherjee v. Aruna Banerjea and Another]..Single-Judge Chief Justice Prakash Srivastava was of the view that even though the legal representatives are not signatories to the arbitration agreement, but being the legal representatives of the original signatory of the agreement, they would be bound by the agreement to the extent provided in law..By way of background, the applicant had executed a partnership deed for running a pathological laboratory namely, Calcutta Clinical Laboratory. The co-partner to the deed had executed the power of attorney in favour of his wife, Aruna Banerjea (respondent).After the death of the co-partner, the applicant invoked the arbitration clause citing illegalities on the part of the legal representative of the deceased co-partner.The applicant also made a request to the respondent to appoint the arbitrator. However, the respondent denied the prayer by taking the stand that there was no valid arbitration agreement between the parties.The applicant then moved the present application under Section 11 of the Arbitration and Conciliation Act of 1996 (Arbitration Act) for appointment of arbitrator to resolve dispute between the parties..At the outset, the Court noted that Section 40 of the Arbitration Act clearly provides that arbitration agreement will not be discharged by death of parties to the agreement and will be enforceable by or against the legal representatives of the deceased.Reliance was placed on the decision of Supreme Court in Ravi Prakash Goel v. Chandra Prakash Goel and Another (2007), wherein it was held that:"It is clear from Section 40 of the Arbitration Act that an arbitration agreement is not discharged by the death of any party thereto and on such death it is enforceable by or against the legal representatives of the deceased, nor is the authority of the arbitrator revoked by the death of the party appointing him, subject to the operation of any law by virtue of which the death of a person extinguishes the right of action of that person."In Ravi Prakash Goel, the top court had noted that persons claiming under the rights of a deceased person are the personal representatives of the deceased party and they have the right to enforce the award and are also bound by it. Moreover, the arbitration agreement is enforceable by or against the legal representative of a deceased party provided the right to sue in respect of the cause of action survives..The High Court, therefore, was of the view that though respondents are not signatory to the arbitration agreement but being the legal representatives of one of the signatories of the agreement, they are bound by it to the extent provided in law.In this backdrop, the Court observed:"Having regard to the above circumstances of the case, I am of the opinion that the arbitration agreement in the form of partnership deed dated 20th of May, 1992 exists and after the death of Dr. Dhrubajyoti Banerjea, the respondents being his legal representatives are bound by the agreement to the extent provided by law. The dispute exists between the parties, hence present application under Section 11 of the Act is allowed."Consequently, the application was allowed..Advocates Arik Banerjee, Ayan Dutta, Rajib Mullick, Shreyashi Maity appeared for the applicant.Advocates Rajarshi Dutta, Munir Ahmed, Shounak Mukhopadhyay, Anurag Ghosh appeared for the respondents..[Read Order]